Sale of Atlantic Canada's biggest newspaper chain could reduce local content: expert

An expert who tracks Canada's mainstream media industry says Postmedia's pending purchase of Atlantic Canada's largest newspaper chain is almost certain to result in job cuts and a reduction in local content.

April Lindgren, a journalism professor with Toronto Metropolitan University, says Postmedia Network Inc. has also made a habit of closing unprofitable publications, having shut down 57 news outlets since 2008 — more than any other media company in Canada.

"Postmedia's strategy has been to reduce many newspapers to pale shadows of what they once were by cutting expenses and cutting the number of reporters on the ground," Lindgren said in an interview.

"I don't anticipate a change in strategy if this deal happens."

On Friday, Postmedia announced plans to buy "certain businesses" belonging to SaltWire Network Inc. and the Halifax Herald Ltd., the two insolvent media companies that in March were granted court-ordered protection from creditors who were owed more than $90 million.

Toronto-based Postmedia owns the National Post, Vancouver Sun, Calgary Herald and dozens of other publications.

The acquisition is subject to approval from the Nova Scotia Supreme Court and to "satisfactory outcomes" with unionized workers, the company said. It did not disclose any financial details.

A representative from Postmedia declined a request for an interview.

David Boyd, the court-appointed chief restructuring officer overseeing the operations of SaltWire and the Herald, issued a statement Tuesday saying the two Halifax-based companies have a long-standing tradition of delivering news and "diverse perspectives" to Atlantic Canadians through more than a dozen media titles.

"We are hopeful that all stakeholders can work together to complete the Postmedia transaction, which is intended to see Atlantic-based journalism publications continue," Boyd said in a statement.

Magda Konieczna, a journalism professor at Concordia University in Montreal, said Postmedia is known for limiting its investments in local news.

"It makes me worry … about just how much more local news space will continue to be eroded through this acquisition," Konieczna said in an interview. "Our local democracy needs more than the investment that Postmedia has been willing to put into local news."

More help needed

Konieczna said federal programs, such as the Local Journalism Initiative and Canadian journalism labour tax credit, have helped struggling media businesses. But more help is needed, she said.

"We need policy that will help us build a local news ecosystem that is responsive to the needs of local communities."

Lindgren, principal investigator for the Local News Research Project, said many media businesses resumed cutting costs and shutting down operations after the COVID-19 pandemic, when government subsidies dried up.

As well, she said advertising revenue has not recovered to pre-pandemic levels.

"All of the harsh realities that were there before the pandemic have reappeared," Lindgren said. "Advertising doesn't seem to be bouncing back. And those subsidies are gone. I don't foresee things getting any easier."

Still, Lindgren stressed that a Postmedia takeover is preferable to bankruptcy.

"If SaltWire is forced into bankruptcy, it's possible local buyers would step up to rescue some publications …  but that won't happen in all of the markets," she said. "Running a newspaper these days is not for the faint of heart."

Numbers are dwindling

As well, Lindgren said it would be wrong to single out Postmedia for its cost-cutting strategy. SaltWire, for example, has closed 24 news outlets since it was formed in 2017. As well, six other media companies — Transcontinental, Black Press, Glacier Media, Metro Media, Sun Media and Metroland — have each closed at least two dozen outlets since 2008.

As of June 1, a total of 521 news outlets had been closed since 2008, the vast majority of them community newspapers, according to Lindgren's research, which includes tracking the fate of newspapers, broadcast outlets and online news sources across Canada.

As for SaltWire and the Herald, cutting jobs won't be easy, given that layoffs are nothing new. At the flagship Chronicle Herald daily newspaper in Halifax, the number of reporters has dropped from about 100 in the mid-1990s to about two dozen today, a union official said.

Lindgren said the number of editorial staff at Postmedia's Ottawa Citizen has dropped from 190 unionized workers in 1990 to about two dozen today.

"That story is mirrored across the country," she said.