Be careful what you wish for.
For more than 50 years, critics rightly railed against the concentration of media ownership in New Brunswick.
The 1970 Special Senate Committee on Mass Media, for example, described the all-powerful Irving family’s control of all New Brunswick’s English daily newspapers as well as much of the province’s business and industrial activity — forestry, shipbuilding, oil refining, even the province’s bus system — as “about as flagrant an example of abusing the public interest as you’re likely to find in Canada.”
In the early 1970s, prosecutors there even convinced a judge the Irvings had established their media monopoly with the goal of “prevent[ing] or lessening competition… to the detriment or against the interest of the public.” He ordered Irving to pay $250,000 in fines and sell its two Moncton newspapers within a year.
But the Irvings appealed. They won. The appeal court concluded there was no evidence the Irving monopoly had actually harmed the public interest. Oh, and perhaps not incidentally, according to journalist Jacques Poitras in his 2014 book, Iriving vs. Irving, the other result was this:
… the Combines Investigation Act was eviscerated: with such a high burden of proof on detriment, it was unlikely the legislation could ever be used against media monopolies.
And so it continued.
In 1981, another federal Royal Commission on Newspapers recommended establishing a press rights panel with the power to break up newspaper chains like the Irvings that controlled “two or more papers with 75 per cent of the circulation in their markets” to ensure there would be “diverse voices… correcting and balancing one another, competing for influence.”
Its report was ignored.
That’s when Postmedia, already Canada’s largest newspaper publisher — which describes itself as “a Canadian newsmedia company representing more than 120 brands across multiple print, online, and mobile platforms” — announced it had acquired the Irving-owned Brunswick News for $7.5 million in cash and $8.6 million in Postmedia stock.
Postmedia added more “brands” —the Saint John Telegraph-Journal and Times Globe, the Moncton Times & Transcript, The Fredericton Daily Gleaner, Miramichi Leader, Woodstock Bugle-Observer, Bathurst Northern Light, Kings County Record, The Campbellton Tribune and The Victoria Star — to its nearly national monopoly media stable.
Be careful what you wish for indeed.
When I wrote for the late, lamented Halifax Daily News — which had begun as an independent, locally owned newspaper in 1974 and was then sold, in descending order, to Southam News, to Conrad Black, to Canwest, to Transcontinental and all the way to defunct by 2008 — there was a gallows-humour newsroom joke: each new, more awful owner made you wax nostalgic for the last, better bad owner.
Postmedia? It didn’t officially arrive on the scene until 2010, but it was even more awful than all the rest.
As business columnist David Olive wrote in 2016:
There is a cancer on Canadian journalism.
The malignancy is Postmedia Network Canada Corp., a foreign-controlled, debt-burdened contrivance flirting with insolvency that nonetheless is relied upon by about 21 million Canadian readers. Postmedia’s 200-plus media outlets, mostly newspapers, including some of the biggest dailies in the country, represent a far greater concentration of news media ownership than exists in any other major economy. And a degree of foreign ownership of the free press that would not be tolerated in the U.S., France, Japan or Germany.
You will note that that column was written in 2016. Six years later, 80 of those media outlets seem to have disappeared, sacrificed at the alter of stockholder profit.
As the Examiner’s Tim Bousquet pointed out Friday, Postmedia is now “owned primarily (66%) by Chatham Asset Management, a [US-based] hedge fund that regularly slashes news operations after purchasing them.”
Tim quotes from a New York Times investigation:
Chatham’s track record as an owner of a major newspaper chain is grim, according to 10 current and former Postmedia employees who spoke with The New York Times on the condition of anonymity because they feared retaliation.
Since Chatham took a majority stake in Postmedia, the company has cut its work force, shuttered papers across Canada, reduced salaries and benefits, and centralized editorial operations in a way that has made parts of its 106 newspapers into clones of one another.
The only winners from Chatham’s ownership of Postmedia appear to have been the managers who carried out the carpet-bombing of its media assets.
Since 2017, Postmedia has paid out over $6.2 million Canadian, or about $4.5 million, in bonuses to its five top executives, including Mr. MacLeod, the chief executive, and Paul Godfrey, the executive chairman of the board.
In that same period, the editorial ranks at The National Post, its flagship paper, have been reduced by about a third, according to three of the people. The number of journalists at its Vancouver papers — the Vancouver Sun and The Province — has been cut in half, according to Mr. Gibson. Altogether, the company has cut over 1,600 employees since 2016, or 38 percent of its staff, based on company filings.
Acknowledging the sale of its newspapers to Postmedia “represents an exit from the media business by J.D. Irving Lid.,” Jim Irving on Thursday did his best to dress up this pig of a sale.
We are pleased that Postmedia, one of Canada’s largest media organizations, will acquire all of our newspapers and media products through the purchase of Brunswick News… Postmedia is well positioned to make the transition to the digital world of providing New Brunswickers with a reliable source of local, regional and national news as well as access to much broader news coverage.
On their way, of course, to Canada’s media history dustbin for the financial benefit of coupon clippers.
The best hope for journalism’s future is the almost inevitable total collapse of Postmedia.
As the National Observer asked in a 2018 look at Postmedia’s finances:
The big question is how long can Postmedia continue until its American owners pull the plug on the whole enterprise?
As Tim also noted in his piece in Friday’s Examiner, all this matters to those of us in Nova Scotia too.
There can be no doubt that Postmedia is looking at the Saltwire network of papers. My guess is that the only thing that has prevented a purchase of Saltwire is the ongoing lawsuit between Saltwire and Transcontinental, with the two parties haggling over $10 million. I think it likely that a nanosecond after the lawsuit is resolved, Postmedia will buy Saltwire.
None of this is good. As terrible as it is to have the newspapers in New Brunswick run as a company town and the newspapers in the rest of Atlantic Canada run by the incompetent Mark Lever, it will be far worse to see all those papers run by the slash-and-burn Postmedia.
As with the journalists at the old Daily News, our Hobson’s choice seems to be between awful and more awful.
But perhaps the best hope is behind Door Number 3 — the ultimate collapse of both Postmedia and Saltwire and a fresh start for journalism in Canada.
Now that’s worth considering.
Unclear why this is illustrated with a photo of The Brunswick News, a newspaper from Brunswick, Georgia.
Isn’t Mr Lever’s spouse a Dennis? I assume the Dennis clan still control Saltwire.
Yes, but Sarah has stepped away from the operational side of the business. Employees tell me she’s never around.
With the future so bleak, how does Postmedia re-coup their $7.5 million? That sounds like real money. The $8.6 million in stock, though predicted here to be worthless soon, is hardly an “exit from the media business”.
Postmedia has done this time and again. They see an advertising revenue stream that is more “sticky” than the costs going out, which they can cut quickly by slashing staff and pay. It doesn’t matter that the advertising revenue stream also eventually is reduced to nothing as papers close; all that matters is that is reduced at a slower rate than costs are reduced. The difference is huge profits, which in this case will far exceed the $16.1 million.
In other words, the goal is not to continue producing papers for the long-run and getting reasonable returns for many years into the future; the goal is get large immediate returns by not investing in the future at all.
I could, theoretically, lay off all the Examiner employees today, and not publish a thing, and we’d still have revenue coming in for a few weeks or months as people slowly cancel their subscriptions, and I’d personally make a lot of money (for me) immediately, as I wouldn’t be paying anything out. Yes, that’s stupid short-term thinking because I actually care about producing journalism and besides, what would I do two months from now? For Postmedia, which doesn’t care about producing journalism, what they do when the revenue finally collapses is buy out and raid the next company.
Is it my imagination, or do you think that Saltwire was also thinking (hoping maybe) that this would be an excellent strategy to employ, and they had hoped that the prolonged strike was going to help them along. It seems to me, as a reader because my elderly roommate is a subscriber, that Saltwire has no interest in actually producing a legitimate newspaper.
Younger people want free news and they spend more money on a daily coffee than a daily newspaper.