Dailies that will close are the Barrie Examiner, Orillia Packet & Times and Northumberland Today, while the free dailies schedule to close are the 24Hours Toronto and 24Hours Vancouver
The newspaper landscape in Canada was changed dramatically yesterday with the announcement that Postmedia, publisher of National Post, and Torstar, publisher of the Toronto Star, would swap community newspaper properties, then close the majority of them. The cynical business deal did not involve any cash, just a desire to lessen the competition for newspaper owners — and, of course, to cut costs.
“What makes this particularly difficult is that it means we will say goodbye to many dedicated newspaper people,” Postmedia executive chairman and CEO Paul Godfrey said in a statement. “However, the continuing costs of producing dozens of small community newspapers in these regions in the face of significantly declining advertising revenues means that most of these operations no longer have viable business models.”
Why didn’t the newspaper companies just close the papers without the deal? One would guess that this deal helps with cost cutting, but the two newspaper owners might have thought that they could avoid a review by regulations by doing it this way.
If so, they were wrong, as Canada’s Competition Bureau immediately said they wanted to review the transaction.
In any case, this is a serious blow to the Canadian community newspaper business, and journalists across Canada.
Here is the press release from Postmedia on the deal:
TORONTO, Ontario — November 27, 2017 -– Postmedia Network Canada Corp. owner of Postmedia Network Inc. today announced a transaction with Metroland Media Group and Free Daily News Group Inc., both subsidiaries of Torstar Corporation, to acquire 22 of Torstar’s community newspaper properties and 2 free commuter daily newspapers and to sell 15 of Postmedia’s community newspaper properties and 2 free commuter daily newspapers to Torstar. This is effectively a non-cash transaction as the properties have approximately similar fair values.
“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 Chief Executive Officer, Postmedia.
Postmedia intends to continue operating the Exeter Times-Advocate and the Exeter Weekender and will close the remainder of the acquired properties – which are located in areas serviced by multiple publications – by mid-January. These actions will deliver cost synergies while maintaining those operations that are sustainable and support Postmedia’s strategy. In addition, the transaction allows Postmedia to serve additional flyer and insert customers in certain markets using its existing distribution system.
“What makes this particularly difficult is that it means we will say goodbye to many dedicated newspaper people. However, the continuing costs of producing dozens of small community newspapers in these regions in the face of significantly declining advertising revenues means that most of these operations no longer have viable business models,” said Mr. Godfrey.
“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. “Our digital strategies are showing promising signs but we must take all possible actions in order to give these new initiatives time to grow momentum while managing the decline of legacy revenue streams and their associated costs.”
Postmedia has independently determined its plans for the acquired publications. The transaction is not subject to the merger notification provisions of the Competition Act and no regulatory clearance is required to close the transaction.