Torstar, Postmedia aim to reduce competition
A deal between Torstar Corp. and Postmedia Network Inc. to sell newspapers to each other and close them down is designed to reduce competition and win a bigger slice of a shrinking advertising and readership pie, critics said Monday.
Postmedia announced it will cut 244 jobs as it plans to shutter 21 of the 22 community newspaper properties it is acquiring from Torstar as well as the Metro Winnipeg and Metro Ottawa free dailies.
Torstar’s Metroland Media Group Ltd., meanwhile, said it will close three of the seven daily newspapers in Ontario it’s buying from Postmedia as well as all eight community newspapers it’s purchased, resulting in the loss of 46 jobs.
Torstar said one job will disappear as it buys and closes the free dailies 24Hours Toronto and 24Hours Vancouver.
“The scale of it, I think, is stunning and will be stunning for people who live in these communities who are going to lose access to, really, their local news,” said April Lindgren, an associate professor at the Ryerson School of Journalism.
More than 200 local news sources – news- papers, online publications and others – have closed for various reasons in Canada since 2008, she said, citing data she’s helped compile for the Local News Research Project.
“What they’re doing is shutting down newspapers in their immediate environs so the circulation can be taken over and the news coverage can be expanded by their existing papers in the area,” she said.
Lindgren said Postmedia, for instance, is shutting down Torstar newspapers in the coverage area of Postmedia’s Ottawa Citizen, and Torstar is buying and closing Postmedia products in southern Ontario that might compete with its Toronto Star.
The loss of local news titles will likely get worse, not better, as advertising dollars continue to migrate to online sites such as Facebook and Google, said Mitch Diamantopoulos, an associate journalism professor in the University of Regina.
“An attempt to cut costs by eliminating competition is bad news for Canadians,” he said.
Diamantopoulos said the closing of free daily newspapers isn’t surprising because some were created to block competitors, not make money. The closings suggest their publishers no longer think that’s a necessary or affordable strategy, he said.
“What makes this particularly difficult is that it means we will say goodbye to many dedicated newspaper people,” said Postmedia executive chairman and CEO Paul Godfrey in the statement on Monday. “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.”
The companies said the transaction is effectively a non-cash deal, as the publications are roughly equal in value.
More than 200 local news sources – newspapers, online publications and others – have closed for various reasons in Canada since 2008, (April Lindgren) said, citing data she’s helped compile for the Local News Research Project.