Who owns your media: How Malayala Manorama struggled with a steep fall in ad revenues

A Newslaundry series that deciphers the ownership of India's major news organisations.

WrittenBy:Anto T Joseph
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When a Dubai-based FM radio station catering to Indian expatriates from Kerala went off-air in January 2019, there was chaos. Many jobs were axed.

The five-year-old Radio Mango in Dubai, managed by a subsidiary of the Malayala Manorama Company Ltd, or MMCL, was a top hit among non-resident Keralites. But mounting losses due to a fall in advertising revenue and a steady erosion of net worth had forced the company to write off its investment in its subsidiary, Malayala Manorama FZ LLC, which ran the radio station in the UAE.

Back in Kerala, there were concerns at the board level. MMCL’s investments in subsidiaries and associated companies were on the radar. As of March 31, 2020, its total investment in subsidiaries stood at Rs 161.9 crore, with a majority of it – Rs 154.5 crore, to be precise – sunk into its wholly-owned TV subsidiary, MMTV Ltd. Curiously, MMTV’s net worth had dropped to Rs 126.40 crore.

But none of this spilled over to the public space.

The group, nearly 95 percent of whose income came through its daily newspaper, had weathered many a storm since its launch on March 22, 1888, as a weekly. The pandemic, lockdown, and a series of floods in Kerala hit the group severely. But for a newspaper company whose circulation income more than adequately covered the newsprint cost, the drop in advertising revenue was not as nasty as it was for others, especially its English language peers. It progressively passed on the hike in newsprint price through regular increases in its cover price, without disturbing its circulation or market leadership position.

Manorama’s political legacy

No newspaper in India is as intertwined with its region’s history, politics and business as Malayala Manorama.

The largest-read regional newspaper in India and the first newspaper to cross the one-million circulation mark in the country way back in 1998, Malayala Manorama owes its existence and growth to the high literacy rate and the unparalleled level of political consciousness in Kerala.

But what is striking is the spectacular dichotomy of the 130-year-old newspaper. The group, which began its journey from the sleepy town of Kottayam, famous for its rubber, tea and coffee plantations, always stood for the rights of Dalits and the oppressed, even battling upper-caste hegemony in the princely state of Travancore, but found an arch enemy in communism. It abhorred Left politics and wrote stories of communist brutality every day, but counted on the avid readership of the Left-dominant society.

EMS Namboodiripad – who headed the first government in Kerala and the first ever communist government in the world that was voted by ballot in 1957 – always looked with suspicion at the paper, owned by a business family that was, according to him, part of an emerging capital class. This was despite him being a family friend of the then editor. EMS was vindicated when Manorama cheered on the ill-famed “liberation struggle” against his government’s historic education bill, which eventually threw the communists out of power in 1959.

“It is no secret that the newspaper is anti-Left,” said a former editor and Left sympathiser, who spent over 25 years in Manorama’s newsroom. “Malayala Manorama is open about its political bias while most papers do it discreetly. I salute its sheer honesty.”

But is being anti-Left a façade that the newspaper has carefully built over time?

“If you analyse Malayalam newspapers during any Congress-led regime in the past, you will know Manorama is among the most critical of the government, only second to the CPM mouthpiece Deshabhimani,” the editor said.

An editorial director who worked with the group for several decades claimed Malayala Manorama is no longer the newspaper it used to be.

“Like how the Left has changed, the total political climate in the state has changed; and so have the contours of journalism,” he said. “All these changes have indeed been reflected in the newspaper’s outlook.”

The fact remains that both the Left and Malayala Manorama have survived the flow of time in Kerala.

Humble beginnings

When Kandathil Varghese Mappillai, a progressive liberal with noble ideas of cultivating arts, culture and literature in the state, stepped into the printing world in 1888, he was a greenhorn. Malayala Manorama was a weekly in its primitive form.

Soon after his death in 1904, when his nephew KC Mammen Mappillai took charge of the company, Kerala was undergoing political turmoil. The constant tiff between the regent of Travancore, Sethu Lakshmi Bayi, and her younger cousin, Sethu Parvathi Bayi, led to the elevation of Sree Chithira Thirunal, the last ruling maharaja of Travancore. It was followed by excesses by Diwan Sir CP Ramaswami Iyer, the ruthless suppression of the communist-organised Punnapra-Vayalar uprising in 1946, and the declaration of an independent Travancore in 1947.

The events that rocked the state shook the newspaper too. Its decision to back the Travancore State Congress, which was leading a struggle against the then royal government, irked the autocratic Iyer no end. The family couldn’t escape his wrath.

“We lost all that we had – our wealth, our reputation and everything else,” wrote KM Mathew, the eighth son of Mammen Mappillai, in The Eighth Ring, his autobiography that captured the journey of the group. “My father and many close relatives were in jail and our family’s onward journey faced an impasse of darkness...The police locked and sealed the offices.”

The newspaper remained shut for nine years between 1938 and 1947.

The group and the family had begun to take their first tottering steps to a new life after Mammen Mappillai’s elder son KM Cherian took charge. He joined his father as the managing director when Malayala Manorama reopened in 1947. He had a tough time restarting the press. The printing press was nearly rusted, typesetting blocks fused, and the old newsprint rat-infested and decayed. Cherian had to raise capital from his friends to ensure a daily print run of a few thousand copies. It was an evening paper at the time. Cherian became chief editor in 1953.

In its second coming, Manorama faced intense competition. “In Kottayam alone, there were three other Malayalam newspapers: Deepika, Kerala Bhushanam and Deshabandu. But after Cherian’s youngest brother KM Mathew took the reins, there was no looking back,” said advocate A Jayashankar, a leading political analyst and a familiar face on TV channel discussions in Kerala.

Mathew, an astute businessman, turned Manorama truly professional. He brought in Tarzie Vittachi, a Sri Lankan editor-consultant, to improve the quality of the newspaper. Pages were later redesigned by an international design consultant, Edwin Taylor. “Little by little by the grace of God, we recovered all that we had lost,” Mathew wrote in his autobiography.

Rise of Manorama

The newspaper’s untiring anti-Left tirade, however, didn't deter it from gaining ground in the state. In the 1960s, it was still trailing behind its archrival Mathrubhumi, then owned by the Nalapat family, in circulation. When Manorama took a call to expand, it went straight to Kozhikode in northern Kerala, the heartland of Mathrubhumi.

That was when major labour unrest rocked Mathrubhumi. Its printing came to naught. The shutdown lasted for 75 days.

“We thought of encashing this God-sent opportunity by eating into Mathrubhumi’s circulation,” said a senior journalist who was part of the Kozhikode edition at the time. “But we received a tele-printer message jointly signed by the promoters, Cherian and Mathew. They asked us not to print one additional copy till the strike gets over, and keep the status quo. The Manorama management didn’t want to increase circulation using this unethical way.”

By 1970, Manorama overtook Mathrubhumi, with its circulation rising above three lakh. After hitting the one-million mark in 1998, a confident Manorama crossed over to the Middle East to focus on the growing Malayali diaspora in the region. In terms of readership, Manorama is the largest-read Malayalam newspaper and fifth largest Indian newspaper today, with 1.77 crore readers (total readership) as per the latest Indian Readership Survey in May 2020.

While the newspaper continued its north-bound growth, the group went on to establish two dozen magazines catering to women, students and teenagers, and specialising in literature, employment, education, matrimony, and so on. Eight of them were printed in English. The group ventured into television and radio, setting up two TV channels exclusively for news and entertainment. It made a huge foray into the online space with two news portals, ManoramaOnline and OnManorama for its Malayalam- and English-reading audiences, respectively.

Sensationalism, Manorama style

Somewhere along the journey, Manorama’s hallmark became sensationalising the news through eyewitness accounts or Kerala connections. The newspaper called it “writing craft”.

A celebrated writer who worked at Manorama for nearly a decade smirked: “We learnt the basic lessons in ‘creative writing’ on the job at Manorama’s desk. We knew how to package every news item in the most creative manner.”

Advocate Jayashankar cited the example of the brutal murder of Arikkad Varghese, known as Naxal Varghese, by the police in a cold-blooded fake encounter. In the inquest report, police had said Varghese lay on the floor with his left eye shut and right eye open. When every newspaper shouted from the rooftops about the police atrocity, Manorama blended the news with a bit of imagination. “Varghese shot dead while aiming to shoot police” was its screaming headline. The logic was simple: if your left eye is shut and right eye open, you’re aiming to shoot.

Four decades later, in 1998, a police constable confessed publicly that he shot Varghese point-blank on orders from his superiors, implicating a former IG of police. Yet, Manorama never apologised.

Much akin to this is the sensational ISRO espionage case in 1994 that captured the imagination of the entire nation. Joining the rest of the newspapers, Manorama fed its readers with juicy speculative stories as Indian aerospace engineer Nambi Narayanan was nabbed by the investigating agency. The plot thickened with a “honey trap” as Narayanan, who was developing cryogenic fuel-based engines, was accused of aiding the sale of state secrets via two alleged Maldivian female intelligence officers. The newspaper carried several “scoops”.

After a 24-year long court battle, Narayanan, who was framed in the fake scandal, was acquitted in 2018. He was eventually awarded a Rs 50 lakh compensation by the Supreme Court. He was also conferred with a Padma Bhushan award.

The espionage case had a political background too. Two factions of the Congress party – one led by K Karunakaran and the other by AK Antony and Oommen Chandy – were fighting for supremacy in the state. Karunakaran, who was close to Manorama, saw his hold slacken under the changing political equations. The espionage case eventually led to his ouster in 1995, paving the way for Antony to lead the government.

Malayala Manorama had not initially supported Oommen Chandy when he had stood for election for the first time in 1970 from Puthuppally constituency. Later, however, the newspaper joined hands with him. Even today, many media watchers swear by Manorama’s open romance with Chandy.

The other face of Manorama

If a newspaper is steeped in bluster and swayed by fickle policies, can it report consistent growth year after year over several decades?

“Absolutely not,” said the senior journalist quoted above. “You can’t sit in judgement looking at a few instances. One has to look at the growth over decades. Though its political ideologies are out in the open, it was never vindictive and malicious.”

He cited the example of a sensational court battle that Manorama waged with a cartoonist two decades ago.

The group was hurt when VT Thomas, a cartoonist known by the pen name Toms who spent a lifetime at the newspaper, decided to fight after his retirement for the copyright of a political satire comic series he created based on twin, impish teenagers, Boban and Molly. Toms had achieved enormous success and fame through the cartoon series, which created a world record for uninterruptedly running for over three decades. He argued that he created the characters and not the newspaper and hence owed the copyright.

The Kerala High Court ruled that the ownership of the cartoon strips drawn during Toms’ employment with Manorama would continue to be with the publication, but Toms was free to own the characters Boban and Molly, and could continue to create cartoon strips featuring them and publish them at his will. Toms made a fortune by launching Toms Comics as a monthly magazine format. Reportedly, the first issue sold more than three lakh copies.

Manorama dragged the case to the Supreme Court. “The group finally won the case, but the very next day, they returned the copyright of the characters to Toms,” said the senior journalist. “They wanted to prove a point, but were not vindictive after they won the case.”

Family and division of power

MMCL is run by a close-knit family. “It is not true to say that the family has had no difference of opinion or family feuds,” said an insider. “An inbuilt mechanism helps them sort out the differences. There has never been any litigation nor any washing of dirty linen in the public.”

Another ex-employee said the family never indulged in blame games even when some of their ventures collapsed. Instead, the family stands together and owns it up collectively. Their investment in the UAE-based radio is a prime example.

There are several stories about KM Mathew’s negotiating skills. He apparently took up tough mandates as a negotiator and proved successful. A family feud at a prominent newspaper family in Chennai, however, was a tough nut to crack. Yet, he achieved a temporary truce.

Mathew’s three sons – Mammen Mathew, Philip Mathew, and Jacob Mathew – are all active in the group. Many others from the extended Kandathil family too have taken keen interest in the business. “They are all qualified in the field of journalism and management alike,” said another insider.

Sources said three regions in Kerala are split between three brothers for operational efficiency. While Malayala Manorama editor Mammen takes care of the Kottayam region, Philip and Jacob look after Kochi and Kozhikode regions, respectively. Magazines and TV, radio channels and online editions too have been trifurcated region-wise for operational efficiency.

This is one of the very few media houses in India that is still being seriously pursued and expanded by the very energetic fifth generation. While Mammen’s only son Jayant looks after TV channels, his wife Mariam, an excellent organiser, takes care of the online edition as well as other online properties such as M4Marry, a matrimony portal. The Week comes under Kochi region and Philip’s second son Riyad is in charge. Amit, Philip’s elder son, looks after Radio Mango. Jacob Mathew’s son Harsha is taking care of MM Publications, a subsidiary for all new magazines. KM Cherian’s daughter’s son George Jacob is the head of technology for the entire group. Other family members are in charge of family-owned businesses such as plantations and MRF.

The company continues to be owned by the family’s descendants and the extended family of the founder. Today, it has a little over 100 family members holding shares. Of this, the largest chunk of stake is held by the KM Cherian family, with 11.59 percent stake. Among others, PV Jacob family holds 7.89 percent stake, Mammen Varghese family 6.82 percent, Peter Philip 5.67 percent, and Mammen Philip 5.42 percent. Jayant Mammen Mathew holds 3.73 percent stake in the company.

Falling revenues

The pandemic wreaked havoc on Manorama's topline growth. The revenue profile of the company, with advertising and circulation revenues being in almost equal share, has undergone some change. The operating income witnessed a year-on-year drop of seven percent to Rs 1,154 crore in 2019-20 on account of lower ad revenue. The income slipped further to Rs 365 crore during the first half of 2020-21, down from Rs 610 crore during the first six months of the previous financial year.

A quick look at the revenue will reveal that it has been on a steady fall over the last three years. The revenue of Rs 1,154 crore in 2019-20 – down from Rs 1,243.2 crore in the previous year – has now equalled the income reported four years ago in 2015-16.

Net profit too has narrowed progressively to Rs 41.4 crore in 2019-20 from Rs 140 reported in 2015-16. Its return on equity stands at 3.61 percent as of March 31, 2020, a fall from 16.43 percent reported on March 31, 2016. Similarly, its return on capital employed is 6.77 percent on March 31, 2020, down from 25.79 percent on March 31, 2016.

However, there is life after the pandemic for the group. The company still generates more than 50 percent of its income from ad revenue, which is higher than most of the major vernacular dailies, amid intense competition from other digital media players as well as from other newspapers.

Even after the pandemic downed shutters on several media organisations, Kerala boasts of a crowded newspaper market. Over a dozen TV news channels are still vying with each other for the politically conscious society’s attention and Manorama’s own news channel is pushed to the third slot.

Care Ratings counts the group’s dependence on single publication catering to a semi-saturated Kerala market for a bulk of revenues as a key weakness. In a December 2020 report, it said: “While the presence in a semi-saturated market limits the prospects for any sharp growth, it also exposes the company to the social-economic conditions of a regional economy...With the muted economic environment in 2020-21, the performance is likely to remain subdued.”

With sufficient liquidity in hand, the company has not availed moratorium nor deferment on its interest and principal obligations as part of Covid-19 relief measures. The central Travancore-based business family from Kottayam was quite conservative in its approach. It had kept liquid investments of Rs 371.65 crore in the form of unencumbered fixed deposits, as on September 30, 2020.

MMCL also holds 0.14 percent (6,109 shares) in a family-owned jewel: the publicly-listed MRF Ltd. Its stock price hovers around Rs 82,000 per share, with a market cap of Rs 34,940 crore as on July 18. That is one of many investments made by the group in flourishing family businesses.

For a newspaper that openly displays its bias, does editorial freedom mean anything?

“The senior editorial management has established a sway over the newspaper's policies which are, of course, based on the broad guidelines and the group’s culture,” said the former editorial director. “There is an open and creative discussion whenever sensitive issues crop up.”

An old-timer reminisces how Manorama used to form clusters with people who have domain expertise.

“When Gorbachev launched perestroika and glasnost in Russia, which eventually led to the collapse of the USSR, all senior editors looking at international politics were called to the headquarters and ensured a well thought-out strategy for covering it,” he said. Of course, the USSR’s fall had a significant impact on Kerala’s Left politics.

Employees told Newslaundry that the new generation at Manorama, unlike in many other family-held media houses, is far too active and serious about the newspaper business. “There is always a sense of security and belonging among employees,” an employee said.

“It is a well-oiled machine. The flip side is that there may not be much scope for individual excellence,” says another staffer.

How does Manorama fare when the newspaper industry across India is facing a loss of relevance and credibility? “There are only a few serious newspaper readers today. An average Malayali flips through headlines, cinema gossip, gold prices and more importantly, obituaries. If anyone continues to read a particular newspaper brand, it is because he is addicted to the style and the font,” said Jayashankar.

He calls the year 2004 a red-letter time for the Malayalam news media industry, akin to the fall of Constantinople to the Turks that flagged off the Renaissance era. “This is the year when a TV news channel went to town with a sensational ice cream parlour sex scandal and rocked the state,” he said. It led to the stepping down of PK Kunhalikutty, then a minister in the Oommen Chandy government. The news channel Indiavision however downed shutters a few years later, but news breaks in the state shifted en masse to TV channels.

Manorama however steamrolls its way forward.

Three years ago, at the launch of its new campaign “Puthiya Vayana, Puthiya Keralam”, meaning “new reading culture, new Kerala”, Jayant Mammen Mathew was eloquent: “We have acted as a catalyst in promoting new ideas and changes in the state,” he said, adding that Manorama plays an important role in developing a strong reading culture among youngsters in the state. Nobody disputes the claim.

And its search for growth continues.

Update: The Punnapra-Vayalar uprising was in 1946, not 1964. This has been corrected.

Graphics by Gobindh VB


This story is part of the NL Sena project, which over 75 of our readers contributed to. It was made possible thanks to Gaurav Ketkar, Pradeep Dantuluri, Shipra Mehandru, Yash Sinha, Sonali Singh, Prayash Mohapatra, Naveen Kumar Prabhakar, Abhishek Singh, Sandeep Kelvadi, Aishwarya Mahesh, Tushar Mathew, Satish Pagare, and other NL Sena members.

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