This archive report was first published on 18 November 2019.
Financial Struggles at Radio Africa Group ¶
Radio Africa Group, a leading broadcasting house in Kenya, is facing financial struggles that may lead to another round of mass layoffs. The company's CEO, Patrick Quarcoo, announced in a staff circular that the company is finding it hard to meet its financial obligations due to shrinking revenues.
According to Quarcoo, the media industry in Kenya and worldwide has undergone radical changes in the last four years, with many media houses struggling to maintain revenue through traditional print and broadcast models. He noted that some media houses have closed down operations, while others have repositioned or restructured their operations due to decreased advertising revenues.
Radio Africa Group has reported a 30% drop in revenues over the past year, which is a significant dent on its income. The company runs a stable of radio stations, including Classic 105, Kiss FM, and Radio Jambo, as well as Bamba TV and The Star newspaper.
Quarcoo stated in the circular that the company is now forced to transition from its old media revenue model and restructure its business, which may include reorganization of job positions, job roles, and operational and divisional structures.
Radio Africa Group has undergone restructuring in the past, with the company sending home a number of journalists and sales staff in February 2017. The company mainly relies on Classic 105, its milk cow, backed by Radio Jambo and Kiss FM, although there are tendencies of cannibalism among the radio stations.
The Star newspaper has been struggling since its rebrand in 2016, with both circulation and advertising dropping. The company has been mulling going fully digital, but that still isn't a sure bet in a market still handcuffed to conventional print and broadcast.
Foreign digital media firms such as Google, Twitter, and Facebook have a firm hold on the advertising market, funneling away millions of income in advertising revenues every month.
Radio Africa Group was in the spotlight for not remitting employee Sacco deductions for seven months last year. The company's ownership structure has also changed, with a South African media firm selling its majority shareholding in the company to a financial services firm for an estimated Ksh7.6 billion.
With a 49% shareholding in Radio Africa Group, the South African media firm leads in owning stock in the media firm ahead of individuals such as former Nairobi Governor Dr. Evans Kidero, Richard Ayah, Sudhir Vidyarthi, Kiprono Kittony, and co-founders Patrick Quarcoo and William Pike among others.
