Postmedia buys Sun Media newspapers

GMT 21:22 2014 Monday ,06 October

Arab Today, arab today Postmedia buys Sun Media newspapers

Other publications included in the deal are The London Free Press
Ottawa - AFP

 Canadian newspaper chain Postmedia Network scooped up competitor Sun Media's English-language tabloids in a deal announced Monday worth Can$316 million (US$281 million).
The sale, if it is approved by the Competition Bureau, will consolidate most daily newspapers across Canada under one banner.
Postmedia Network already includes the National Post, Ottawa Citizen and Calgary Herald, titles once owned by disgraced media baron Conrad Black.
It is buying up 175 Sun newspapers and publications, including dailies the Ottawa Sun, Toronto Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun.
Other publications included are The London Free Press, the 24 Hours dailies in Toronto and Vancouver, and community dailies and weeklies, buyers' guides and specialty publications.
Postmedia also acquires 34 properties with more than a million square feet (92,900 square meters) of space, which it said it would try to sell off. The properties are valued at about Can$50 million (US$45 million).
That leaves only five independent or competing dailies in major cities throughout the country: La Presse in Montreal (French), the Globe & Mail and the Toronto Star in Canada's largest metropolis, the Winnipeg Free Free Press and the Halifax Chronicle Herald.
- Media consolidation -
In 2013, the Sun and PostMedia newspapers posted combined revenues of about Can$1 billion last year.
Their merger is expected to result in Can$6 million to Can$10 million (US$5.4 million to US$9.0 million) in synergy savings per year. As well, the additional cash flow will allow Postmedia to pay down its debts sooner, according to a statement.
Postmedia president Paul Godfrey said: "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."
Godfrey said Postmedia intends to continue to operate the Sun Media major market dailies side by side with Postmedia's newspapers in cities where there are both.
He noted that Postmedia has been doing so for 30 years in Vancouver, where it owns both dailies -- the Province and Vancouver Sun (unrelated to Sun Media chain).
Critics, however, say the concentration of media ownership in Canada's third-largest city has stifled diverse views.
It can also lead to a media group becoming loyal to advertisers and government rather than public interest, slower innovation and increased prices, and public discourse being directed by an elite few, the critics say.
Postmedia has in the past countered such arguments by saying the Province and Vancouver Sun were competing against a litany of weekly newspapers, as well as broadcast and online news.
"Consumers now have many ways to get their news, and as a result the newspaper business has faced increasing competition from digital media and new technological platforms," Pierre Dion, president of Sun Media parent company Quebecor, said Monday.
"This transaction therefore comes at a time when the Canadian newspaper business absolutely needs consolidation to remain viable and to compete with digital media.
"The transaction will also keep Sun Media Corporation's properties in the hands of a well-established Canadian group."
The Competition Bureau must still approve the deal.
In a statement, Commissioner of Competition John Pecman said he may consider only whether the merger is "likely to result in a substantial lessening or prevention of competition."
Martin O'Hanlon, president of the country's only all-media union CWA Canada, called the transaction "hopeful, troubling and puzzling."
He said, "The deal sounds instant alarm bells over concentration of ownership, with Postmedia set to hold a near monopoly on English-language newspapers in Canada."
He noted that Postmedia has been struggling under a massive debt, slashing resources, laying off workers and "pleading poverty for years," and he questioned the wisdom of taking on more debt in order to grow bigger.
"On the optimistic side, we hope this means Postmedia will put more money into quality journalism, especially at Sun Media where journalism has been on life support under Quebecor," O'Hanlon added.


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