The following originally appeared in The Conversation and was reprinted by National Newswatch , the National Post , the Toronto Star , the Winnipeg Free Press
The Tyee , Friends.ca , J-source.ca and the WAN blog . That's a record!
As 2018 dawns, Canada’s
news media are in danger of lurching into the abyss unless Ottawa
takes action soon.
Enforcing our country’s anti-trust laws to stop the corporate consolidation
and cutbacks in local news coverage would help to stanch the bleeding in the
short term, but Canada’s
Competition Bureau has shown little
in taking such action.
More long-term measures, similar to those taken in other countries, are also
needed to strengthen media policy in Canada
to help protect news from the depredations of Darwinian capitalism and
encourage the growth of digital journalism as old media fade away.
Whether our government has the foresight needed for this kind of bold action
should become clear in 2018. More likely is continued inaction given Ottawa’s
demonstrable blind spot when it comes to journalism.
When the country’s two largest chains swapped 41 newspapers in Ontario
a few weeks ago and announced that almost all would be closed, they basically
thumbed their noses at Canada’s
Why wouldn’t they?
Monopoly is much better for business than competition, and for years the
Competition Bureau has proved powerless — or unwilling — to stop Big Media from
growing even bigger.
In the November deal, Postmedia Network and the Torstar Corp. divided up large swaths of the southern Ontario
community newspaper market and dared the Competition Bureau to do something
Postmedia, 98 per cent owned by U.S.
hedge funds despite supposed limits on foreign ownership of Canadian
newspapers, pointed out the deal was “not subject to the merger notification provisions of the
Competition Act and no regulatory clearance is required to close the
That is technically correct given the dollar value of the deal (although no
money actually changed hands), but it doesn’t mean the Competition Bureau can’t
review matters after the fact, which it promisedto do when pressed by reporters.
It could even roll the deal back, but don’t hold your breath, because
Postmedia and Torstar have the precedent of regulatory inaction on their side.
The same thing, after all, has been going on for years mostly unnoticed in
B.C., well out of the national media glare. The two largest provincial chains,
Black Press (no relation to Conrad Black) and Glacier Media, have been buying,
selling and trading titles since 2010 and then often closing them to create
more lucrative local monopolies.
The Competition Bureau has not lifted a finger to stop them.
By my count,
these two chains exchanged 33 community newspapers over a four-year period and
immediately or eventually closed 24 of them, or a competitor in the same
The latest casualty came last month when Glacier Media closed
the Westender, a Vancouver weekly it acquired from Black Press as part of a
six-newspaper trade in 2013.
Glacier already owned the twice-weekly Vancouver Courier, which is Canada’s
largest community newspaper, and the weekly Business in Vancouver.
A 14-newspaper trade between the chains the following year has since seen 10 of
them closed or merged.
Of the 14 paid circulation dailies that have been lost in Canada
this decade — the latest being the Moose Jaw Times-Herald last month — nine were published in B.C. by Black Press
(six) or Glacier Media (three).
As a result of these dealings, Black Press now owns every newspaper on Vancouver
Island, which has a size and population similar to New
Brunswick, except for Glacier Media’s daily Victoria
Times Colonist. Glacier similarly now controls the community newspaper market in Vancouver’s
booming eastern suburbs. You might think that newspapers are dying and should be allowed to do these
kinds of competition-killing deals in order to survive.
My research suggests
I studied the annual reports of all publicly traded newspaper companies in Canada
and the United States
from 2006 to 2013 for my 2014 book and found that not one recorded an
annual loss on an operating basis during that time, despite an historic
downturn in advertising revenues. Greatly Exaggerated: The Myth of the Death of Newspapers
Postmedia had operating earnings
of $54.6 million on revenues of $754 million in its 2017 fiscal year ended Aug.
31, for a profit margin of 7.2 per cent.
Fully 60 per cent of its earnings, however, went to pay the interest on
Postmedia’s massive debt, most of which is held by its own hedge fund
overlords, which are skimming their take right off the top in a nifty piece of
Torstar’s community newspaper division, Metroland, reported earnings
of $21.2 million on revenue of $272 million in the first nine months of 2017
for a profit margin of 7.8 per cent.
Its flagship daily the Toronto Star, however, suffered a loss of $2 million
over the same period. Torstar’s deal with Postmedia may help to subsidize the
Star’s losses, but only by short-changing readers of its closed community
A succession of media inquiries over the past half century — the 1970 Senate
report on mass media, the 1981 Royal Commission on Newspapers report and the
2006 Senate report on news media — urged measures to slow Canada’s
ever-increasing levels of media ownership concentration. All were ignored,
however, and we are now left to deal with the consequences.
The Liberal government ordered hearings into media and local communities in
2016 after Postmedia merged the newsrooms of its duplicate dailies in four of Canada’s
six largest cities.
It had promised
to maintain separate newsrooms before it got Competition Bureau approval for
its 2014 takeover of the Sun Media chain.
The hearings, chaired by B.C. MP Hedy Fry, resulted in a report
in June calling for the Competition Bureau to be given more power to stop news
media mergers and takeovers, as well as other measures to boost local
So far its recommendations have also been ignored.
The Trudeau government’s continued fiddling while the country’s news media
disappear will soon constitute negligence of the highest order.
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