Postmedia Network CEO describes newspaper business in Canada as ugly, ‘will get uglier’
The publisher’s CEO, Paul Godfrey, urges help from the Canadian government, but gets reminded that the newspaper chain has frequently advocated for lower government spending and less regulation of business
The CEO of Postmedia Network, the Canadian newspaper chain which publishes the National Post and Toronto Sun, described the newspaper business as ugly, and said it “will get uglier, based on the present trends that exist today.” Paul Godfrey was testifying in Ottawa, and urged the government to spend more on Canadian newspaper ads, and to give the industry tax breaks it keep it alive.
Godfrey is an imperfect messenger as Postmedia used its front pages to deliver a political ad in support of the conservatives in the last election, only to see the Liberals win the election. Just as there are (supposedly) few atheists in foxholes, there are few advocates for limited government once one’s business starts to tank.
“There have been no fiercer critics of subsidies to the media than the Toronto Sun and the National Post,” Liberal MP Adam Vaughan wanted to know. “How do you square your editorial position with your corporate position?” Godfrey’s answer was to deflect editorial decision to individual columnists or editors, though clearly the decision to splash a front page ad attacking the Liberals was a corporate decision.
Postmedia Network is owned by the U.S.-based private equity firm GoldenTree Asset Management, something Vaughan also pointed out during Godfrey’s testimony. Like many PE-backed firms that like to grow through acquisitions, Postmedia last year acquired the English language dailies from Sun Media, paying $316-million. “Why would we fund a failing business model that’s owned by U.S. interests?” asked Vaughan.
In February, Toronto Star business columnist David Olive wrote critically of the Canadian newspaper chain.
“For generations, Canadian law has forbidden foreign ownership or control of Canadian cultural assets. But after permitting the sale to non-Canadians of practically the entire Canadian-owned steel and mining industries, then PM Stephen Harper’s government signed off on Postmedia’s creation as well,” Olive wrote. “The Americans put a Canadian face on the deal by selecting Paul Godfrey, 77, as Postmedia’s CEO. Not by coincidence, Harper and Godfrey, a diehard Tory, are kindred spirits.”
Postmedia reported $225M Q2 loss last month, reporting that while total revenue grew thanks to its Sun acquisition, revenue from existing properties fell over 13 percent.