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rfmcdonaldTorontoist's Graeme Bayliss noted this morning the surprise news that the Postmedia Network bought Quebecor's English-language papers for $C 316 million.
The National Post, flagship paper of Postmedia, had an article with a complete listing of the titles involved. The Globe and Mail, meanwhile, noted that this is part of a strategy to try to compete with online and foreign digital media.
It's quite open to question whether this strategy will work out. Even this new behemoth, if its existence is approved by the Competition Bureau, will be but a minnow next to Google and Yahoo. I and others see no sign that this company will be any more financially self-sustaining than its predecessors.
The Postmedia Network announced today that it will acquire Sun Media’s English-language newspapers and speciality publications—175 in all—including its flagship daily, the Toronto Sun.
The $316-million deal, which also includes the rest of the Sun chain of papers, as well as the London Free Press and the free Toronto and Vancouver dailies 24 Hours, still needs regulatory approval, including the approval of the Competition Bureau. The process is expected to take several months.
Paul Godfrey, president and CEO of Postmedia, which owns the National Post, Calgary Herald, Edmonton Journal, and Vancouver papers the Province and the Sun, said in a statement that his company will “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.”
The National Post, flagship paper of Postmedia, had an article with a complete listing of the titles involved. The Globe and Mail, meanwhile, noted that this is part of a strategy to try to compete with online and foreign digital media.
The deal, financed by a mixture of debt and equity, comes with a dose of risk. Postmedia already owns competitor papers in many markets across the country, which raises warning flags around competition. In Edmonton, the company would own the Sun and Journal; in Ottawa, the Sun and Citizen; and in Calgary, the Sun and Herald. In Vancouver, it already owns the Province and Sun, which is not part of the Sun chain.
But executives at the debt-saddled publisher say the deal is a necessary move to scale up its digital might so it can compete with foreign digital giants like Google Inc. and Yahoo Inc., which draw massive audiences that are pressuring traditional media.
“I think the world is different now,” said Paul Godfrey, president and CEO of Postmedia and a former head of Sun Media. “I don’t consider the other newspapers competitors at all.”
The sale is subject to regulatory approvals, including from the Competition Bureau, and could test Canadian rules around competition in media markets. It will create a newspaper behemoth with more than 190 mass market and community newspapers, and more than 12 million unique monthly visitors online.
Quebecor president and CEO Pierre Dion said in a statement that newspaper revenues have fallen “year by year,” and that “the Canadian newspaper business absolutely needs consolidation to remain viable and to compete with digital media.” Quebecor keeps its French-language titles, including Le Journal de Montréal.
It's quite open to question whether this strategy will work out. Even this new behemoth, if its existence is approved by the Competition Bureau, will be but a minnow next to Google and Yahoo. I and others see no sign that this company will be any more financially self-sustaining than its predecessors.
