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November 30, 2000

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Asiaweek Time Asia Now Asiaweek story

Sondhi's Times

The boss of the M. Group is launching a daily, a satellite and an on-line service in a bid to become a media mogul. Are his plans too grand to be true?

By Julian Gearing in Bangkok

IT WAS A RARE appearance and one that seemed designed to offer the staff of the soon-to-be-launched Asia Times a bit of reassurance. Perhaps Sondhi Limthongkul sensed it was needed; journalists are a skeptical bunch by nature, and some of the newspaper veterans had been involved in other ambitious projects that shone for a brief moment then faded away. Dropping in unannounced, Sondhi waded into a crowded editorial office and gave one of his characteristically upbeat assessments of the paper's prospects. "Don't worry about the money," he told editors who know only too well how dicey the publishing game can be. "I have long pockets."

But exactly how long can those pockets be? For starters, Sondhi and his partners will cover the $20 million start-up costs for Asia Times, a regional business daily that is to hit the newsstands Dec. 6. Then they are committed to putting up another $40 million into the paper during its first three years - though they don't expect profits for five to seven years at the earliest. While they are waiting to recoup the money, Sondhi and company are to bankroll an on-line news service, help launch a $200 million advanced satellite in 1997 and, further down the line, set up a consortium of TV broadcasters to cater to audiences in every nation in the region.

All this is on the go while the core publishing businesses of Sondhi's holding company, the M. Group, are suffering from rising newsprint prices and overstaffing. The publishing arm, Manager Media Group, recorded losses in 1994 and the first half of 1995 and the boss says the M. Group will have to shed 30% of its 5,000 employees.

Sondhi, a fit-looking 48-year-old with little time to waste, has never let bad news and naysayers slow him down. Part dreamer, part schemer, the one-time journalist has silenced doubters before with his often hard-hitting Thai publications, such as the Phujadkarn daily and its weekly and monthly sisters. Indeed, in just over a decade he has established a growing and diversifying publishing-based group - and a reputation to match as a smart, though at times incautious, businessman.

While still a minnow, as one analyst put it, in comparison to other media moguls, Sondhi clearly wants to become Asia's answer to Western giants Rupert Murdoch and Ted Turner. "I am creating an integrated broadcasting and communications network: satellite, broadcasting, information database and print media," he told Asiaweek in an exclusive interview. What's more, in Sondhi's "vision" the network will stand out as a distinctly Asian voice. "When I die," Sondhi says, "I want to die as a pioneer - as the first Asian to get up and fight the Western press."

The reaction to Sondhi and his schemes ranges from curious to perplexed to incredulous, but he remains undaunted. In fact, the man who once described himself as "a simple journalist who just got lucky," maintains that danger invigorates him: "I take a lot of business risks. It's important for [business] growth, and that's important for keeping my soul in my body."

If true, then his Asia Times venture should provide Sondhi's soul plenty of grounding. Even his super-charged right-hand man, Suradet Mukyangkoon, admits rising newsprint prices and heavy competition have made the launch problematic. But he believes the market is ready for another regional business daily, which he sees as a flagship for the group's larger media ambitions. Sitting in the M. Group's modern headquarters in central Bangkok, Suradet, 35, says Asia Times will provide a vital news-gathering network, as well as a "brand name," to fill the group's upcoming satellite and on-line services. "Asia Times is a loss leader for the whole concept," he says in comments that seem to contradict staffers who claim the paper will stand on its own in a few years.

Sondhi is certainly not cutting corners. Staffers are reportedly being paid well and the operation is amply funded. For support, links are being set up with other publications of the Manager Media Group division: the Thai dailies Phujadkarn and Financial Day, and Manager, an English-language monthly magazine. Using ground lines and satellite services already in place, Asia Times plans at the outset to print 30,000 copies, five days a week in Bangkok, Singapore and Hong Kong. It hopes to increase circulation to 40,000 by mid-1996 and by the end of that year begin printing in London, Frankfurt, New York and Los Angeles. The company has longer-term plans to print the broadsheet in the Philippines and Australia as well.

But can a new regional paper make money? Some powerful Western-owned dailies are already in the field, such as The Asian Wall Street Journal, the International Herald Tribune and the Financial Times. Asia Times editor-in-chief Pansak Vinyaratn, 53, says his paper will thrive because it provides an alternative. "Asia Times is not an American-attitude newspaper," he says dismissively. Still management seems to see The Asian Wall Street Journal as the principal foe. An Asia Times marketing presentation talks of "coercing The 'Asian' Wall Street Journal into its realistic position" as just another American observer of Asian affairs.

One Bangkok-based analyst who tracks print media says advertising revenues for a niche-market regional daily don't come easily. He figures Asia Times will live or die based on whether it can generate sufficient sales. Shane Matthews, a media analyst at the brokerage firm James Capel Asia in Singapore, agrees: "Within any financial paper the scope for advertising is narrower. What you need is a cover price that can cover the costs." Asia Times cover prices just about match those of The Asian Wall Street Journal. The paper seems to be making a strong advertising effort as well. Pansak says the interest shown by potential advertisers has been encouraging. Ads by Cathay Pacific, British Airways, Star TV and IBM are conspicuous in pre-publication copies, though special cut-rate deals are the norm for new publications. The paper is using some of the marketing network that Sondhi has built up through his 30 publications in Thailand and further afield through products such as the regional magazine, Asia, Inc., a three-year-old Hong Kong-based title that even Sondhi admits is losing money.

For Pansak, pride is involved. He wants the venture "to prove that a regional paper of some quality can be produced out of Asia." A former prime-ministerial adviser to Chatichai Choonhavan, Pansak was the founder and editor of the influential Jaturat (Square) magazine in the 1970s. He is also a longtime friend of Sondhi - which may help explain his optimism. "I hope we sell in (the Indian hill station of) Simla. Wouldn't it be lovely to have tea and read Asia Times," the editor-in-chief says with a laugh and a hint of an English accent, partly a legacy of a stint at the London School of Economics in the 1960s.

Down in the air-conditioned offices of metropolitan Asia, businessmen may not be so blessed with time or interest. "The concept is a good one and admirable," says one of Sondhi's media competitors in Bangkok. "But it will be a very difficult task. [M. Group executives] may well be overextending themselves." Matthews of James Capel says Asia Times has the potential to succeed as Asians become more affluent and interested in regional business. Still, he says, "I'm not sure that the critical mass for a purely Asian business paper has been achieved yet."

Other recent newspaper efforts, particularly in media-rich Bangkok, do not offer encouragement. Business Day, dubbed Thailand's first international business daily, started as a regional paper last year in a joint-venture between the Thai Premier Publishing Group, Singapore Press Holdings and others. It is now struggling to circulate 10,000 copies and runs few advertisements. The metropolitan daily Thailand Times has an even lower circulation and less than 200 subscribers two years after its launch, an employee says.

Jon Marsh, now ensconced as managing editor at Asia Times, knows the risks only too well. A former editor at Hong Kong's South China Morning Post, he is one of a handful of journalists who were involved with the February 1994 launch of the Hong Kong daily Eastern Express by Oriental Press Group. The paper lunged from crisis to crisis and reportedly continues to lose money at an alarming rate. "With Asia Times we have had a much longer lead-in period, whereas with the Eastern Express it was very quick, bordering on the suicidal."

Skeptics have been less vocal about the M. Group plans to own and manage a satellite. After lengthy negotiations with the Laotian government, Sondhi recently signed a deal in which his Asia Broadcasting and Communications Network (ABCN) will launch a high-powered unit capable of broadcasting direct-to-home over Asia. Due to blast off at the end of 1997 and become operational in early 1998, L-Star 1 will offer as many as 200 TV channels with three footprints covering the Indian subcontinent, Southeast Asia and greater China, with the potential to reach over 2 billion people.

After the launch, the satellite will be handed over to Laotian authorities to operate for a period of 30 years. ABCN has an 80% stake in the venture. A second satellite is scheduled to lift off in 1999. "The satellite is one of the most advanced and powerful units in the world," says Peter Newman, marketing director of Canada's Telesat, which is advising the M. Group on the project.

"My understanding is that ABCN is like a parent company for Asia Times," says David Peters, deputy managing editor, who has been with the Manager Media Group for several years. "The satellite project involves Khun Sondhi's drive to become an information provider on a regional level." The newspaper's network of correspondents and its database will be harnessed to provide Asia-wide business and economic information.

But while offering information services is part of the picture, Sondhi has a grand plan for a partnership of new and existing broadcasters. The idea is for the M. Group to create or link up with a TV broadcaster in each country and to join them in one giant pan-Asian network. Suradet explains: "ABBC, or the Asia Broadcasting Business Company, involves broadcasting for the whole region. ABBC will provide a consortium in Asia, with The M. Group as promoter, but this doesn't mean The M. Group wants to control it."

How will Sondhi get the funding for all these ambitious projects? Two business analysts who asked not to be named say he has made a lot of money playing the stock market, a claim Sondhi contemptuously labels one of many "myths" about him. "There were times when people said I got my money because I was involved in drugs," he scoffs. "That's a very cynical view, but I don't blame them because this is how people around here think." Sondhi told Asiaweek that he is personally financing Asia Times. "This is my own money," he said. "I enjoy spending and backing the things I believe in."

Like some other Thai businesses, though, transparency does not seem to be a hallmark of the M. Group's finances. Analysts say his companies are structured to be leveraged one against the other and it's difficult to tell what's going on where. One analyst said he wasn't recommending Manager Media Group stock even though it is virtually at an all-time low.

Still, Sondhi has attracted investors by entering sectors that are the darlings of the Thai economy. The feeling among financial analysts and other observers is that his projects start off with an explosion, attracting a lot of investment and interest. But after the glow disappears, the day-to-day operations turn out to be weak. Even Sondhi recognizes that he has a short attention span. "You give me a fortress to attack, I'm pretty sure I can attack it," he says. "But once I overtake that fortress I don't know what to do with it. I have to move on."

Despite the high profile of his stable of publications, Sondhi remains something of an enigma in Thailand and is virtually unknown in the rest of Asia. "He doesn't want a high profile; that is something personal," says Suradet. "He's not a public guy, but the people that have to deal with him know him quite well."

Suradet has a point. Sort of. Sondhi has hardly been media-shy during the Asia Times launch. And he has built up a wealth of high-powered political and business contacts across Asia, the U.S. and Europe. When asked about his connections, Sondhi says, "I don't have any serious political contacts." But after a press conference to announce the Laotian satellite deal, Sondhi hosted a dinner for several politicians and businessmen, including Thai Deputy Prime Minister Chavalit Yongchaiyudh and an old friend, Justice Minister Chalerm Yubamroong.

The former journalist has also made a point of surrounding himself with bright, people who tend to be on his wavelength - and often streets ahead of others their own age. Several trace their roots back to the 1960s and 1970s when ideologies clashed and students took to the streets.

Born to Chinese immigrants in Bangkok, Sondhi first tasted student activism at UCLA, where he studied history. "When I went to school in California, I always had a dream that I would be back and I would be running a regional paper," Sondhi says. Keen to get into the action, he became a reporter for the student newspaper, The Daily Bruin, from 1966 to 1969, a time of increasingly violent protests against U.S. involvement in the Vietnam War.

The agitation on U.S. campuses was echoed in the student activism he found on his return to Thailand. Sondhi took up work for the newspaper Prachatipatai (Democracy) as reporter and managing editor from 1973 to 1974, running into some of the people who would later join him in his media ventures. Sondhi had an outstanding political mind, a friend says, and wrote insightful exposes of the political developments that led to the bloodshed on Oct. 14, 1973, an event that brought the government down.

Pansak says the period provided valuable lessons. "Sondhi and I didn't come through a banking background, we came through a journalism background in the 1960s and 1970s in Asia when the ideological divide was great," he says. "We went through this not only as journalists but as publishers in trying times. We, unlike others, have tried to do things before and we have failed."

One episode which appears to have had a profound effect on Sondhi began in 1976, when he set up the Advance Media Group with real estate investor Paul Sittiamnuay, who was known as PSA. The group produced four publications, including the short-lived English-language daily Business Times, where Sondhi was an editor. Though that venture sounds a lot like his current one, it is not mentioned on Sondhi's recent CV. The newspaper collapsed after PSA got caught up in a real estate scandal, went bankrupt and left the country. Sondhi soldiered on, and in 1979 set up his own company, Karawek, which published the women's magazine, Pooying, from 1980 to 1982.

A milestone came in 1982 when he set up the business monthly Phujadkarn, which he started producing in one of the rooms in his father's house. "He did 90% of the writing, layout and selling of the ads himself and within a short time the publication was turning over a million baht [$43,000] a month," a friend says. The young publisher was swept along by the surging Thai economy and four years later began a weekly of the same name.

In 1988, Sondhi created the Manager Company for his publications and set up a monthly English-language magazine, Manager, a year later. In 1990 he started Phujadkarn daily. That year he listed the Manager Company on the Stock Exchange of Thailand and used the money to expand, establishing Eastern Printing Company, one of the country's largest commercial plants. Manager Information Services came next, followed by Direct Marketing Services and the acquisition of International Engineering Co. (IEC). In 1992, Sondhi formed the M. Group, bringing all the companies under one umbrella.

A glimpse of Sondhi's regional and international ambitions can be seen in Asia Inc. magazine, in his failed attempt to buy the troubled United Press International news agency and in his purchase of the ailing Buzz magazine in California. Though Buzz is still losing money, he formed a joint venture to open a Chinese-language Buzz in Guangzhou called 7 Days.

Today Sondhi is said to own 70% of the M. Group, which reported total revenues of $193 million, total assets of $438 million and a net profit of $4 million for 1994. "Sondhi is not the biggest media boss in Thailand if you compare him to the massive sales made by the Thai-language daily Thai Rath," says Youssef El-Khouri Abboud, an analyst at Wall Street Finance and Securities in Bangkok. "But he has had a major effect on the market with his publications and he stands out."

Tchaisiri Samudavanija, who runs the Manager Institute of Innovative Journalism, first met Sondhi in the 1970s. Bouncing along a muddy road into the hills of Saraburi, north of Bangkok, Tchaisiri says, "People like Sondhi are on the cutting edge of communications technology here in Thailand." Tchaisiri is eager to show off the site for a satellite dish and a utopian-like school and think tank he is setting up, one of the many M. Group offshoots that are supposed to link Sondhi's empire with the world.

In something of a metaphor for Sondhi's plans, Tchaisiri gestures at the surrounding hills. "You see the roads are getting better," he says. "There are more roads leading to Laos, Cambodia and Burma so that Thailand will definitely become a crossroads." As the back roads of Asia open up, he says, so will other forms of communication. Millions more homes could soon be receiving TV programs beamed down by satellite. In a few years time, many more may be watching channels care of Sondhi Limthongkul - that is, when or if his dreams get off the ground.

This edition's table of contents | Asiaweek home



U.S. secretary of state says China should be 'tolerant'

Philippine government denies Estrada's claim to presidency

Faith, madness, magic mix at sacred Hindu festival

Land mine explosion kills 11 Sri Lankan soldiers

Japan claims StarLink found in U.S. corn sample

Thai party announces first coalition partner


COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state


COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness

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