There are two reasons why Primedia was expected to retain the top spot in the media sector in this year's Top Empowerment Companies. First, there were few empowerment transactions in the sector and, second, its empowerment partner, the Mineworkers Investment Co (MIC), increased its economic interest in the company during 2005.
MIC increased its economic interest in Primedia from 6,7% to approximately 20% in September last year. MIC's stake in Primedia is now worth more than R700m at current market prices. Together with the Kirsh family, MIC is in possession of joint voting control of 48% of the company.
Primedia owns radio stations 702 Talk Radio and 94.7 Highveld Stereo, plus a number of media-related companies - CommutaNet, Primedia Outdoor and a 40% stake in local football powerhouse Kaizer Chiefs.
Primedia CEO William Kirsh says empowerment has always been a priority. "We are a company born out of the new SA. When you look at our empowerment credentials, you will see they are strong in all pillars of empowerment as we have fully embraced the transformation of this country."
The Primedia and MIC partnership is probably the longest-standing partnership by a listed company, dating back to 1996.
"Our partnership comes down to common value systems. MIC, just like Primedia, has a passion for the media industry. And that is why this partnership has worked," says Kirsh.
The close relationship has ensured that MIC directors assist Primedia in shaping its new group culture through an active operational transformation programme.
Primedia scored favourably in most of the areas surveyed by Empowerdex. It scored 6,2% for ownership, 10% for management representation, 10% for enterprise development and 6,4% for skills development. Overall, it scored 49,63%, placing it at position 34. Last year it was at 21st overall, but the slide downwards has nothing to do with the company.
The company scored 10% on the corporate social investment (CSI) measure. Among its CSI activities is the Primedia skills development project in Alexandra ( near Sandton), which offers vocational training, job placement and career guidance services. There was also a commitment to build a school in the Eastern Cape for R3m.
Primedia also did itself a favour through open disclosure of its empowerment activities, which ensured easier access to the company's figures compared with other companies.
Kagiso Media, which is 67% held by empowerment companies and the Kagiso Trust Investments continues to top the equity empowerment stake in the sector.
But it did not fare as well in other areas - 7% for management and 2,7% for skills development. This picture might change during 2006; a number of empowerment transactions are expected to be announced following the publication of the second phase of the department of trade & industry's code of good practice in December.
Johnnic Communications, which came third in the sector and 103rd overall, is expected to announce its new major shareholder and empowerment partners during the year. Caxton, which owns daily newspaper The Citizen and magazines, and Naspers, which owns Media24 and MultiChoice, among others, still has to announce empowerment deals. The two were ranked 172 and 180 overall by Empowerdex.
Some commentators blame the lack of equity transactions in the sector on the absence of a sector charter.
This year promises to yield more deals in the sector, but it is likely to take some time before other media companies can match Primedia's performance.
