Torstar, Postmedia announce community and daily paper deal by Francine Kopun
Nov 27, 2017
Source: Toronto Star
Canada’s two largest print and digital media firms announced Monday they have signed a deal to buy and sell 41 newspapers, mainly in Ontario.
Torstar Corporation said that it has purchased eight weekly community publications, seven daily community newspapers and two free daily newspapers from Postmedia.
Postmedia Network Canada Corp. announced a deal with Metroland Media Group and Free Daily News Group Inc., both subsidiaries of Torstar Corp., to buy 22 of Torstar’s community newspapers and two free commuter daily newspapers.
Torstar’s Metroland Media will continue to operate four of the seven daily community papers it is purchasing from Postmedia, while ending operations at the other three. The company will also end operations at the purchased weekly publications and commuter papers.
Postmedia intends to continue operating the Exeter Times-Advocate and the Exeter Weekender, but is closing all the other properties it acquired in the deal by mid-January.
“This transaction will allow us to operate more efficiently through increased geographic synergies in a number of our primary regions,” said John Boynton, president and chief executive officer of Torstar Corporation.
“By acquiring publications within or adjacent to our primary areas and selling publications outside our primary areas we will be able to put a greater focus on regions where we believe we can be more effective in serving both customers and clients.”
Metroland Media will continue to publish the St. Catharines Standard, Niagara Falls Review, Welland Tribune and Peterborough Examiner.
The goal is to drive efficiencies geographically, according to the company.
Effective Monday, the daily publications that will close are the Barrie Examiner, Orillia Packet & Times and Northumberland Today.
The eight community newspapers closing are the Bradford Times, Collingwood Enterprise Bulletin, Fort Erie Times, Innisfil Examiner, Niagara Advance, Pelham News, Inport News (Port Colborne) and the Thorold Niagara News.
All the publications were bought as part of the non-cash transaction — as the properties have approximately similar fair values — between Torstar and Postmedia.
The commuter paper Metro Ottawa, which employs 12 people full-time and 13 people part-time, including three in editorial, will close, as will Metro Winnipeg, with 12 full-time and 15 part-time positions, including four in editorial.
Both 24 Hours Toronto, which under Postmedia had no staff directly employed by the paper, and 24 Hours Vancouver, which had one employee, will be closed.
In all, nearly 300 full- and part-time employees will be affected, including those working in editorial, sales, circulation and distribution. All will receive severance packages.
“This transaction allows Postmedia to focus on strategic areas and core products, and allows us to continue with a suite of community-based products, in a deeply disrupted industry,” said Paul Godfrey, executive chairman and CEO, Postmedia.
He said the costs of publishing dozens of small community newspapers in the regions means that most of them no longer have viable business models.
“The growing strength of digital giants has caused seismic shifts in the allocation of advertising revenues — putting all media companies under massive pressure,” said Andrew MacLeod, president and chief operating officer, Postmedia.
Upon news of the closures, Canadian union leader Jerry Dias urged federal Heritage Minister Mélanie Joly to take action to protect print journalism.
Joly unveiled a cultural strategy in September that was criticized by industry experts for lacking expected measures that could have given a boost to Canada’s struggling newspapers.
At the time, she said Ottawa had no interest in bailing out industry models that are no longer viable, and would instead focus on supporting innovation, experimentation and the transition to digital platforms.
In 2016, John Honderich, chair of the board of Torstar, told MPs on the Canadian Heritage committee who were studying the issue that Canadian media were facing a “crisis” as market forces continued to shrink newsrooms.
“If you believe, as we do, that the quality of a democracy is a direct function of the quality of the information citizens have to make informed decisions, then this trend is very worrisome,” Honderich said.
He noted that readership remained vibrant for print and digital offerings.
On Monday, Dias, the national president of Unifor, Canada’s largest private-sector union, argued that helping print media out of a crisis does not have to be about propping up a failed business model.
“The federal government has to step up,” he said. “If the government wants to have a thriving industry, if they want to have freedom of expression, if they want to have journalistic integrity, then we’re going to have to find a mechanism to deal with it . . . You put money into journalism. That’s what the issue is.”
When asked Monday if news of the closures had encouraged her to rethink her approach, Joly said that the government will provide support in the coming months for local media as they continue to shift to web-based models.
“Of course, I’m sad to hear about these local closures and my thoughts are with the families affected,” she said. “We value the importance of journalism and that’s why we invest up to $75 million per year in local media.”
Joly did not specify details about the $75 million, although the federal Canadian Periodical Fund provides that amount annually to publications, including community newspapers.
After the news was announced, the Competition Bureau said it was planning a review.
The Commissioner of Competition can review transactions of all sizes and in all sectors “to determine whether they will likely result in a substantial lessening or prevention of competition in any market in Canada,” said Jayme Albert, a bureau spokesperson, adding the transaction can be challenged before the Competition Tribunal for up to a year.