The Observer closure: Inside woes of the blue masthead

Former staffers tell Crime24 on condition of anonymity that the newspaper has not only been bleeding staff but many other elements that has considerably weakened its standing. Many cite management weakness.

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MEDIA | The Observer newspaper has been sealed off over non-tax compliance, with Uganda Revenue Authority saying the blue masthead has been operating in arrears amounting to Shs2.9 billion.

On Wednesday, URA officials sealed off the newspaper’s head office at Tagore Crescent in Kamwokya, Kampala. But The Observer disputes URA’s figures, saying in a statement that it has had back and forth meetings with the tax collectors over “discrepancies between their figures and ours.”

Sendo Cleaners

“There is a miscommunication between [URA’s] enforcement department and the domestic tax department. Our appeal and negotiations were not communicated,” the statement, posted on the newspaper’s Facebook page, said.

“The enforcement department proceeded without being updated by the domestic tax department. We are in talks to see to it that this problem is sorted out as soon as possible.”

But Ian Rumanyika, URA public and cooperate affairs manager is quoted by The Independent as saying The Observer failed to meet their part of the bargain in recent agreements with the tax collectors.

“We have been in negotiations with The Observer for a quite long. There is a memorandum of understanding which they didn’t fulfill. We expected them to fulfill it in Installments first in January and the last one in February as agreed, but we have waited in vain.” Rumanyika is quoted as saying.

The Observer on last ink?

The Observer’s latest troubles with URA might look like a benign scab from the nostril but insiders and several persons with privy information have told this news website of underlying sores that have been threatening the newspaper’s nose for news and detail.

“My former workplace’s directors are working so hard to collapse the paper but Aliro’s ghost are still refusing,” offered a former reporter at The Observer.

Ogen Kevin Aliro, one of the founders of Monitor Publications Limited, led a walkout of journalists in December 2003 to co-found The Weekly Observer. He died in November two years later, leaving behind revered contribution to Uganda’s contemporary media history.

But the Kamwokya-based weekly newspaper has faced one too many upheavals of late that its ink is probably drying. The newspaper sales have been dwindling faster than wetland cover in Uganda. From selling slightly over 20,000 copies ten years ago and dreaming of becoming a daily, The Observer has been labouring to sell 2,500 copies lately.

Five years ago in April 2014, The Observer newspaper reported about Standard Media Group of Kenya spreading its wings onto the Ugandan market with acquisition of shares in Nile Broadcasting Service (NBS TV), but the newspaper just stopped short of indicating how much more of the bite the Kenyan media giants wanted to chew in Ugandan media.

The Observer was their other ‘colonisation’ project and the Kenyans made they move known: they would buy into The Observer and help improve it from the average 2,500 copy sales it had dipped to and also grow its digital ears.

Apparently, management of The Observer looked at the Kenyan media investors like the bereaved would a jester at a funeral; they did not even blink at the ‘bad joke’ from the Kenyans. Not all of them though, as some managers apparently felt that even a bereaved did not smile at a funeral, they would still talk.

“The problem at The Observer all deteriorated when they refused to merge with The Standard Media Group,” said another former employee. “Economy was hard and needed more capital, adverts were low and really sh*t, if you get what I mean.”

Falling on hard times

Three years after turning down Standard Media Group advances — as well as others from suitors in the region and beyond — The Observer found itself head-first on hard times. Management called a strategy meeting to discuss way forward.

James Tumusiime, then the managing director, told the editorial staff after the October 2017 meeting that management had decided to scale back from tri-weekly to weekly because it had become financially unsustainable to print three editions per week.

The painful decision Tumusiime announced was only hurting to directors and shareholders. The only staffers who would feel immediate pinch were freelance contributors whose options for more bylines had been reduced.

However, while the directors continued to milk from the paper and increasing their pay while not investing more, the staffers down the value chain of the newsroom bore the brunt of the mismanagement.

Tumusiime had also announced cost-cutting measures that saw the media organisation cease serving free lunch. They also scrapped provisions of drinking water and sugar and limited reporters facilitation to special cases.

“This frugality was the last straw on the back of many experienced reporters and they started leaving one by one,” said a staffer in confidence.

“Things like medical bills for staff and their dependents started receding into past memories, while remitting NSSF contributions ceased to be,” added a former staff.

Carol Nakazibwe, the head of human resource and administration, could not respond to queries on the matter from this news website, while officials at NSSF could not readily confirm The Obseerver’s status on workers remittances.

Edrinnah Ddumba, the NSSF public relations officer, said they are presently running an amnesty campaign for which all companies that have defaulted have been given time to clear up.

But Emmanuel Mutayizibwa, Robert Madoi, Racheal Ninsiima, David Lumu, Hussein Bogere, Shifa Mwesigwa, Ssemujju Nganda, Edward Echwalu, Patience Akumu, among other staffers, and senior editor Richard Tumusiime left the newspaper — although some had been pushed out and at least one fired for misconduct.

Moses Talemwa followed the exodus late last year to add to the woes after managing director James Tumusiime had called time on his blue career in June 2018.

“Everyone told those guys to sell but they don’t want to. JT [James Tumusiime] got fed up (and his migraines weren’t helping) of leading people who were adamant in the face of a looming crisis so he opted out,” said a former editor at the newspaper.

Facing a crisis, the paper moved to leverage digital. Initially, the plan was to pay reporters for content published online separately. The company needed their morale to boost online content.

But that promise never came to pass. Reporters were only paid for articles published in newspaper. They abandoned filing contents for online and only sourced content they would file in ahead of print edition deadline.

The website took a toll. Worse still, Frank Kisakye was the lone soldier on the site.

“Then they started paying guys basing on who has more influence in the newsroom. Those close to senior managers would be called in to pick their envelopes months into delays. Others would go more than two months before payments,” the source said.

Attempts to get a comment from Pius Katunzi, the business development director, were not fruitful as he, too, did not respond to our inquiries. Former editor Kavuma also opted to not commit comments on the direction the newspaper is taking.

As the financial pulse of the company weakened, URA came knocking badly because it was demanding over millions in arrears that included Pay As You Earn and other taxes.

“Around this time, there was a major scandal involving URA and the paper was kissing up to the tax collectors by running more positive angles,” the source added.

It appears URA had then postponed their raid until Wednesday when they finally saw no reason to hold back the padlock.

While The Observer will no doubt negotiate and have URA unlock their head office to allow business to continue, the fact that the tax collectors finally got fed up and took action suggests they do not see The Observer on a footing firm enough to get back at them with decisive news reporting.

In the last 14 years, The Observer has seen more newspapers come and fold but there are fears that the blue masthead is now gazing at the blue of the sky. And, like a man remotely aware that the life support machine that is keeping him vegetative is about to be switched off, it is painful.

“It will be a miracle if the paper is around by this time next year,” said a former staffer.

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