Postmedia to cut more jobs as net loss spikes


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.

to read the entire story visit this link

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



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.

Read entire story here

Newspapers hire ex-Clark aide to oppose her new recycling scheme


Look who’s lobbying for the struggling newspaper industry.

British Columbia biggest daily and weekly publishers have hired a key member of the BC Liberals’ 2013 re-election campaign in a last-ditch effort to change Environment Minister Mary Polak’s mind about the imposition of a hidden tax on newsprint.

Dimitri Pantazopoulos registered to lobby Polak on behalf of Pacific Newspaper Group, Black Press and Glacier Media from April 7 to May 7. The Maple Leaf Strategies partner’s registration with the Office of the Registrar of Lobbyists for B.C. says his objective is “recognition that newspapers are unique in relation to extended producer responsibility and finding a solution that reduces the cost of the (printed paper and packaging) regulation to newspaper producers.”

When Premier Christy Clark and the BC Liberals amended recycling regulations in May 2011, they did not include a requirement for producers to disclose the fees on printed paper and packaging to consumers. Multi Material B.C., which is overseen by executives of corporations like Walmart, Procter and Gamble and Tim Hortons, is scheduled to take over the province’s recycling system on May 19 and will charge producers a 20 cents-per-kilogram fee on newsprint.

Newspaper publishers estimate it will cost their industry $10 million a year. Newspapers Canada CEO John Hinds fears the fees will force more community newspaper closures and the loss of 300 to 500 jobs.

Toronto-based Postmedia, owner of B.C.’s biggest daily publisher PNG, donated $10,000 to the Liberals on Oct. 17, 2013, five months after its Province newspaper endorsed Clark over Adrian Dix and the NDP in the 2013 election. For the quarter ended Feb. 28, Postmedia reported a $25.3-million loss because of continuing declines in print advertising and circulation.

Pantazopoulos, a former Rob Ford and Stephen Harper advisor, moved to B.C. to be Clark’s principal secretary in April 2011. She promoted him to assistant deputy minister of intergovernmental relations before he took leave of absence to work on the BC Liberals’ re-election campaign. Pantazopoulos took credit for polls that predicted the surprise May 2013 win over the NDP, but has not published his detailed methodology or data. The week after the election, he resigned to become a lobbyist. His Maple Leaf office is on the fourth floor of the World Trade Centre at Canada Place, three floors down from Clark’s Vancouver cabinet office.

Pantazopoulos, however, will be competing for attention with two former Clark aides who are in MMBC’s corner.

Former Clark executive assistant Gabe Garfinkel quit government on Oct. 25, 2013 to join Fleishman Hillard where his lobbying clients include a mix of biopharma and energy corporations. Garfinkel’s MMBC lobbying undertaking began Dec. 2, 2013 and runs until Dec. 31, 2014. His stated plan is “ongoing discussions to provide program updates.”

Steve Kukucha, a partner in Liberal-allied Wazuku Advisory Group, has a more complex assignment with MMBC. Kukucha was the so-called “wagon master” of Clark’s campaign this time last year, managing her media plane and bus. His lobbyist registration lists Clark, deputy minister Neil Sweeney, Polak and aide Matt Mitschke as lobbying targets for “assisting with issues around implementation of MMBC mandate.”

Since the Liberals won, Kukucha has gained eight lobbying clients. Last month, he registered for Quebec alternative energy company Enerkem and tire recycler Crumb Rubber Manufacturers Co. In February, he effectively took over from ex-federal Tory cabinet minster Chuck Strahl as a key lobbyist for pipeline company Enbridge.

Strahl registered Dec. 6, 2013 to set-up meetings between Enbridge and deputy premier Rich Coleman through June 6, but quit prematurely on Feb. 12. The Vancouver Observer revealed the previous month that Strahl was lobbying for the Northern Gateway Pipeline proponent while serving as the chair of the Security Intelligence Review Committee, the watchdog for Canada’s federal spy service.

Kukucha began his Enbridge lobbying gig on Feb. 20, naming Clark, Coleman, Polak, Energy Minister Bill Bennett and Aboriginal Affairs minister John Rustad as his targets. Also named on his file are Sweeney, Clark’s chief-of-staff Dan Doyle and deputy chief of staff Michele Cadario.

Kukucha donated $9,915 to the Liberals since 2005, of which $6,100 was in his former role as an executive with Ballard Power. Wazuku donated $8,275 in 2012 and 2013 to the Liberals.

North Vancouver-based journalist Bob Mackin has reported for local, regional, national and international media outlets since he began as a journalist in 1990.

– See more at:

US Hedge Funds Squeezing Profitable Postmedia: Union



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


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.


Print cancellation is a “dose of reality” for Globe subscribers


By Kelly Toughill, Business of Journalism editor

Canadian newspapers gave readers a sharp reminder this week that advertisers – not subscribers – still rule the show in print.

Four Postmedia newspapers and the Globe and Mail cancelled Labour Day publication because of low ad sales, theCanadian Press reportedGlobe and Mail advertisers found out weeks ago about the change, but readers only learned Tuesday that they will not have a paper at the door Monday morning. Globe and Mail publisher and CEO Phillip Crawley said a few readers have complained about the cancellation – and the reason for it.

“Some (readers) have said, ‘Hey, what’s this about you saying it’s lack of advertising?’” Crawley said. “Well I think a dose of reality is not a bad thing. That’s the truth of the situation, so let’s not pretend it’s any other.”

Click here to read the entire story

California newspaper defies industry wisdom to stay alive – and prospers


Orange County Register shocked the crisis-stricken industry with an ambitious experiment. One year later, the paper is celebrating Conventional media wisdom posits several ways for a newspaper to commit suicide. It can drive up costs by multiplying staff and pagination. It can prioritise print over digital. It can erect a hard paywall to seal itself from the internet. click here to read the entire story

Chicago Sun-Times lays off its photo staff


By Robert Channick, Tribune staff reporter

The Chicago Sun-Times has laid off its entire photography staff, and plans to use freelance photographers and reporters to shoot photos and video going forward, the newspaper said.

A total of 28 full-time staffers received the news Thursday morning at a meeting held at the Sun-Times offices in Chicago, according to sources familiar with the situation. The layoffs are effective immediately.

The newspaper released a statement suggesting the move reflected the increasing importance of video in news reporting:

“The Sun-Times business is changing rapidly and our audiences are consistently seeking more video content with their news. We have made great progress in meeting this demand and are focused on bolstering our reporting capabilities with video and other multimedia elements. The Chicago Sun-Times continues to evolve with our digitally savvy customers, and as a result, we have had to restructure the way we manage multimedia, including photography, across the network.”

read the entire story here