Postmedia buys Sun Media newspapers to control huge chunk of Canadian media
Quebecor announced it will be selling all 175 English-language Sun Media newspapers to Postmedia for $316 million. If the deal goes through, Postmedia will control nearly every English-language daily newspaper in Canada that isn't based in Toronto.
“This investment by Postmedia is a strong endorsement of the future of the Canadian newspaper industry and made-in-Canada journalism,” said Postmedia Board chair Rod Phillips in a news release. “We are excited to be the custodians of many of Canada’s best known and trusted media brands, now and in the future.”
The sale will include The Toronto Sun, The Ottawa Sun, The Winnipeg Sun, The Calgary Sun and all the free 24 Hours dailies in Toronto and Vancouver.The Globe and Mail and Toronto Star, as well as Metro newspapers, are not owned by either company.
Sun Media's Sun News Network television channel, featuring popular right-wing pundits such as Ezra Levant, won't be sold to Postmedia as part of the deal. The troubled news channel, which recently faced a boycott from Liberal leader Justin Trudeau, has been losing $16-18 million annually.
Postmedia is approximately $488 million in debt, reported the Toronto Star, and will pay for the purchase with more debt and by selling more shares to current shareholders.
Although the purchase will sprout competition issues in cities like Edmonton, Calgary and Ottawa where Postmedia will now own both major papers, the company already owned both in Vancouver, said Globe and Mail’s report on business editor Paul Waldie. He says one of the few reasons regulators would hesitate to approve the deal would be due to Postmedia paying for it through debt and equity. The revenue from the Sun chain will probably not be enough to offset Postmedia’s higher debt especially since a lot of people rely on online news as well now, he added.
“Well I guess at least this puts newspaper ownership in the news,” said Waldie. “These are tough times for our industry and news that anyone wants to buy papers is welcomed!”
He said he hopes this deal will not impact independent reporting, but he noted there are other kinds of struggles that will come with the acquisition.
“I suspect the real challenge will be in back desk functions such as admin positions where you could see layoffs,” said Waldie. “But you may also see more things like movie reviews consolidated in one place for every paper in the chain, something Postmedia already does.”
Postmedia President and CEO Paul Godfrey sees purchasing Sun Media newspaper as a huge advantage for Canadian media.
“This acquisition brings together an impressive stable of brands that collectively create a stronger Canadian media platform that is better positioned to compete against foreign-based digital offerings and offers a greater range of choices to our readers,” said Godfrey.
“We intend to continue to operate the Sun Media major market dailies and their digital properties side by side with our existing properties in markets with multiple brands as we have in Vancouver with the Province and the Vancouver Sun for more than 30 years. Our advertisers will have the opportunity to reach audiences across the country with a made-in-Canada option for their marketing programs.”
Regulatory review for the sale is expected to take four to six months, the CBC reported.
Postmedia is currently in partnership with the Canadian Association of Petroleum Producers for energy reporting, according to a Prezi presentation. The presentation came to light in February, on the same day that Postmedia downsized its parliamentary bureau in Ottawa and laid off prominent environmental journalist Mike De Souza.
The proposal suggested "topics to be directed by CAPP and written by Postmedia," with 12 single page "Joint Ventures" in the National Post, as well as 12 major newspapers including the Vancouver Sun, Calgary Herald and The Times Colonist. It is unknown whether the Postmedia-CAPP partnership will affect energy reporting by Sun Media newspapers after the takeover.
With files from Sindhu Dharmarajah