Postmedia to cut more jobs as net loss spikes

Source: theglobeandmail.com

In the past year, Postmedia Network Canada Corp. has shed the equivalent of 800 full-time jobs. On Thursday, the company said the job losses will deepen, announcing a target of a further 20-per-cent saving on salary costs.

The latest round of planned staff reductions – through voluntary buyouts, followed by involuntary layoffs if necessary – comes amid a worsening slump. In earnings unveiled on Thursday, the company said its net loss spiked by 84 per cent to $99.4-million in the fourth quarter as print advertising sales fell by more than 20 per cent.

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Memo-Postmedia Strikes 316m Deal to Buy Sun Media English Papers

Source: jpress.journalism.ryerson.ca

 

Associate Editor Tamara Baluja has obtained memos sent by Postmedia Network and Sun Media to their respective employees.

CEO Paul Godfrey notes that Postmedia Network has agreed to buy 175 English language publications from Sun Media. 

Today we announced perhaps the biggest news in the Canadian news media industry since the day Postmedia was formed. Our company has entered into an agreement with Quebecor Inc. to purchase all of Sun Media’s English language publications and associated digital properties. That’s 175 daily newspapers, community weeklies, trade publications, magazines and related digital properties from 5 provinces across Canada.

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Postmedia and union talks break down over contracting out of printing

Source: thetyee.ca

Talks between the company that publishes the Vancouver Sun and Province and the union that represents their workers broke down after two days of negotiations earlier this month over contracting out of the printing of both newspapers.

That increases the likelihood of a labour dispute in a year’s time over Pacific Newspaper Group’s plan to have outside companies handle the printing.

“They can lock us out or we can go on strike,” said Unifor Local 2000 vice-president Gary Engler. “Of course, we have the right to picket and all of those sorts of things.”

Postmedia Network recently announced it will sell the Surrey property where its printing plant is located and either contract out the printing or build a new plant that would require fewer workers. The company imposed a Nov. 18 deadline for an agreement to be reached on staffing levels for a new plant, but a Unifor release called the company’s demands “too extreme” for the union to accept.

“Among other conditions, the company insists on the right to choose from among our current members as to who would be able to work at a new plant,” it stated. “It was estimated that only about one-quarter of our current Kennedy Heights members would be asked to work at the new facility.”

The union also claims the company offered far less severance pay for displaced press operators than it has offered its editorial and business staff under a Voluntary Staff Reduction Plan.

The collective agreement between Unifor and Postmedia’s subsidiary Pacific Newspaper Group expires on Nov. 30, 2014. Engler said the company suggested more talks in January, but the Unifor release called agreement “highly unlikely.” PNG announced it has already contracted with Transcontinental Printing to handle printing in the event that agreement cannot be reached with Unifor on staffing levels for a new plant.

Engler said the recent talks revealed that only the Sun would be printed at Transcontinental’s plant on Annacis Island, however, with another printing company handling the Province. The current collective agreement prevents contracting out, and its provisions would be extended under the B.C. Labour Code in the event of a strike or lockout.

“We know where the printing is going,” noted Engler. “Transcontinental is unionized as well. Where the Province is going is a non-union plant.”

Meanwhile, another large U.S. hedge fund has acquired a major ownership interest in Postmedia. Silver Point Capital recently bought a 19 per cent stake in the company, which makes it the second largest owner of Postmedia behind New York-based GoldenTree Asset Management, which owns about 35 per cent.

Canada’s largest chain of dailies, which was founded in the 19 century by the Southam family, was bought out of the bankruptcy of Canwest Global Communications in 2010 by a group of its creditors, with financial backing from several U.S. hedge funds.

Vancouver journalist Marc Edge is a frequent contributor to The Tyee.

– See more at: http://thetyee.ca/Blogs/TheHook/2013/11/26/Postmedia-Union-Talks/#sthash.4D7Zafpj.dpuf

US Hedge Funds Squeezing Profitable Postmedia: Union

Source: thetyee.ca

 

Faceless foreign ownership is behind newspaper publisher Postmedia’s push to cut costs at Vancouver’s duopoly dailies, according to the head of the union that represents workers at the Sun and Province. “One of the big problems with Postmedia is it’s controlled by U.S. hedge funds,” said Mike Bocking, president of Unifor Local 2000.

The latest move to trim expenses came with last week’s announcement that Postmedia will sell its Surrey printing plant and either contract out printing of the dailies or build a more efficient plant that would cost 70-75 per cent less to operate.

“The essential promise of hedge funds to their investors is better-than-market returns,” noted Bocking. “Many hedge funds are not really creators of value, but extractors of value.”

Hedge funds that specialize in buying up the debt of distressed companies at pennies on the dollar jumped into the newspaper business in a big way during the recent recession. A pair of American hedge funds are now major owners of the former Southam newspaper chain, which was sold at auction to a group of its creditors in 2010 following the bankruptcy of Canwest Global Communications.

The new company’s share structure had to be altered to stay within Canada’s foreign ownership limits by giving the U.S. hedge funds shares less voting control. Golden Tree Asset Management and Alden Global Capital both have directors on thePostmedia board, but Postmedia’s new head man in Vancouver insists their influence is not what is behind the company’s downsizing.

“I don’t take instructions from Golden Tree or Alden,” said Gordon Fisher, president of the Postmedia subsidiary Pacific Newspaper Group. “They are investors. They are in for the long haul.”

Postmedia has posted robust profits of 17 per cent or more since 2011.

But Fisher says the problem at PNG is a cost structure that is out of line with other Postmedia newspapers, along with declining revenues from print advertising. “We have to cut our costs where we can,” he said. “I think our employees understand that reality.”

Alarming memo signaled cuts

Fisher was sent to Vancouver in January from Postmedia headquarters near Toronto, where he was president of the flagship National Post, with an apparent mandate to cut costs. He should be familiar with the labour situation at the former Pacific Press dailies, because he spent some time at the Sun in the 1970s and ’80s, rising to managing editor.

Fisher shocked PNG workers shortly after his return to Vancouver with what The Huffington Postdescribed as “one of the bluntest newsroom memos ever seen.” Fisher told PNG staff that “if we don’t find ways to dramatically reduce costs, the answer is clear. The business is unsustainable.”

The alarming memo was quickly leaked and posted online. “We are all fighting not only for the future of the Vancouver Sun and The Province but for the lives and well-being of our families,” it concluded.

The first result of the cost-cutting program was the departure of about 110 employees through buyouts and early retirement. In June, PNG put two entire floors of the Granville Square office tower it leases up for sublet at below market rates.

Then in July, the company announced stiff hikes in subscription rates. Fisher cited “significant declines in advertising revenues” in a full-page letter to readers explaining the increase, yet promised them “we will be investing in and improving all our news platforms.”

That appeared at odds with the wholesale departures, including high-profile columnists likeDavid Baines and Jonathan Manthorpe, but Fisher said that only about 15 of the severed staff came from Sun and Province newsrooms.

“We didn’t lose a lot of producing, creative, hard-nosed reporters. We had a couple of high-profile columnists who decided to retire. We’ve always had really good people come and then decide it was time to retire. There was nothing we could have done about that anyways.”

No plans to close Sun or Province: Fisher

A paywall erected around Sun and Province online content that was announced at the same time has been a huge success so far, according to Fisher. “We are exceeding our targets significantly,” he said.

According to John Miller, the author of Yesterday’s News: Why Canada’s Daily Newspapers are Failing Us, Fisher “has a reputation as a corporate hatchet man, having presided over many staff-reduction programs starting with the mass firing he carried out as new publisher of the Kingston Whig-Standard in 1994.”

Fisher defended those cuts as necessary, as were subsequent staff reductions he made at the National Post and the recent downsizing at PNG. “The restructuring we have done has taken out of the newsrooms production work,” he said. “It’s not work that journalists do. There’s a digital evolution under way, and we’d be crazy to ignore it.”

Fisher insisted that both the Sun and Province will continue to publish in print and added there are no plans to close one newspaper or to merge them into one publication. “I didn’t come here to do that,” he said.

Postmedia raking in profits

While hard times have definitely visited the newspaper business with the advent of the Internet and the recent recession, there’s only one small problem with Postmedia pleading poverty. It is actually making very healthy profits. Its latest quarterly report shows that it made $32.8 million in its third quarter on $191.8 million in revenues, for a tidy profit margin of 17 per cent. It’sright there on page 2. That’s an enviable rate of return, given that the average profit margin of a Fortune 500 company is 4.7 per cent.

But it’s not quite as good as Postmedia did last year, when its return on revenue was 17.3 per cent, and not nearly as good as in 2011, when it raked in profits at a rate of 19.7 per cent. Postmedia reported that it suffered an operating loss of $95 million last quarter, but that figure is only arrived at by subtracting from its earnings some extraordinary and even imaginary expenses.

Restructuring costs of $16.8 million included severance packages incurred in jettisoning staff, which will save the company money in the long term.

Most of Postmedia’s supposed operating loss, however, comes from a $93.9 million “impairment” charge that resulted from a reduced valuation of the company’s worth. Far from bleeding red ink, the company turns out to be well into the black, just not far enough for some.

That could prove problematic in convincing Sun and Province press operators to make the kinds of concessions PNG is apparently looking for. The company has given Unifor, the new union created by the recent merger of the Communication, Energy and Paperworkers Union and the Canadian Auto Workers, until Nov. 18 to come up with agreement that would see construction of a new, more efficient printing plant that reduces costs by up to three quarters.

The company has already entered into a contract with an outside company to print the Sun and Province starting in early 2015, but it will not go into effect if the company and union reach a deal.

Press operators once had one of the most militant of the unions at the dailies, which were shut down by strikes and lockouts seven times between 1967 and 1994. Restrictive manning clausesoften required staffing levels on the presses that were well above what were required by advances in printing technology.

The multitude of powerful unions at the Sun and Province were consolidated into one as the result of a company initiative in 1996. Work stoppages have been infrequent ever since, perhaps because a large, diverse union tends to be less militant than a small one with greater solidarity. It looks like Unifor might get its first big test fighting for the jobs of its 260 press operators at PNG.  [Tyee]

Postmedia to close Kennedy Heights plant

Source: mediaunion.ca

The Kennedy Heights printing plant will be put up for sale immediately and operations there will cease sometime in 2015, the union was told today by Paul Godfrey, CEO of Postmedia.

The company presented two possible options going forward. One is contracting out the work currently done at Kennedy Heights. The company has “entered into a contract with Transcontinental” to print papers effective early 2015, Godfrey told Local 2000 representatives.

The other option is the union and company reaching an agreement to open a new plant that would cost substantially less to operate than Kennedy Heights. Godfrey explained that the contract between Postmedia and Transcontinental will not go into effect if the company and union reach a deal before Nov. 18, 2013 that reduces costs at a new plant by 70-75 percent.

Our current contract language says “there will be no involuntary loss of employment of any regular employee during the life of the contract as a result of” contracting out.

Union officers will be consulting with our legal counsel and meeting with members to discuss our next steps.

The company said it was hoping to have further discussions soon.

Postmedia also announced today that it is selling the Calgary Herald building and land and will be contracting out printing beginning in November.

 

Postmedia drops publishers

Source: theglobeandmail.com

Postmedia Network Inc. is trying to stanch losses by eliminating the publisher position at its chain of 10 newspapers, which includes the National Post, the Montreal Gazette, and the Ottawa Citizen.

A staff memo issued Tuesday afternoon by Paul Godfrey, Postmedia’s president and chief executive officer, said the company’s business operations are being reorganized into three regions, with all editorial functions overseen by the senior vice-president of content, Lou Clancy.
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Postmedia loss deepens

Source: theglobeandmail.com

Losses deepened at Postmedia Network Canada Corp. in the last quarter, as national and classified advertising in its newspapers continued to decline.

The publisher –which owns such big-city metros such as the Ottawa Citizen, Montreal Gazette and Calgary Herald in addition to the National Post – said it lost $14.2-million in its second quarter, compared with $11.1-million a year ago.

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