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Closures and layoffs: fewer voices to be heard

For years now, business meetings in the media sector keep focused on how to respond to the crisis. Some of the main concerns include how to prevent major shifts towards new media formats and how to monetize their new information products. As for journalists and press workers, they have been discussing the drain on sources of employment and increasingly unpredictable working conditions.

The economic and employment situation in the Argentinian media sector saw a steep decline over the last few years. In 2018 free TV lost 47% of its market share as compared to 2014, whereas the radio sector lost 25% only in Buenos Aires. Sales of print media are at record lows, with less than 800,000 daily issues at the national level. In the meantime, news portal visits and social media information searches continue to increase, even though they still fail to yield enough profit for companies to compensate for the losses caused by the drop in traditional media.

According to the Buenos Aires Press Union (SIPREBA), over 3,127 media jobs were lost from 2016 to 2019. Over 50% were lost as a result of direct dismissals or media closures, while the rest represent voluntary or early retirement plans. The latter option to downsize workforces has been extensively used by large media companies. Trade unions estimate that this number exceeds 4,500 across the country.

Reports by SIPREBA show how the recent Government directly affected the situation of media workers, including the asset stripping and closure of media outlets belonging to former Grupo Veintitrés, one of the groups that benefited the most during Cristina Fernández de Kirchner’s tenure.

However, dismissals and voluntary retirement agreements in that period show that the Federal System of Media and Public Content (585 dismissals and retirements) and Clarín (562 cases, 158 shared with La Nación in agency Diarios y Noticias) rank among the companies with the largest number of layoffs.

Behind these companies are the media groups that benefited the most from official advertising during the Kirchner’s administrations and from the lack of action of the Ministry of Labor and ENACOM during the current administration: Grupo Veintitrés (521 staff less), Grupo Indalo (268), Electroingeniería (166) and Grupo Olmos (87).

Number of voluntary retirements and layoffs in Buenos Aires 2016-2018

Graphic Source: Sindicato de Prensa de Buenos Aires (SiPreBA)

Most media companies are concentrated in Buenos Aires, but it is not the only city hit by the crisis. According to the Rosario Press Union, in the city of Rosario and nearby areas, job instability has gone up and, since 2018 some 60 jobs have been lost because of “voluntary retirements”. These positions remain vacant, and new job opportunities are virtually non-existent. Over half of retirements happened in the city’s main media company, La Capital, which belongs to Grupo América, but is at the time in the process of being sold.

According to estimates by the Cordoba Press and Communication Trade Union, over the last year around 100 jobs were lost in Córdoba, mostly as a result of voluntary retirements in Grupo Clarín’s La Voz del Interior (60) and layoffs in Télam, Telefé Córdoba and other small media that closed down.

 

Companies, closures and non-compliance

The high number of dismissals results from the closure of radio stations, magazines and newspapers, and the downsizing of TV channels. Only within Buenos Aires, the numbers and cases illustrate a bleak scenario.

The economic situation of radio stations is critical, too. Over the last three years, the radio market in Buenos Aires faced inceasing closures, suspensions, delayed payments made in installments and transfers. In the AM radio sector, Radio América 1190 closed down; Rivadavia 630 went bankrupt; Belgrano 950 was off the air for a year until CNN took over its programming. El Mundo 1070 was asset-stripped and usurped by a businessman of dubious reputation; Del Plata 1030 is paying half the salaries it should; and Radio 10 is being managed by an official receiver due to the criminal charges filed against the radio owners (Cristóbal López and Fabián De Sousa).

The economic crisis has reached many FM stations including Rock and Pop 95.9, Mega 98.3, Vale 97.5, One 103.7 and Pop 101.5. Moreover, some stations have gone from having a busy schedule with large pools of staff to implementing an automated music only model, such as RQP 104.3, ESPN 107.9 or Blue 100.7.

On television, leading free TV networks face a bleak future. Telefe laid off some ten people in January 2019; Canal 9 presented by the end of 2018 a preventive bankruptcy plan before the National Secretariat of Labor to strip their staff and freeze salaries; TVPA froze salaries too and ceased to produce live content on weekends; C5N has been paying its workers in installments; Crónica TV has laid off some 20 workers; and CN23 dismissed all its workforce to rent out spaces.

In print media, the situation is even far more serious than in other industries. In Página 12, there have been 12 dismissals since 2016, supplements have been discontinued and collective bargaining agreements have not been fulfilled. In addition, in 2019 the company started a voluntary retirement plan. La Nacion and Clarín have resorted to launching voluntary and early retirement plans to terminate management employees. Together, both companies closed down news agency DYN, thus removing 96 jobs.

Besides, Clarín closed down its printing plant in Buenos Aires, with a total of 280 voluntary retirements. In terms of closures, since 2016, newspapers Tiempo Argentino (its employees created a cooperative to edit a weekly print version – [LINK to self-managed-media]), The Buenos Aires Herald, El Argentino, La Razón, Diario Hoy (La Plata) and magazines Veintitrés, Billiken, El Gráfico and Para Ti, among others, have no longer been in print.

The same owners of these large companies and media groups argue in favor of this contraction. Guillermo Campanini,  Head of Operations of Viacom Argentina (owner of Telefé), claimed: “Once the economy has been stabilized, labor agreements can begin to be discussed.” Daniel Vila, owner of Grupo América, said: “Until collective bargaining agreements are modified, it is very difficult for the media to survive.” Hernán Lombardi, Director of SFMyCP, publicly ventured that the media labor sector is “completely obsolete in the face of the technological revolution, which brings about astronomical production costs.”

Francisco “Paco” Mármol was of the same opinion when, in 2017, as a manager of radio stations Rock & Pop and Splendid, he stated: “If a radio station has between 100 and 120 employees, it can never be cost-effective. We need to understand the business side of media.”

Reasons and new scenarios

Analyzing new consumption patterns may provide some answers to explain the crisis. In Buenos Aires, free TV has lost 10% of its reach from 2017 to 2018. Compared to market numbers in 2014, the drop accounts for 47% (from 39.1 points to 20.9 points). In contrast, paid-content services saw an increase in their market share and, together, outperform free TV. In the radio market, numbers are similar – although without a paid-content option. Between 2017 and 2018, the market fell by 10%, while a comparison with 2014 numbers shows a 25% fall only in Buenos Aires.

In print, numbers also show a deep decline in circulation levels. In step with the global situation, over the last ten years (2007-2017), net print circulation fell by 40% (from 1.2 million issues to 730,000.). Clarín lost 46% of circulation, La Nacion, 19%, and Diario Popular, 14%. Given this context, the two leading newspapers in Argentina launched a subscription system that produced similar numbers: while Clarín reported having 120,000 subscribers in July 2018, La Nacion claimed 113,000 in August 2018. Many of them also receive a print copy of the paper.

In contrast, in line with the sector’s economic situation, the turnover rate in the audiovisual communication sector (radio and TV) shows a year-on-year variation of 28% from 2016 to 2017 (higher than inflation), with income reaching $23,865 million (USD 1,441 million). Out of the total figure, 2.7% is gained by local and community broadcasting (TV and radio) stations; 17% by the radio sector, 17% by pay-TV channels and 64.3% by free TV channels. The sale of advertising slots accounts for 85.7% of the income in the audiovisual industry.

In this respect, a review of the advertising distribution may help. According to the Argentine Chamber of Media Agencies (CAAM), the advertising turnover rate for 2017 totaled $30,693 million (USD 1,854 million), 39% above the 2016 number. The main sectors generating ad revenue are television (41%), internet (24%), print media (16%), public spaces (10%), radio (8%) and the film industry (1%). According to advertising auditing company AdCuality, in 2017 social media captured 25% of online advertising, whereas digital information media retained 36%.

Jorge Fontevecchia, owner and CEO of publishing house Editorial Perfil, assessed the new scenario: “Colonialists established a democratic system, with a sales department, an administrative department and vessels to ship away the profits. Nowadays, Google and Facebook do the same, they have a sales department that takes all the profit away from Telefe, La Nacion, Infobae, Perfil. That is the only thing they have, because they do not produce anything, and they do not even need vessels to ship the resources away.”

Another key factor to explain the crisis is the Government, not only the latest Presidents in office, but also the legislative and judicial branches.

As a result of more flexible regulations (or simply due to the lack of enforcement) and significant amounts of state advertising aimed at supporting some media outlets, the relaxation of entry barriers in the media sector led to a distortion of the market. With the new administration, this situation made a significant part of the system collapse. In addition, the absence of government and court intervention in labor conflicts, the lack of State policies aimed at ensuring the right of citizens to access diverse and plural sources of information, and the owners failure to fullfill their obligations as licensees of radio and TV services have exacerbated the problem. In fact, in spite of the country’s new administration, businesspeople currently continue to do as they please in their own best interests, mostly to the disadvantage of workers and society as a whole.

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