1. Stop the presses!
Thursday morning, Transcontinental Media announced that it was divesting itself of its Atlantic Canada media holdings:
Transcontinental Inc. announced today the sale of its publication portfolio in Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and New Brunswick to SaltWire Network Inc., an important independent local media group which publishes the daily newspaper The Chronicle Herald, among others. This transaction is effective immediately and includes the sale of 28 brands and web-related properties, four printing plants operated within its Media Sector, commercial printing activities in the province of Newfoundland and Labrador as well as distribution activities in Atlantic Canada. TC Transcontinental remains the owner of the two plants operated within its printing division in this region, which are Transcontinental Halifax, located at 11 Ragged Lake Blvd. in Halifax, and Transcontinental Prince Edward Island, located at 169 Industrial Drive, in Borden-Carleton.
SaltWire? It sounds like an electrical failure, another one of Nova Scotia Power’s excuses for blackouts, a variation of salty fog. Might as well call it Squirrel on a Transformer Media, Inc.
Saltwire Network, Inc. was registered with the Nova Scotia Registry of Joint Stock Companies on March 22, using as its address Mark Lever and Sarah Dennis’s family home in the south end.
The company announced itself in the video above, explaining that:
Salt. It’s in our ocean waters and runs through our veins. It’s as capable of adding flavour as it is of drying out toxin.
Drying out toxin? Whatever could they mean? Could it be the “headwind of union sympathy”? More on that in a moment. The video continues:
Wire. It’s a connector and a bridge. It can be both flexible and strong, rigid and pliable. Both a conductor and information highway, it has the power to light us up and keep us grounded.
So we’re already into gobbledygook businessspeak, throwing every buzzword within reach onto the wall, hoping that a strand or two will stick. But then the advert takes a dark turn into sadomasochism:
It is a tie that binds.
In addition to its existing properties — The Chronicle Herald, the Casket, and the weekly pink bag garbage deliveries in HRM — SaltWire has now owns:
• Advertiser (The), Grand Falls-Windsor, N.L.
• Amherst News, N.S.
• Annapolis Valley Register (The), N.S.
• Aurora (The), Labrador, N.L.
• Beacon (The), Gander, N.L.
• Cape Breton Post, N.S.
• Citizen Record (The), Amherst, N.S.
• Colchester Weekly News, N.S.
• Compass (The), Carbonear, N.L.
• Guardian (The), Charlottetown, P.E.I.
• Gulf News (The), Port aux Basques, N.L.
• Journal-Pioneer (The), Summerside, P.E.I.
• Labradorian (The), Labrador, N.L.
• News (The), New Glasgow, N.S.
• Northern Pen (The), St. Anthony, N.L.
• Nor’wester (The), Springdale, N.L.
• Packet (The), Clarenville, N.L.
• Pilot (The), Lewisporte, N.L.
• Queens County Advance (The), N.S.
• Sackville Tribune Post, N.B.
• Southern Gazette (The), Marystown, N.L.
• Telegram (The), St. John’s, N.L.
• Tri-County Extra (The), N.S.
• Tri-County Vanguard (The), N.S.
• Truro Daily News, N.S.
• Valley Journal Advertiser, N.S.
• Western Star (The), Corner Brook, N.L.
SaltWire also purchased the novanews.com website, and four printing presses — two in St. John’s, one Corner Brook, one in Sydney.
There are two obvious questions. First, how can a company crying poverty in its fight against the Chronicle Herald newsroom union suddenly find the money to buy nearly every paper in Atlantic Canada? Second, what’s the business strategy?
To answer the first question, let’s turn to Mathew Georghiou, who has a good speculative explanation of the financing of the deal:
I’m guessing the sale price may have been around $30 million for everything. I’m basing that on a number of factors, including the price that Transcontinental paid SunMedia for 74 community newspapers back in 2013. (It shut down nearly one-third of those newspapers shortly thereafter.)
How was it financed?
Integrated Private Debt Corp, based in Toronto, financed the transaction. I’m guessing that the financing was a leveraged buyout, meaning that the assets of the acquired businesses are used as debt collateral, which likely includes buildings, printing presses, etc. This is what would likely make funding a news publishing business in the midst of a declining industry more acceptable to the financiers. (Fun fact: A leveraged buyout is essentially how most people finance the purchase of their own homes, but it’s called a mortgage).
Back in 2003, Integrated Private Debt Corp financed Sarah Dennis’s 2003 purchase of a new $23 million printing press and the acquisition of The Casket, the Antigonish weekly newspaper, and the Quad County Extra, the Canso Strait area version of the HRM garbage delivery.
The purchase of the printing press was, in a word, stupid. Just as the dead tree newspaper industry was plunging into a death spiral, Dennis doubled down on print instead of repurposing her company for the internet. To be sure, axing the dead tree would have been painful, resulting in layoffs and a significant downsizing of Herald operations, but 2003 was the optimum point in time to make the transition. Dennis had to decide: was the Herald a news operation or an advertising operation? She chose the latter, and now the printing press sits like a concrete tire of debt around the newspaper.
That brings us to the second question. Stephen Kimber writes:
So Mark Lever — a twice failed, never succeeded businessman who has already managed to turn the Halifax Herald into the palest imitation of a newspaper by eviscerating its newsroom and alienating its readers while the Internet chows down on what’s left of his lunch — has managed to borrow millions he doesn’t have against assets he didn’t build in order to create an incongruously named company that didn’t exist a month ago to buy 28 more publications he still won’t know how to run in order to… Well, in Mark Lever’s alternate-facts reality, the reality that his audacious scheme makes no business, journalistic, or common sense probably makes it make perfect sense to him.
Call it “innovation.” He would.
This article is behind the Examiner’s paywall and so available only to paid subscribers. Click here to purchase a subscription.
As I see it, the only way the purchase of Transcon assets makes any business sense is to assume that we’ll see continuous consolidation, mergers, layoffs, and closures, ultimately leading to the shuttering of the Chronicle Herald itself. Oh, Lever and Dennis won’t frame it that way, but that’s the end game.
Consider that Transcontinental has already been consolidating its Maritime holdings. In January 2016, the company merged the Yarmouth Vanguard, the Digby Courier, and the Shelburne Coast Guard into one paper called the Tri-County Vanguard.
In April 2016, Transcontinental consolidated the Kings County Advertiser with the Hants Journal to become the Valley Journal-Advertiser, and the Kings County Register and the Annapolis County Spectator were consolidated to become the Annapolis Valley Register. The Hants Journal had been one of the oldest newspapers in Nova Scotia, operating since 1867.
The Herald has also been merging its properties. In December 2015, it consolidated the Casket and the Quad County Extra, essentially turning the vaunted Casket into a throw-away flier. The new product has an “editorial direction that devalues the work of community newspapers themselves,” wrote former Casket reporter Adam Cooke.
Moving forward, we can expect more consolidation and layoffs. The Charlottetown and Summerside papers seem likely targets for a merger, as do the Amherst and Sackville papers.
Beyond mergers, we’ll get shared content. However it’s branded, in effect we’ll end up with one regional paper in each province (or even all the Maritimes), collected with weekly community supplements.
Consider Cape Breton
I used to regularly criticize Ian Thompson, a relative of Sarah Dennis and former provincial bureaucrat who had become the associate publisher of the Chronicle Herald, but he was at least trying to save the Herald.
Back in March 2014, Thompson doubled down on the Herald’s Cape Breton coverage, directly competing with the Cape Breton Post. The effort included starting a weekly paper called The Cape Breton Star, and reported Kelly Toughill:
Thompson hired a Post reporter and the former editor of the Post to staff the augmented Chronicle Herald bureau, which will now have two reporters and a photographer instead of one reporter. (The previous Cape Breton reporter has been transferred to Halifax.) The Cape Breton office will also have two advertising staff dedicated to selling ads on the island. The Cape Breton edition has a different front page than the Halifax or provincial editions of the paper, and Cape Breton coverage has increased in sports, business and the arts.
But by the end of 2014, Thompson either fled the lunacy of, or was pushed out by, Dennis’ recently acquired husband Mark Lever, who was now president at the Herald and making all business decisions.
In January 2016, Lever pushed the Chronicle Herald newsroom union into a strike. In September, Lever shut down the Cape Breton Star, reported Joan Weeks for the CBC:
The Chronicle Herald has announced it’s shutting down the Cape Breton Star, its weekly publication on the island.
The company said in a statement Thursday that the Cape Breton Star has “come up against a prevailing headwind of union sympathy in industrial Cape Breton.”
The Star was launched in May 2014, a member of the Herald’s community newspaper network. The company said the publication once received strong community support, but the situation changed after the strike began. The Herald said it will continue to publish a Cape Breton edition of the newspaper.
The Herald’s three striking Cape Breton reporters, Tom Ayers, Erin Pottie and Andrew Rankin, are very good journalists, among the best at the Herald. But now, with the acquisition of the Cape Breton Post, there’s no need for the Herald to have a Cape Breton bureau — it can use lower-paid Post reporters to fill Herald content. The striking journalists will be seen as redundant.
This will undoubtedly be the strategy moving forward: share “content” — quality reporting doesn’t matter — from an ever-decreasing pool of reporters supplemented by advertorial, consolidate operations, close papers, bust unions, and in the end sell off all tangible property. The only question is: Who gets to liquidate the assets, Integrated Private Debt Corp or Mark Lever and Sarah Dennis?
I should briefly interrupt this narrative to give a shout out to the reporters working at the Transcontinental papers. There are several — including Tina Comeau in Yarmouth, Jennifer Hoegg in the Annapolis Valley, and Dave Stewart and Teresa Wright in Charlottetown — who do outstanding work. They are now in a difficult position, and I fear for their careers as their papers are looted.
I wonder what Cape Bretoners think about this. Just seven months ago Mark Lever was dissing them for their union sympathies, and now he controls both their daily newspapers. Take it or leave it, I guess. What other choice do you have?
There aren’t many, but there are still a few dead tree newspapers left in Nova Scotia not owned by SaltWire. The Advocate has papers in Pictou, Port Hawkesbury, Elmsdale/Enfield, and most notably, Lighthouse Now in Lunenburg. There’s the wonderfully whimsical Inverness Oran, the Guysborough Journal, and the Masthead News in Tantallon. But these papers rarely creep past uncritical local boosterism into controversy, and much less into challenging the powers structures in the local communities.
They’re basically advertising vehicles wrapped with News Lite. That’s just the nature of print newspapers in small towns.
In Halifax there’s The Coast, an alt weekly that still produces solid journalism. While alt weeklies are closing at alarming rates across North America, The Coast holds on, a testament to the business prowess of its owners. But while I wish them luck, I fear for the model.
The future of quality journalism is online. But unfortunately, there’s not yet enough of an online media presence to present an alternative to the SaltWire monster. There’s allnovascotia, but that publication is geared towards insiders in the business and government world, and not so much to the general public. There’s of course the Halifax Examiner. I’m quite excited about Mary Campbell’s Cape Breton Spectator. Maureen GooGoo’s Kukukwes is covering indigenous communities and issues. Robert Devet’s Nova Scotia Advocate covers social justice issues often overlooked by the rest of the media.
There is a handful of smaller regional online sites like the Eastern Shore Cooperator and South Coast Today, but they haven’t taken the step of paying reporters, and so they are mostly commentary mixed with community announcements. There are also some regional Facebook groups that can become quite animated, but they can’t really be considered news.
But that’s about it for online news media in Nova Scotia (if I’m missing something, I’m sure you’ll let me know, and I don’t really know the scene in the rest of Atlantic Canada).
The creation of SaltWire and its buyout of the Transcontinental papers, however, presents an opportunity. Perhaps now people see the need for alternatives.
I don’t know exactly what the future alternative online media landscape looks like, but what I’d like to see is the creation of a plethora of local news sites, which then connect with each other to share content. That is, a Maritime media scene that is organized horizontally, not top-down.
The Halifax Examiner will turn three years old in June. I’m proud of it. We’ve added many writers and are covering important issues. On the business side, there’s no debt, all the taxes are paid, there’s a tiny bit of money in the bank — a little less money than I would like right now, as we just paid all the big annual expenses, but the business is solid. I don’t get paid enough, because all new revenue goes into hiring more people.
Which is to say, I don’t have the money or the desire to start new media operations. But I do have the experience and perhaps some resources that can help other people start their own news sites. So in coming weeks, I plan on travelling around the Maritimes and to Newfoundland to talk to people who are interested in starting news sites and perhaps collaborating (if you’re interested in talking, drop me a line). Maybe we can call it Squirrel on a Transformer Media.
One important note: We’ve gotten into this mess because the advertising business model of newspapers has collapsed. There’s no money in dead tree advertising, and as I’ve explained before, the minuscule potential in online advertising isn’t enough even now to pay for reporters, and like print advertising before it, even those small amounts of online advertising revenue will soon disappear:
Let me repeat that: even a very well read New York Times article, spread all over the world, will make just $100 through online advertising.
That’s a nonstarter for local news sites like the Halifax Examiner. Nothing we publish costs less than $100 to produce. Not even this free Morning File, if you consider my time.
Even without my time, considering writer pay, website costs, legal and professional fees, and other ancillary costs, a freelancer-written article will cost from a minimum of $200 to $1,000 or more.
I’ve written extensively about my disdain for advertising — it raises ethical issues for news media, and ubiquitous advertising has perverted our societal value system — but the very best reason for rejecting advertising is that advertising simply can’t pay the bills.
There’s no point creating online news with an advertising-based business model: that’s a recipe for failure. It takes cold cash, either from subscribers or from crowd-sourcing or from wealthy patrons. That’s just a reality.
By the way, this would be an excellent time to subscribe to the Halifax Examiner.
2. Examineradio, episode #107
This week we speak with David Wheeler, the former president of Cape Breton University and current NDP candidate in Halifax-Armdale for the upcoming provincial election. In a wide-ranging conversation, he talks about his tenure at CBU, his frustration with the Liberal government’s lack of commitment for education funding, and his stance on fracking and the effects of climate change.
No public meetings.
Halifax & West Community Council (Tuesday, 6pm, City Hall) — here’s the agenda.
Public Information Meeting – Case 20757 (Tuesday, 7pm, Millwood High School, Middle Sackville) — T.A. Scott Architecture has a proposal for a two-storey commercial building for a pharmacy/medical clinic at 235 Beaver Bank Road.
No public meetings.
Thesis Defence, Computer Science (Tuesday, 11am, Room 3107, Mona Campbell Building) —PhD candidate Raheleh Makki Niri will defend her thesis, “Interactive Text Analytics for User-Generated Content.”
Localization and Security in Wireless Networks (Tuesday, 11:30am, Room 430, Goldberg Computer Science Building) — Qiang Ye, from the University of PEI, will speak.
Board of Governors (Tuesday, 3pm, University Hall, MacDonald Building) — here’s the agenda.
Visualizing Social Recommendation (Tuesday, 3:30pm, Room 430, Goldberg Computer Science Building) — Julita Vassileva, from the University of Saskatchewan, will speak on “Visualization and User Control of Recommender Systems.”
In the harbour
Neither here nor there, but yesterday I watched The Life of Brian for the first time in maybe a decade, and was struck by this line early on, from an “explainer” after hearing Jesus say the meek will inherit the Earth:
What Jesus blatantly fails to appreciate is that it’s the meek who are the problem.
There’s no better commentary on modern politics.