Postmedia, Torstar deal will see 36 papers close

291 jobs will be lost as companies swap publications in effort to counter declining print revenues

TORONTO — Canada’s two largest newspaper chains will close three-dozen community and free commuter newspapers after striking a deal to swap newspapers struggling with declining print advertising revenue.

Postmedia Network Inc. and Torstar Corp. announced Monday they traded 41 publications and plan to close 36 papers in places where they compete. The shuttering of Vancouver’s 24 Hours commuter paper, 34 papers in Ontario and one publication in Winnipeg will eliminate 291 jobs and save each company between $5 million to $7 million annually.

Postmedia owns The Province and the Vancouver Sun.

The firms say they remain committed to local news and are only closing papers in regions served by multiple publications.

Postmedia executive chairman and CEO Paul Godfrey called it a sad day for the newspaper industry, which has faced massive disruption as readers go online for news and companies spend more advertising dollars on global platforms such as Facebook and Google.

“This is a crisis situation,” Godfrey said in an interview. “Most deals you make, you want them to be win-win. Unfortunately this is a lose-lose. You lose brands and you lose people.”

Digital ad revenue is growing, but has yet to make up for losses in print revenue, which Godfrey said dropped 24 per cent across Ontario in the second quarter of 2017.

High costs and declining ad revenue meant it was no longer viable for some markets to have competing papers, including free dailies distributed at transit stations in Toronto and Vancouver, Godfrey said.

Postmedia acquired 22 community papers and two free dailies from Torstar in exchange for 15 community papers and two free dailies.

Postmedia, which continues to employ 3,500 people across Canada, said the transaction consolidates resources geographically and helps preserve jobs in areas that can no longer sustain multiple products.

The deal, which gives each company a more distinct operating region, resembles deals between Black Press Ltd. and Glacier Media Inc. The pair traded more than a dozen papers in B.C. communities over the past five years, concentrating ownership of multiple publications in a single community. Many of the papers were subsequently closed.

Postmedia will close 23 of its 24 new properties by mid-January.

The Competition Bureau said it will review the deal.