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Early Thoughts on Postmedia-Nordstar Merger Talks
Nothing good will come out of this.
On June 27, Canada’s largest newspaper chain, Postmedia, announced that it’s in talks with the owner of the second-largest newspaper chain, Nordstar Capital, to merge into a single company, which will undoubtedly combine the worst elements of both corporate behemoths.
Even if we believe the progressive-ish Toronto Star — the centrepiece of Nordstar’s media holdings — will retain its editorial independence from the increasingly partisan Conservative Postmedia chain, there will undoubtedly be job losses, which will lead to a diminished product.
The people who lose their jobs are never the useless pundits whose inane commentary is rammed down our throats on a daily basis. It will be the people who actually do work, whether it’s holding the powerful to account or putting the physical newspaper together.
Under the proposed merger, Nordstar and Postmedia would retain a 50/50 split of voting shares, but NordStar would have a 44% economic interest, compared to 56% for Postmedia, which is mostly owned by a New Jersey-based hedge fund.
A new company, Toronto Star Inc., would be created under the terms of the arrangement, with a 65% ownership stake from Nordstar. Left unsaid in Postmedia’s news release is who will own the other 35%.
And I’m not sure I trust the company that just got into bed with Postmedia to retain meaningful independence from its editorial slant.
Andrew Macleod, Postmedia’s CEO, is slated to become the CEO of this as-yet-unnamed company. He said:
The news media industry in Canada and around the world is under existential threat, new models are urgently required. Scale, reach and efficiency are all prerequisites for future success and to compete with the global technology platforms. Canadians deserve and expect world-class journalism from trusted sources, and we are committed to preserving the editorial independence of all our newsrooms.
It’s more than a bit rich for the guy who leads a failing newspaper company that’s business model depends on government largesse to bemoan an “existential threat” to the media industry. You helped create it, pal.
Jordan Bitove, the owner of Nordstar and the Star’s publisher, would become chairman of the board. His comments were similarly tone teaf:
The viability of the newspaper industry in Canada is at an extreme risk, especially in the small towns and communities that are important to this nation. By pooling resources and working collaboratively, we can ensure that more Canadians have access to trusted journalism and quality reporting.
These would be the same small towns and communities whose newspapers have been gutted by Postmedia and Nordstar’s predecessor.
What happened last time the two largest newspaper chains pooled their resources?
In 2017, Postmedia and Torstar swapped 40 local community newspapers and proceeded to shut down all but six. It takes a stunning amount of nerve for these executives to suggest the problem is anything but themselves.
We’re seeing the constriction of debate in Canada in real time. I don’t see the claim that the Star will remain independent as any more credible than Postmedia’s vow not to merge the newsrooms of its broadsheet and tabloid papers after it purchased the Sun.
Nor do I expect the Competition Bureau to do anything to stop a merger if it’s finalized. They had no problem with Postmedia gobbling up the Sun papers, because their scope is fully attuned to media mergers’ impact on advertisers, not content or jobs.
The bureau did investigate the 2017 Postmedia-Torstar newspaper swap as a potential criminal conspiracy, but that investigation was quietly shelved.
Canada’s public discourse will be poorer as a result of this merger — even in the best case scenario of a nominally independent Star.
This disturbing development highlights the importance of supporting independent media outlets that aren’t accountable to vampiric shareholders.
Of course, this is somewhat self-referential, but there are many other independent media outlets who could use your support — The Tyee, Ricochet, The Breach, Canadaland, The Maple, PressProgress, The Rover, The Narwhal, and many others.
If you’re looking to support individual writers on this platform, check out my recommendations tab.