Yes, things are looking up at The Times of India. The country’s biggest and richest media house, which rang the alarm bells first with an unprecedented round of blood-letting last year, has just announced the end of recession. CEO Ravi Dhariwal wrote an endearing letter to all his staff recently to tell them that the management had decided to put some money in their pockets ahead of Diwali, a sort of bonus payout.
That is great news, not just for TOI staffers, but for all of us in the media, because when TOI cut costs, salaries and careers, that was enough excuse for many lesser mortals to blindly follow suit. So, TOI retracing its steps is decidedly good news, because there’s a chance the others might ape it once again.
Except that this time too, you definitely don’t want your managements to take TOI’s cue. To understand why, first read some excerpts from Dhariwal’s letter:
“Dear Friends, Last time I wrote to you, a few months ago, we were in the midst of a perfect storm. On the back of astronomical newsprint prices, and our own expansion, our costs had galloped. As this was happening, advertising revenues skid on fears of an impending recession. For the first time in many years, we saw a severe margin compression. For a few months, we actually lost money. It was clear that we needed to take a serious course correction.
“We took several measures to restore the company back to some semblance of financial health. We cut unnecessary expenditures, postponed some of our future projects, scouted the world for cheaper newsprint and also trimmed our organisation. Looking back, it was one of the most difficult periods in my career…
“All-in-all, I feel a lot more optimistic about our future, even in the short and medium term… The way you all rallied forth makes me absolutely sure.
“With this background, I am happy to inform you that our VC (Samir Jain) and our MD (Vineet Jain) have asked me to do something very pleasant. We are going to make an advance payout of 1/3rd of the TVP (target variable pay) amount planned for the year 2009-10. You will receive this soon, in the next few days. This amount will be adjusted once we complete the year closing in July 2010 and work out the TVP due to us as per company policy. I am sure this money is welcome in our pockets. I also think this is a measure of our combined optimism about our future. I thought I should share this with you before we hit the festive season.”
Let’s understand “the very pleasant” bit a little better. The Times of India, sitting on profits of 150-plus years, cuts staff salaries across the board because the company “actually lost money” for “a few months” and decides to pay out 1/3rd bonus of the next year in advance, recoverable in due course. Alternatively put, when The Times of India hurts, it takes staff salaries back to previous year’s levels and when it gets generous, it gives them one-third of one-tenth of their future earnings (assuming average variable pay is 10 per cent)!
And the staff is supposed to be ecstatic because the “money is welcome in the pockets” before they “hit the festive season”. Yes, guys, now go and shop till you drop. What a mean trick. It would have achieved nothing more than to open old wounds of the staff.
Some would argue that this is between the TOI management and their staff, so it’s none of our business. But it is. It is our business because The Times of India is the country’s most widely consumed media and what it writes in times of national crises, such as recession, is critical to us. The media, led by The Times of India, needed to examine how much of the bad times corporate India faced was because of actual recessionary pressures and question how much of it was caused by corporate day-dreaming, mindless expansions and outright greed. It needed to question why it was always that the top screwed up, but bottom paid up.
But none of that happened, because the media houses, led by TOI, were themselves guilty of committing the same grave errors at the top for which the staff at the lowest end paid dearly. For example, it was the Private Treaties that delivered the biggest blow to TOI’s health. The top thought up the Private Treaties route to riches. We all know who paid when the crisis came.
Similarly, NDTV went into all kinds of unwise expansion plans and sunk in hundreds of crores in bad projects. While it ended up being no where in its new businesses, it became an also ran in every news segment (English, Hindi and Business news) and completely botched up its MetroNation project. And when recession came along, it became a happy excuse to sack dozens of lower staff while not one CEO lost a job. In fact, in the middle of the sacking mayhem, it hired a sort of overall boss for NDTV Profit, whose compensation could have equalled the cost of a few dozen sacked employees elsewhere in the group.
That story repeated itself even in organisations that were not bleeding. AajTak and Zee News, the only two channels at the national level consistently raking in profits, held up hikes and cut back salaries, respectively. Both these companies showed handsome profits even during the recession period, but that has meant little good news for the staff (though Zee I know has reversed the 10-20 per cent salary cut). Little wonder then that corporate India’s profligacy and foolishness that must have contributed in equal measure to their near-death experience of the last year, went completely unquestioned by the media as a whole.
So, Mr Dhariwal, if your staff sees nothing “very pleasant” in your Diwali Dhamaka, don’t take it personally. You enjoy your Diwali.
(The views expressed here are of the writer’s and not those of the editors and publisher of exchange4media.com.)