Why is the Times Group shutting down Mirror?

It’s mainly about money.

WrittenBy:Anto T Joseph
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For Bennet, Coleman & Co Ltd, or the Times Group, as it is commonly known, 2005 didn’t start on a promising note. Rival media companies were preparing to enter the Mumbai newspaper market, eager to end the century-old hegemony of the Old Lady of Boribunder. Hindustan Times, until then a predominantly North Indian newspaper, was starting a Mumbai edition, while the Zee and Dainik Bhaskar groups were jointly launching a new city newspaper, DNA, an acronym for Daily News and Analysis.

India’s print media was going through a massive churn, and the Times Group faced massive poaching of seasoned journalists and sales and marketing staff with unbelievably fat pay packages. Several Times Group veterans such as Pradeep Guha, Gautam Adhikari and Ayaz Memon stepped out of their enviable cosy turfs, a parade of go-getting colleagues in tow.

At the BCCL, quick consultations and deliberations to counter the threat from new players were the order of the day. Both Sameer Jain, vice chairman of the BCCL, and Vineet Jain, the managing director, were prepared to make a big gamble. Jaideep Bose, who had just taken charge as the Times of India editor after a two-decade stint at the Economic Times, and Bhaskar Das, executive president, response, were on the job. After toying with a few flotilla and flanking strategies, the BCCL board cleared the proposal to launch a new newspaper, Mumbai Mirror. They realised that the plan to ringfence TOI from rival assault posed the danger of Mirror cannibalising the parent paper, but ignored it.

Some 15 years later, as the daily Mumbai Mirror shuts down, one can’t deny what the newspaper achieved for the Times Group. It did more than it was supposed to. It flew off the shoulders of TOI after gaining a certain altitude. As for its rivals, DNA bled money profusely, leading first to the divorce of its parent companies and, inevitably, to its shutdown about a year ago. Hindustan Times weathered the onslaught but continues to bleed.

On December 5, 2020, the Mirror staff were told to gather for a quick videoconference where the chief editor, Meenal Baghel, broke the news to them: the paper had been on ventilator support for a few months and would be taken off it soon, likely in a fortnight. Nobody from the paper’s management or HR was there to brief the employees, who felt dismayed by how suddenly and casually they were left in the lurch. In fact, even the chief editor, those who attended the virtual meeting said, was ill-informed about what lay in store. “End of the road for many journalists,” is how a senior editor reacted.

What followed was chaos and uncertainty.

Some staffers said they had an inkling of what was coming when the Times Group hived off Mumbai Mirror from the BCCL in March, and bundled it with its sister publications in Pune, Ahmedabad and Bengaluru into a relatively new entity, the Metropolitan Media Company, or MMCL, a subsidiary of the BCCL.

Questions sent to Ranjeet Kate, CEO of MMCL, about the newspaper’s closure did not elicit a response. Baghel refused to say anything beyond what’s contained in the company’s official statement: that the Times Group is ceasing publication of Pune Mirror and relaunching Mumbai Mirror as a weekly but will continue to have “a strong digital presence”.

“Following months of discussions and deliberations, we have made this extremely difficult and painful decision to recalibrate our portfolio of publications,” the statement adds, blaming it squarely on the pandemic and the economic crisis.

The media giant reported a profit of Rs 484 crore in 2018-19, down from Rs 681 crore the previous year. In 2019-20, it posted a consolidated net loss of Rs 451.63 crore, according to data sourced from business intelligence platform Tofler by Exchange4Media, mainly as a result of the contraction in advertising revenues. With the economy officially in recession and advertising revenues in disarray, this year is going to be really hard for the Times Group.

Although Bangalore Mirror and Ahmedabad Mirror didn’t find any mention in the Times Group’s statement, their employees are in a panic.

“There are about 25 employees in Bengaluru. We have not heard anything so far, but are keeping our fingers crossed,” said a Bangalore Mirror employee. Another added, “I think they tried to sell Mirror like how DNA promoters tried to a few years ago, but nothing worked.”

There’s talk that the MMCL is in the process of selling Ahmedabad Mirror to a politically connected local property developer. Newslaundry couldn’t verify this independently.

Rise and fall

Mumbai Mirror was launched on May 29, 2005, in a glittering ceremony, complete with fireworks and laser shows, at the Gateway of India. The launch, attended by the then Maharashtra chief minister Vilasrao Deshmukh and the actor Abhishek Bachchan, took place just before Hindustan Times and DNA entered the Mumbai market.

“This will lead to an overall expansion of the print market and in the process, if there is cannibalisation, it is all right. Internal cannibalisation is healthy,” Vineet Jain declared at the launch. The positioning of Mumbai Mirror was perfect. On day one, it was already the most circulated newspaper in the city after TOI, selling two lakh copies.

A month and a half later, on July 14, Hindustan Times finally launched in Mumbai, and DNA followed suit a fortnight later, just as the city was crippled by a massive flood. Bhaskar Das, who doubled as the brand director of Mumbai Mirror, was confident that Hindustan Times and DNA would struggle to overcome the new hurdle put up by the Times Group before mounting an attack on TOI.

Supplied free with TOI initially, Mumbai Mirror quickly raked up excellent circulation numbers, building up on its inaugural print run of 2 lakh. The seemingly fearless paper, with its punchy headlines and neat editing, immediately caught the imagination of the Mumbai reader who was more concerned about civic and infrastructure problems rather than the humdrum of national politics, making life difficult for DNA and Hindustan Times. The Times Group was more than happy to extend the experiment to Pune, Bengaluru, and Ahmedabad.

It all came at a significant cost. According to Bhaskar Das, Mumbai Mirror made losses in the first three years. “Today it’s a Rs 200-crore brand. This has become possible over a period of six years,” he said in an interview in 2012.

Fourteen years after its launch, the paper encountered its greatest challenge in 2019. Like most papers, it saw a fall in advertising revenue as India’s economic growth slowed. “In 2019, I heard strong murmurs about drastic reduction in ads. Of all the Mirror editions, Mumbai was the cash cow. It was a golden goose. But suddenly, there was a dip. The ad space shrank. The pandemic and the lockdown drove the final nail in the coffin,” said an employee who asked not to be named.

The Times Group noted as much in its statement, “Sadly, just as the pandemic, lockdown and unprecedented economic crisis have laid low many great ideas and initiatives before they could fully take root, they came as a body blow for the still-young brand.”

A new company

Several Mirror employees argued that the Times Group’s decision to hive off all Mirror papers into the MMCL stemmed from a desire to either sell or shut them down.

“The process of moving all employees to MMCL started in March and it was made effective April 1. Everyone had to sign a fresh agreement with the new company, without any changes in their job profiles or employment conditions. During the lockdown, we also took a cut in gross salaries of up to 30 percent,” said a former Mirror employee.

A look at the MMCL’s books shows it is a highly profitable company. Its net profit more than doubled to Rs 168.8 crore in 2019-20, from about Rs 81 crore two years earlier. This is over 50 percent profit on a total income of Rs 330.9 crore. Of course, this is before Mumbai Mirror was made a part of it.

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The MMCL, set up in Bengaluru about 14 years ago with a paid-up capital of Rs 26.2 crore, had borrowed from BNP Paribas, Srei Infra Finance and Saraswat Bank, among other financial institutions.

Why, then, is the Mirror being shut down?

The paper’s low advertising rates is believed to be one of the main reasons. “There was a kind of downtrading by advertisers who found value in advertising in Mirror, which is bundled with TOI,” said a senior Times Group executive. “The management never imagined this sort of ‘cannibalization’ by the Mirror.”

The ad rates were much lower compared to TOI’s, even after 15 years of operation. Some advertisers, though, did dump TOI for Mumbai Mirror, as was evident during the Diwali season when the city paper went from having 16-20 pages to 80-90 on some days.

The pandemic altered the math. The Mumbai Mirror, sold for Rs 3 standalone and for Rs 7 with TOI, saw its circulation drop below a lakh as readers refused to pick up copies for fear of getting coronavirus. Suddenly, it looked an unviable business proportion.

“At one level, if a product isn’t doing well and that’s the state of affairs for a fairly long term, then emotions have no role to play. In the case of Mumbai Mirror, while the editorial product was good it wasn’t doing very well business-wise. So I guess it had to be shut,” said Pradyuman Maheshwari, media watcher and founder of MxMIndia, a news website that tracks the media.

A senior executive at Bangalore Mirror seconded this view, adding that people were reading too much into the Times Group’s decision to close the paper. “These ops were simply unviable to continue and hence the decision. There’s nothing more to it,” he said.

Yet, the decision to shut Mirror down has come as a shock, not least to its nearly 150 employees in Mumbai and Pune.

“The BCCL is the largest and most profitable media house in the country with annual revenues of $1.5 billion, and an average of over 30 percent returns on investment in previous years. All businesses have their ups and downs. If you have made good profits, then there are times when you must ride out the losses too,” the Mumbai Press Club said in a statement.

Four days after they were informed about the daily’s impending shutdown, the employees are still awaiting clarity. “The management is silent about how many people they want to retain and how they want to run the proposed weekly product. What are the conditions for the golden handshake for the rest, if any?” asked a staffer. “Most employees have just a month mentioned in their contracts as the mutually agreed period for separation.”

Some of the senior employees have now joined hands to seek fair compensation for those facing the sack. It’s unlikely the Times Group would retain most of the Mirror staff, let alone all, as it faces revenue losses and cost-cutting at several upcountry editions. “Some of the TOI editions were shut down recently, and others saw huge salary cuts, retrenchments. More pain is in the offing,” said a senior executive.

Maheshwari agreed. “Samir Jain is a hard-nosed businessman. He is seeking profits, near-zero debts, and I am not surprised the BCCL took this decision. In the past, the company has shuttered several popular publications, magazines like Illustrated Weekly, Dharmayug and Science Today, English papers like the Independent, Metropolis on Saturday, Times Crest, apart from multiple editions of the newspaper.”

Still, several questions remain unanswered. Could the shutdown have been averted? Had it been sold as a standalone product, could the Mirror have made more money? Did the company try its best to promote the newspaper? Was it doing enough to sell advertising space? Was the paper in need of an editorial upgrade?

Nobody has any answers.

Anto T Joseph is a journalist in Mumbai.


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