This article first appeared in The Edge Malaysia Weekly on December 3, 2018 - December 9, 2018

DATUK Seri Wong Chun Wai, the CEO and group managing director of Star Media Group Bhd, will be retiring effective Jan 1, 2019. He will be leaving the company after a 34-year stint, in the last five years of which he served as its CEO and group MD.

According to an announcement by Star Media, Wong will also relinquish his directorship in all of the group’s subsidiaries effective the same date. However, he will continue to serve as a group adviser on editorial and corporate relations matters.

Star Media also says an announcement on his successor will be made in due course.

Wong’s departure comes when the media industry is facing huge challenges in generating revenue through advertising and subscriptions, and as sales numbers plummet as a result of technology disruption.

He held the mantle at Star Media during one of the most tumultuous times in the group’s history due to the evolving operating landscape and strong political undercurrents, which led to a change at the helm of the country, from the long-ruling Barisan Nasional to the Pakatan Harapan coalition.

As a 43%-controlled unit of the MCA, Star Media has been a casualty of the lack of support for the political party, the second largest member of the Barisan Nasional coalition.

Star Media’s flagship is The Star, the largest English language daily with a circulation of almost 176,000 from January to June 2018.

“It has been talked about for some time now. Like it or not, Wong leaves big shoes to be filled. He was a hands-on leader, having climbed through the ranks at The Star over the past 30 years,” says an employee who spoke on condition of anonymity.

Wong’s tenure was beset with difficulty, having began at the start of a challenging period for print media in Malaysia.

In the first few months of his tenure, Star Media reported a 25.8% drop in profit before tax (PBT) to RM192.59 million in its financial year ended Dec 31, 2013. PBT continued to slide, falling 20.3% year on year to RM153.42 million in FY2014. However, it improved 10.85% year on year to RM170.07 million in FY2015.

The improvement, though, could not be sustained and PBT dropped again by 14% to RM146.2 million in FY2016. The continued drop in revenue and profitability then prompted the Star Media management to review its assets and operations.

The group launched its subscription video-on-demand service, dimsum.my, in November 2016 in a bid to carve a share of the crowded market, taking on regional and global players such as Iflix, Netflix, HOOQ, Astro Go, Tribe and viu.

In May 2017, Star Media decided to sell its 52.5% stake in Singapore-listed events and exhibitions company, Cityneon Holdings Ltd, for S$115.61 million or RM360.18 million cash to Lucrum 1 Investment Ltd.

Star Media said the disposal would enable it to unlock its investment in Cityneon and focus on the expansion of its primary business activities. The sale brought Star Media a gain on disposal of RM206.86 million in the third quarter ended Sept 30, 2017 (3QFY2017).

While this gave Star Media a breather, the group continued to face challenges in its operations, especially its bread-and-butter print media. Falling advertising expenditure then saw Star Media offering 200 of its staff a mutual separation scheme and early retirement option last year.

In the nine-month period ended Sept 30, the group’s revenue dropped 15.6% to RM299.64 million due to lower income from both its print and digital, and radio segments. Print and digital revenue declined 15.8% to RM258.46 million year on year.

Nevertheless, Star Media recorded a year-on-year growth of 8.2% in its PBT to RM22.29 million, after stripping off the gain on disposal of the Cityneon stake in the third quarter of last year.

“Wong has been with Star Media Group for 34 years. He was appointed as group chief editor of The Star on Jan 1, 2008, and subsequently as GMD & CEO of the company on Nov 20, 2013 ... He has been a valuable member of the board and management team,” Star Media says.

The company closed at 75 sen last Friday, which gave it a market capitalisation of RM553.4 million. The stock hit a multi-year low of 71.5 sen on Oct 25.

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