The Canadian newspaper industry has, so far, been unsuccessful in securing a Federal government bailout as readers flock to social media for news and entertainment and advertisers follow them. But the backroom deal between competing newspaper publishing companies Postmedia and TorStar must surely up the ante.
The agreement sees the two national organizations exchange ownership of 41 community and commuter newspapers and then shutter most of them, but it’s the fault of industry disruption according to the news release announcing the deal.
This is a bad deal, not only for the almost 300 news media professionals who are out of a job, but because reporting local news is important to our communities. Canadians love their community newspapers; it’s where they turn for local news and information about sports, entertainment and events. They even like to see the local advertisements.
But there’s the rub. With the consolidation of the community newspaper business under two large corporations, local reporting has already been in decline for years. Newsrooms are increasingly depleted with often only one paid journalist on staff, making original reporting almost impossible. Community papers are now largely filled with generic, syndicated content and semi-advertorial stories and columns. And, with advertising sales centralized and more regional than local, even the relevance of ads is hurt. Where’s the reader value?
Communities want, and need, local news, not just a freesheet stuffed with ads. And now, the only incentive left for news corporations to invest in the quality of local news reporting, competition for advertising dollars, is wiped out in a neat backroom deal. And it was done with no apology.
“What makes this particularly difficult is that it means we will say goodbye to many dedicated newspaper people. However, the continuing costs of producing dozens of small community newspapers in these regions in the face of significantly declining advertising revenues means that most of these operations no longer have viable business models,” said PostMedia CEO Paul Godfrey.
Someone more cynical than I might suspect this deal was designed to provoke action on a government bailout. Earlier this year newspaper publishers asked the Federal government to provide $350 million annually and to change the tax code to help them compete with Facebook and Google for advertising budgets.
With no government rescue yet in the offing, is the news industry doubling down by sacrificing community newspapers?
Update: Andrea, who is the editor and publisher of a local newspaper in the Ottawa area, has some great advice for people who want to support local news. Click here.