When Saltwire’s financial woes came to the fore in March, my first thought was, what will happen to The Telegram and its journalists and staff? And what could the potential closure of Newfoundland and Labrador’s oldest news publication mean for the province?
Would someone — anyone — step in to save the last vestige of the newspaper industry here? With four qualified bidders, any number of possibilities could have materialised, including the rumoured possibility of former premier Danny Williams buying the paper despite his troubled past with The Telegram.
In what could be considered a worst-case scenario, none other than embattled right-wing media conglomerate Postmedia is in the process of buying Saltwire’s newspapers in Nova Scotia, Newfoundland and Labrador and Prince Edward Island, including its free weeklies like the West Coast Wire and The Central Wire.
Postmedia currently owns around 116 news outlets from British Columbia to New Brunswick, including the Ottawa Citizen, Montreal Gazette, and The National Post. If the Saltwire deal goes through, which could be a matter of days, Postmedia would have a virtual monopoly on print media from coast to coast.
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There isn’t a meme in the world that could convey how bad this would be for Newfoundland and Labrador. That’s not just my opinion — Postmedia’s track record speaks for itself.
Postmedia is owned by American hedge funds and in financial trouble
The company was born out of the ashes of the Canwest media conglomerate’s bankruptcy in 2009, when National Post CEO Paul Godfrey assembled an ownership group—and the financial backing of an American private equity firm—to buy Canwest’s assets, including 46 newspapers. The $1.1-billion deal was sealed in 2010 and the company almost immediately launched a voluntary buyout program to workers at the Victoria Times Colonist, Ottawa Citizen, and Montreal Gazette, among others. Jobs were also cut at the Edmonton Journal and Calgary Herald, both non-unionized papers.
In 2012 dozens more jobs were cut at the Citizen and Gazette, and in 2013 Postmedia cut publishers of the Saskatoon StarPhoenix, Regina Leader-Post, Edmonton Journal and Calgary Herald, further centralising its operations. It also sold off the Vancouver Sun’s printing facility in a move that foreshadowed future asset stripping.
Recent media reports say Postmedia has shut down 57 news outlets to date.
In 2015 Postmedia bought rival company Sun Media, including the company’s flagship dailies in Calgary, Edmonton, Winnipeg, Toronto and Ottawa, along with other dailies and weeklies from Alberta to Quebec — 175 publications in total. Despite several Sun publications operating as competitors to Postmedia papers, Canada’s Competition Bureau approved the $316-million sale.
But here’s the kicker: Postmedia itself is in financial trouble — that is, unless it can profit from its pending acquisition of Saltwire.
“Here’s how bad things have gotten in Canada’s troubled newspaper industry: one bankrupt chain is now being taken over by a chain that is effectively bankrupt,” Marc Edge, author of the book The Postmedia Effect, remarked on the takeover of Saltwire.
“The irony is that Postmedia is just as insolvent as Saltwire is when its debt is taken into account, but its main debt holder, New Jersey hedge fund Chatham Asset Management, is also its majority owner with 63 percent of its shares,” Edge explains. “Postmedia’s most recent quarterly report showed that its revenues for the first nine months of its 2023-24 fiscal year were down 12.8 percent from last year and its operating profit fell as a result from $8.7 million to $2.6 million. Its income is now dwarfed by its debt payments of $27.7 million for the past nine months. While Chatham would thus be in a similar position [as Saltwire creditor Fiera Private Debt], to force Postmedia into bankruptcy, it has recently been allowing the company to stop making payments on its debt and instead add them to its total, which now stands at more than $300 million. Chatham has actually doubled down on its investment in Postmedia, lending it $20 million more last year to pay off its Canadian lender, whose debt would have taken first priority in the case of bankruptcy.”
Edge points out that Postmedia is now “somehow 98 percent owned by US hedge funds despite [Canada’s] supposed 25 percent limit on foreign ownership of this culturally-sensitive news medium.”
During the COVID-19 pandemic, the company published articles criticising emergency government subsidies while simultaneously applying for wage subsidies and in its 2020 annual report describing “government support” as “key pillar” of its fiscal strategy.
Edge estimates that between government tax credits and payments from Google (via the deal Google struck with Canadian media outlets following implementation of Canada’s Online News Act), Postmedia, following a takeover of Saltwire, could generate enough “to not only put it back in the black, but could also even allow it to resume making debt payments to its vulture fund owners.”
There’s no reason to believe Postmedia would treat the Atlantic Canada papers any differently than its other publications: buyouts, job cuts, and depleted or shuttered newsrooms. In fact, a Nova Scotia court filing by a court monitor appointed to oversee the creditor protection process reportedly states that layoffs at Saltwire publications could come as early as this week.
“Postmedia is not really a newspaper chain; it’s an interest-extraction scheme that has happened to include some journalists’ being hired — and, more often, fired — along the way,” journalist Davide Mastracci wrote in 2019.
“Cost-cutting measures such as merging newsrooms, slashing staff and centralizing content, which have all taken place since Postmedia was created, keep the interest payments flowing. Meanwhile, the papers themselves, which these diminished newsrooms continue to put out, are used to promote corporate interests.”
Postmedia’s charge to the right
Chatham Asset Management has ties to Donald Trump and the U.S. Republican Party and has been accused of pushing its news publications to the right.
In Canada, the shift hasn’t been subtle.
In 2015, editors at the National Post and Ottawa Citizen left their jobs after Postmedia executives told newspapers they must endorse the Stephen Harper Conservatives in the federal election.
Following the Trudeau Liberals’ win that year, the Citizen’s editor-in-chief was told by Postmedia’s senior vice president of content that the newspaper was too “anti-conservative,” sources told Canadaland.
Also that year, Postmedia directed the Edmonton Journal to endorse the Alberta Progressive Conservatives in that province’s election.
But the biggest rightward push came in October 2018, when several editors at the National Post were reportedly told at the company’s headquarters that Canada’s flagship conservative newspaper wasn’t conservative enough.
It was “the start of something unprecedented,” Sean Craig reported for Canadaland. After interviewing more than 30 current employees (in 2019) and more than a dozen former employees, Craig reported that “Postmedia has given a directive for all of its papers to shift to the political right, in an unprecedented, centralized fashion.”
Earlier that year, new Postmedia CEO Andrew MacLeod appointed Kevin Libin, who Craig describes as being “considered by some at the chain to be among its most conservative editorial voices,” to manage political reporting and some commentary across Postmedia newspapers. The “chain-wide consolidation of political coverage required for this gambit is unprecedented,” Craig wrote.
Following the 2019 Alberta election, won by the Jason Kenney-led United Conservative Party (which Postmedia papers were told to endorse), Edmonton Journal Editor-in-Chief Mark Iype published an editorial criticising Kenney’s plans to end Alberta’s provincial carbon tax. Iype was later removed from his role and reassigned to another position. Postmedia sources told Canadaland the move was due to Iype’s political orientation.
In 2018 the company quashed a union drive at the National Post. In 2020, Postmedia-owned Vancouver Sun sold news coverage to the University of British Columbia without disclosing that the articles were paid for. In 2021, the company was accused of promoting Islamophobic views in Ontario. It has further gutted newsrooms, like the Montreal Gazette, while selling off assets like the Calgary Herald’s building and the Windsor Star’s printing facility. More recently, the chain has been accused of publishing Israeli propaganda amid Israel’s war on Gaza.
For his part, Libin, Postmedia’s executive editor of politics, is known for his skepticism of climate science — a view that even most conservative politicians in Newfoundland and Labrador likely don’t share.
What a Postmedia-owned Telegram would mean for N.L.
Like other places, Newfoundland and Labrador is deeply wounded from the shuttering of community newspapers in recent years.
We need creative solutions to ensure a future in which Newfoundlanders and Labradorians are well-informed about the issues impacting our lives. A Telegram takeover by a U.S. hedge fund-owned right wing media conglomerate like Postmedia is clearly not the answer, and I’m deeply troubled by the turmoil coming down the pipe for Telegram journalists.
If our province’s 145-year-old daily newspaper falls into the hands of Postmedia, its newsroom will likely become a hostile environment for journalists who want to report fairly and accurately on issues like the oil industry’s role in climate change, income and wealth inequality, queer or transgender people’s rights, immigration, labour, Indigenous rights, and any issues related to social justice.
We’ve all witnessed the collapse of Canadian newsmedia, and the subsequent rise of misinformation and disinformation, often via social media platforms.
Postmedia’s takeover of the only remaining daily newspaper in our province would be calamitous for the free flow of information here.
Politicians and others who might benefit from the death of journalism here have been silent and have failed to protect — or even object to — one of the pillars of democracy.
Now it’s up to the rest of us to ensure there’s room in our society for journalists who will hold powerful institutions — soon to include Postmedia — accountable to the people they are supposed to serve.
