Postmedia’s merger talks with Toronto Star owner a ‘Hail Mary pass’: expert

TORONTO –

A possible merger between Canada’s two largest newspaper chains may mark the following step within the decimation of Canadian news, which has seen dwindling jobs and widening protection gaps, say those that research the business.

Postmedia Network Canada Corp. mentioned Tuesday that it is in talks to merge with Nordstar Capital LP, the proprietor of Metroland Media Group and the Toronto Star.

The two publishers mentioned the proposed deal is a bid to create better scale to allow them to reply to the “existential threat” going through the media business.

Postmedia, which owns publications together with the National Post, Vancouver Sun and Calgary Herald, mentioned the proposal would see the Toronto Star preserve editorial independence by means of the incorporation of a brand new firm that may handle its editorial operations. It mentioned phrases of the proposed deal haven’t been finalized.

But even with such assurances, the talks increase alarm bells for individuals who say they’ve heard comparable guarantees earlier than.

“We saw the merger between the old Postmedia Southam newspapers and the Sun chain and it certainly didn’t add anything to local coverage. It just resulted in more lost jobs, more amalgamation and less news and that’s kind of how I see this going again,” mentioned Brad Clark, a journalism professor at Calgary’s Mount Royal University.

“I’m deeply concerned that we’ll see newsrooms combined, we’ll see fewer people in legislative assemblies and House of Commons covering the important news of the day. I think this is quite a blow.”

In 2015, Postmedia bought 175 Sun Media newspapers from Quebecor for $316 million, saying it deliberate to maintain separate newsrooms in markets the place it might function a number of dailies. The following 12 months, it minimize 90 jobs because it merged newsrooms in 4 main cities, the place once-rival newspapers started publishing typically equivalent content material as each other.

Job losses on the firm have continued, with Postmedia shedding 11 per cent of its editorial workers earlier this 12 months, lower than per week after workers had been instructed it was grappling with “economic contraction.”

“I don’t think anyone is optimistic enough to see that there’s a great future here,” famous Toronto Sun sports activities columnist Steve Simmons, who has spent 36 years with the corporate.

“It’s hopefully, ‘What is it and where are we heading and how are we getting there?”‘

Simmons mentioned it is overwhelming to continuously be grappling with questions concerning the firm’s future.

“It’s ‘Are we publishing tomorrow? Are we being sold? Who owns us? Are people losing their jobs?”‘

Dwayne Winseck, a professor at Carleton University’s School of Journalism and Communication, mentioned Canada’s media panorama has been sufferer to a mix of dangerous decision-making, the rise of massive tech and financial downturns.

“It’s a Hail Mary pass,” he mentioned of the discussions of a possible merger.

“To me, what that does is it first legitimates consolidation and then second, it diverts attention from the role that these actors themselves have played in creating the conditions that have ended up in such a poor state.”

If there’s one potential winner from the proposed deal, it is the Toronto Star, mentioned Carleton journalism professor emeritus Christopher Waddell, who additionally serves because the writer of Canadian journalism news publication J-Source.

The construction specified by Tuesday’s launch seems to separate the Toronto Star from the merging entity. That may very well be a lift to the paper because it seeks to achieve subscribers within the digital age, mentioned Waddell.

“The Star has a chance to survive. But if you take everything else that’s not the Star, it appears to be trying to preserve the positions of all these other entities ΓǪ without a clear indication of how they have the financial investment to improve their editorial content,” mentioned Waddell.

“What it may be doing is delaying the inevitable,” he mentioned, including, “it may be blocking entrepreneurs or with new ideas and new approaches to coming into the marketplaces.”

Prime Minister Justin Trudeau weighed in Wednesday, calling the negotiations a “significant step” and noting the Competition Bureau would seemingly study any proposed deal.

“I won’t comment on it right now but I will say we need to continue to make sure we are supporting the ability of Canadians to get local news, to get quality journalism, to keep them informed about how our country is doing,” Trudeau instructed reporters.

Keldon Bester, co-founder of the Canadian Anti-Monopoly Project, mentioned it is unlikely the Competition Bureau will cease the businesses from combining, simply because it allowed for the earlier merger of Postmedia and Sun Media to undergo.

Bester famous that after Postmedia and Torstar Corp. agreed in 2017 to swap 41 group and each day newspapers, 36 of which had been subsequently closed, the bureau decided no intervention was mandatory.

“To refer a case for prosecution under the criminal conspiracy provisions of the Competition Act, the Bureau must find clear evidence demonstrating that competitors reached an agreement to fix prices, allocate markets, or lessen or eliminate the supply of a product or service,” the watchdog mentioned in 2021 after ending its probe into the deal.

Bester mentioned Canadian regulation focuses on competitors for the promoting market moderately than editorial variety, however the 2017 swap primarily created “Postmedia towns and Torstar towns” the place advertisers would not have to compete with each other.

“We really can’t count on the bureau, especially when you look at that swap. It really created territories that will make it difficult for the bureau to argue a reduction in competition,” he mentioned.

“The bureau is absolutely on the backfoot here and I think the federal government, through either informal or formal action, needs to step in and make it clear to these parties that this is a non-starter.”

–With information from Rosa Saba and Gregory Strong in Toronto and Nojoud Al Mallees in Ottawa

This report by The Canadian Press was first revealed June 28, 2023.

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Torstar holds an funding in The Canadian Press as a part of a joint settlement with subsidiaries of The Globe and Mail and Montreal’s La Presse.