Centre, state govts owe huge dues of advertisement money to media industry, INS tells SC

The Central and state governments' advertising arms owe between Rs 1,500 crore and Rs 1,800 crore to various media houses going by industry estimates, the Indian Newspaper Society(INS) has told the Supreme Court, and expressed fears that there is little prospect of recovering the arrears any time soon.

The INS made this submission in an affidavit while highlighting the financial constraints faced by the media industry which was also flagged by the News Broadcasters Association (NBA).

In a separate affidavit, the NBA said due to spread of coronavirus and lockdown measures, the business of the entire industry which was already under a deep financial constraint, has been "extremely severely affected".

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Terming the situation as "unprecedented", the NBA further said that no packages or measures have been announced for news broadcasters by the government, even as their business collapsed.

The affidavits by the INS and the IBA were filed in response to the notices issued by an apex court bench headed by Justice N V Ramana on a PIL by three journalists bodies--National Alliance of Journalists, Delhi Union of Journalists and Brihanmumbai Union of Journalists.

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The three journalists bodies had alleged that the employees including scribes are being terminated and steps like unilateral steep wage cuts and sending workers on indefinite unpaid leave are being taken by managements citing the nationwide lockdown since March 25 to contain the coronavirus pandemic.

"As per various industry estimates, Directorate of Advertising and Visual Publicity (DAVP) owes between Rs 1,500 and Rs 1,800 crore to various media companies. A large chunk of this i.e. Rs 800-900 crore is owed to the print industry alone. Such amounts have been outstanding for several months and there is little prospect of realising the same any time soon,” the INS said in its affidavit.

It further said there has been a drop of approximately 80-85 per cent in government advertisements and a drop of approximately 90 per cent in other advertising due to the nationwide lockdown.

The INS said media and entertainment sector largely thrive on advertisement expenditure by industries such as FMCG, e-commerce, finance and automobile and they are hit by economic slowdown.

“With advertisement revenues now hitting rock bottom due to COVID-19 and online platforms gaining hype, the key sources of revenues for the print media are on the verge of depletion,” it added.

Due to lack of advertisements, several newspapers have been forced to drastically reduce their number of pages and newspaper establishments forced to shut down physical editions of newspapers because vendors have refused to deliver, the INS said.

“Moreover, many resident welfare associations have banned the entry of any outsiders into colonies and buildings. As a result of newspapers not reaching homes in bigger cities, advertising revenues have taken a big beating,” it said.

“The net circulation revenue which is the cover price of a newspaper covers only a small portion of the total cost. Hence the lifeblood of a newspaper is revenue from advertisements.”

The affidavit said not only has the government drastically reduced advertising since much prior to the crisis, there are calls by political parties to stop government advertising altogether in order to save money.

The INS and NBA both have sought dismissal of the plea of journalists' associations, contending that several news broadcasters are their members and all being private bodies, no writ can be issued against them.

The PIL had sought a direction to “all persons publishing newspapers or engaged with media work including digital media and employing journalists and non-journalists for this purpose to treat all termination of service notices issued, resignation from services received from employees pursuant to a request from the employers whether oral or in writing, all wage reductions, all directions to go on leave without pay, taking place after the announcement of the March 25 lockdown as suspended with immediate effect until further orders”.