The problem with Postmedia

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Postmedia newspapers, including the National Post, Ottawa Citizen and the Ottawa Sun. Justin Tang/The Canadian Press

 

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By David Olive

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January 30th, 2016

There is a cancer on Canadian journalism.

The malignancy is Postmedia Network Canada Corp., a foreign-controlled, debt-burdened contrivance flirting with insolvency that nonetheless is relied upon by about 21 million Canadian readers. Postmedia’s 200-plus media outlets, mostly newspapers, including some of the biggest dailies in the country, represent a far greater concentration of news media ownership than exists in any other major economy. And a degree of foreign ownership of the free press that would not be tolerated in the U.S., France, Japan or Germany.

The good news is that the Postmedia abomination, which has never turned a profit, is in such wretched condition that it’s not long for this world. The bad news is that as long as the biggest newspaper publisher in the country clings to life, it is a blight on all the communities it underserves.

Postmedia is controlled by quick-buck hedge funds in the U.S. Leading this group is New York-based GoldenTree Asset Management, which alone controls 35 per cent of Postmedia. Indeed, it was GoldenTree that created Postmedia, just five years ago, by salvaging proud, venerable newspapers like the Vancouver Sun, The Calgary Herald, the Ottawa Citizen and the Montreal Gazette from the ruins of the Asper family’s bankrupt Canwest empire.

For generations, Canadian law has forbidden foreign ownership or control of Canadian cultural assets. But after permitting the sale to non-Canadians of practically the entire Canadian-owned steel and mining industries, then PM Stephen Harper’s government signed off on Postmedia’s creation as well. The Americans put a Canadian face on the deal by selecting Paul Godfrey, 77, as Postmedia’s CEO. Not by coincidence, Harper and Godfrey, a diehard Tory, are kindred spirits.

Though it was a thinly disguised foreign takeover, Ottawa didn’t object that Postmedia’s advent showed no sign of complying with Investment Canada’s one basic demand of foreign takeovers — that they be of “net benefit” to Canada.

Five years later, no one can credibly argue that Postmedia has been of net benefit to Canada. The most Godfrey can do, as he did recently, is insist that Canada is lucky that someone plucked the National Post, the Edmonton Journal and the Regina Leader-Post from the Canwest ruins, since no Canadian bidders stepped forward to do so.

That is a lie. There were at least two credible bids by Canadian interests, as Godfrey well knows. And the Canwest papers would not have perished in any case. They would have been auctioned, individually and as regional groups. That would have served readers better than the monstrosity of Postmedia. It’s Postmedia that is in financial extremis, not Postmedia’s papers.

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1 COMMENT

  1. Well put.

    Good on ya, David Olive, for noting Harper’s involvement in creating this ink stained Frankenstein’s monster that was doomed from the outset, given the prohibitive debt levels. Double shame on the court for approving such a rickety, foreign-dominated deal.

    The best line from this Toronto Star piece? Try the description of Postmedia as “a blight on all the communities it underserves”.

    Oh well, nobody will ever need to hold a tag day for Paul Godfrey.

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