The consolidation continues in the Canadian newspaper business as PostMedia is set to acquire Saltwire.
Innovation and adaptation have long been the solution to a lot of the woes facing many newspapers. The problem is that many of them concluded that this whole internet thing was just a fad that would burn out on its own. As a result, all that lost audience would then go back to reading newspapers and the advertising dollars that were lost would just magically get restored.
This attitude has ultimately helped to lead to a number of bankruptcies. With the failure of the Online News Act, those bankruptcies only increased.
To be fair, some of these newspapers did at least make a go at this online gig by creating a website, but for many, the website that would theoretically save them was largely treated as a tiny little pet project to tick a box more than treated as a life preserver. Some did put up a Facebook presence and some were able to make it by with some of the advertising revenue that came from it, but those efforts were ultimately undermined by the Online News Act which forced Meta to block news links altogether.
This, of course, is just one of many major problems plaguing the newspaper business. Another major problem is mindless consolidation where newspapers buy up each other and, ultimately, get bought out by things like private equity firms who demand endlessly increasing profits. Even newspapers that are able to turn a profit these days basically get saddled with debt by large corporate firms who don’t really care one way or another whether the newspaper sinks or swims.
While it is easy to think that the local newspaper is just run by those in town, more often then not, it is owned by a much larger newspaper chain such as the financially troubled Black Press Media or PostMedia. The idea of an independently run newspaper is an exceedingly rare thing and is often someone attempting to put together a small magazine to see what it’s like to run such a business.
Much like many other industries in Canada, there is a major problem with mindless consolidation. Competition laws are basically there in name only and just let acquisitions happen because blocking such acquisitions might make those business people very upset – and that’s the last thing you want to do… apparently.
If you want a great example of how much competition law enforcement has failed, you don’t have to look much further than the Rogers Shaw merger. At the time of the merger, there were promises of more jobs, better quality of service, and lower rates. You know, promises only a complete moron would believe (all promises that have since been, unsurprisingly, broken). Because the Liberal party has tight connections with the world of corporate Canada, they were never in a million years going to say no. So, they rubberstamped the deal after pretending to be thinking about it.
The rubberstamping of the Rogers Shaw merger signalled, yet again, that Canada’s competition laws only exist in the law books, but never really enforced. Fostering innovation and competition is little more than a suggestion in this country, not really something that happens in practice.
Today, I learned of another attempted buyout. The financially troubled news conglomerate, PostMedia, is apparently gearing up to buy the financially insolvent Saltwire Network so all of that can be consolidated into one big mess. From the Toronto Star:
Atlantic Canada will get to keep some of its local news outlets, for now.
Postmedia Network Inc. has entered into an agreement to “acquire certain businesses and assets” of SaltWire Network Inc. — Atlantic Canada’s largest newspaper chain — the company announced on Friday.
The Halifax-based network of companies owns daily newspapers in Nova Scotia, Prince Edward Island and Newfoundland and Labrador, including Halifax’s Chronicle Herald, the Cape Breton Post in Sydney, N.S., the Telegram in St. John’s and the Guardian in Charlottetown — all on top of several digital publications. Postmedia is the publisher of the National Post, Toronto Sun, Financial Post and other local papers including the Calgary Herald and Vancouver Sun.
Postmedia, in a press release, said the acquisition is “subject to various conditions, including satisfactory outcomes with unions and other stakeholders, the completion of definitive transaction documentation, and court approval.” It added that “key conditions be satisfied by Aug. 5, with an outside close date of August 26.”
Now, why is a financially troubled conglomerate spending all this money on a financially insolvent chain of newspapers? Who knows? Is there a plan to improve those newspapers? That’s anyone’s guess.
In all likelihood, all of this will just lead to further shutdowns and layoffs. That would certainly track with a vast majority of other major acquisitions. After all, that’s exactly what happened with the Rogers Shaw merger. It led to funding getting cut, and a wave of pink slips. It’s honestly hard to see how this acquisition, post approval, will lead to anything different.
All of this is fuelling anxiety of the further rise of zombie newspapers. While definitions vary, some of those definitions include the idea of a political party or corporate organization buying up a dead newspaper, bringing it back to life, and pushing political messaging to serve their own interests while using the credibility of the former paper as cover to pass off that messaging as legitimate unbiased information. Off and on, this phenomenon has been noted from around the world:
People in the Peak District awoke one August morning this summer to find copies of the High Peak Reporter waiting on the doormat. The paper delivered local news, all of it refreshingly positive: the front page led with the announcement of an upgraded rail line, while other headlines reported “More police on the beat” and “Extra skills investment”. But its presence would have come as a surprise to many readers. No one had subscribed to the Reporter since it closed, after more than a century in business, in 1998.
It was not a real newspaper but a zombie – a piece of promotional material created for the local Conservative MP, Robert Largan, by a company in nearby Manchester. As such, it was just the latest example of how the local newspaper industry, which has been all but destroyed, is now being replaced. Freed from the oversight of local reporters and editors, businesses and politicians have begun to create their own information networks – they look like local news, but report only the things their owners want the public to see.
Fake newspapers have definitely been on the rise in recent years and one of the most notable examples of this is the Epoch Times, a publication designed to, among other things, pass off right wing conspiracy theories as investigative journalism. While original newspapers haven’t exactly been known for being non-partisan in the last few decades (often being right wing in many communities), zombie newspapers double down and don’t have any journalistic standards at all. Instead, it pushes whatever messaging the owner wants to push.
At any rate, there’s not a lot here to be optimistic about. Some might look at this as something that saves these papers, but many of these newspapers are seemingly boarding another sinking ship. It’s hard to tell how many papers would really be “saved” in the short or medium term. The collapse of journalism is continuing.
