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. As Lever himself wrote in a pontificating, bromide-filled screed in February 2016 — less than a month after he’d pushed the Herald’s 60 reporters and editors out of their jobs and onto the picket line — “the transformative change necessary for Nova Scotia to succeed will not be accomplished through status quo and business as usual.”
And blah blah blah.
Transformative this deal is. Status quo and business as usual it is not.
But that begs… well, many questions.
On Thursday, the day before the long weekend, Lever traveled to Charlottetown (far from picketing Herald journalists, or quibbling, querulous questions from business journalists) to announce his hastily created new company, the Saltwire Network, had acquired not only the Guardian but also 27 other Atlantic Canadian news organizations “from Corner Brook to Yarmouth, Cape Breton to Charlottetown, Halifax to St. John’s” to create “what is now the largest independently owned media network in the nation [and] home to the best journalists and storytellers in the region.”
And blah blah blah.
Lever bought the newspapers, their websites, a standalone website, four printing plants and a distribution network from Transcontinental Inc.
Transcon had been a successful Quebec-based printer that transformed itself into a major print publisher in the early 2000s by buying up the assets of debt-dogged, on-its-way-to-bankruptcy CanWest and, later, pieces of debt-dogged, on-its-way-to-disappearing Sun Media.
But the print-on-paper news business has been cratering. Transcon reported $1.3 million in losses from its media holdings in the last quarter alone, and took a $30 million write-down bath on its newspapers outside Quebec last year.
Perhaps not surprisingly, Transcon has been desperately slashing costs, merging community newspapers in out-of-its-way communities like southwestern Nova Scotia and the Annapolis Valley, and selling off its newspapers in bundles in western provinces.
The situation isn’t improving. Last year, some of Transcon’s Atlantic Canadian dailies, including the Truro Daily News and Newfoundland’s Western Star, reported year-over-year circulation collapses of close to 20 per cent.
Don’t wonder why Transcon is rushing for the transcontinental exits in order to focus on its still profitable, Quebec-based core printing and packaging businesses.
But do wonder why anyone would want to buy them.
Well, for starters, Transcon insists that, while its Atlantic Canadian media holdings aren’t part of the company’s core assets, they are currently profitable. Estimates suggest the papers generate revenues of $66 million a year. And they include a lot of tangible assets, including printing plants, that could be packaged and sold off piecemeal, if necessary.
Enter Mark Lever. Forget that he has based his entire public bargaining strategy with his striking reporters and editors on “pleading poverty… Even when we agreed to major concessions,” union president Martin O’Hanlon complained last week, “it wasn’t enough for them.”
Lever claimed to the union that the Herald couldn’t sweeten its offer because it was already saddled with an $18-million debt to Toronto-based Integrated Private Debt Corp., the amount the company still owed as the result of its ill-advised 2003 purchase of a $26-million “state of the art” Wifag printing press.
Now Lever is turning to the same private banker to finance his latest transformative, un-status-quo, minnow-swallowing-a-whale experiment known as the Saltwire Network.
Private bankers usually show up when conventional lenders decide a loan is too risky. (See PostMedia.) To reduce their risk, they not only charge high interest rates but also require the lender to put up physical assets — printing presses, buildings, transport fleets, etc. — as collateral. If things ultimately don’t work out, well, they can always sell off the assets. And they’re usually first to the divide-the-spoils table if things do go wrong.
Lever isn’t saying how much he borrowed to buy Transcon’s assets, or what assets — or whose future — he had to put on the block to make the deal.
In his official public statement, Lever tried to sound upbeat, declaring that all of Transcon’s 650 employees in the region will be offered jobs “in the same capacity with the same salary and same benefits that they have now… Certainly today, there are no plans for cuts.”
At the same time, he told the CBC: “we’re going to examine each market on its own merits and each operation to make sure we have the appropriate staff complement to make it successful going forward.”
History does not provide much hope. Modern Canadian newspaper history, in fact, is littered with ambitious media companies and contenders — Southam, Conrad Black, the Aspers, CanWest Global, Transcon — that borrowed heavily to create their own moment’s “biggest” and “best,” only to quickly cut back, lay off, close, squeeze and shutter when the bills came due.
Their journalists — and their readers — paid the price.
Can Mark Lever, who grandly, glibly, giddily claims his own “transformative” purchase of the Atlantic assets of Transcontinental “gives us renewed relevance in the world of Google and Facebook,” succeed where far smarter, far more experienced minds have failed?
See paragraph one above.
- “What would Graham say?” Atlantic Business Magazine.
- “Victims of the Herald” The Coast
Rural communities are already suffering from a lack of coverage as smaller papers have folded (Oxford Journal) or merged (Springhill Record / Amherst Daily News / etc.). As the family genealogist, access to these printed copies of historical papers has been invaluable, as has the volunteer transcription / digitalization of newspaper archives. The move to online-only publications that lack the depth and colloquial-ness of small-town papers and the paywalling of newspaper archives diminishes the preservation of local memory.
All of which is true.
But you can’t build a business model on that.
Great piece, Stephen.
The details of the loan will be in the Registry of Deeds. Any reporter with business savvy will know exactly where to look, or perhaps call a Kings College prof and ask why the Registry is such an excellent source for journalists. Too bad no reporter knew where to look last Thursday because then we would now have the details and terms of the Herald indebtedness to IAM.
And a smart columnist/reporter would find out the assessed values of the real estate.
Or maybe a reporter NEEDED A FUCKING DAY OFF ALREADY.
The reporters at CBC, CTV, Global and Frank had plenty of time to obtain the info, assuming they know where to look.
The Registry is available online 24/7 and CBC and the other 2 networks have enough money to have an annual subscription, I understand Frank has a subscription and I know it isn’t cheap.
Prior to going all digital the information I am referring to was available in metal filing cabinets and trawling through a thick file for one transaction was normal, although I never met a reporter or heard of any reporter accessing the documents.
PVSC is available online 24/7 for free and indicates sales in the past.
The property occupied by Cape Breton Post has not been sold in the period since July 1 2010.
Not sure what the Registry of Deeds has to do with the registration of a new company. I checked out Saltwire Network Inc. at the NS Registry of Joint Stocks. Just two directors: Mark Lever and Sarah Dennis at the same address — 1910 Bloomingdale Terr. Halifax and registered agent is Lawrnece J. Stordy, 1959 Upper Water St. Halifax.
Is there any way to find out who are the “shareholders” — i.e. who else backed this deal?
The Registry of Deeds shows ownership and mortgages, liens etc of all properties in the province.
Some documents also show the debt attached to properties in other provinces.
The debt incurred by Saltwire will be secured against all the acquired properties and the equipment within the properties. There will be a full description of equipment including serial numbers.
In the 80s I searched the debts attached to oil rigs and supply vessels. I also found the sale agreement between the Beatles and Michael Jackson, a massive document with original signatures of all parties to the agreement. We haven’t had a good business reporter in the province since Lyndon Watkins retired, although his pal David Bentley is no slouch.