Collusion By Any Other Name

On September 28 when Heritage Minister Melanie Joly announced she was doing nothing for local news, but that local news was nonetheless a “pillar” of her vision for media, I said to myself: it’s going to take bodies, lots of bodies.

Here are the bodies: Postmedia and Torstar announced on November 27th they were swapping local weekly and daily papers. Thirty-six of them immediately closed, 21 by Postmedia and 14 by Torstar, including dailies the Orillia Packet & Times, the Barrie Examiner, Metro Vancouver, and Metro Winnipeg. Three hundred journalists and media workers were fired.

The swap and close was a workaround federal collusion laws. It is of course, collusion by any other name. Both Postmedia and Torstar claim they had no idea the other would close almost all of their newly acquired papers, despite doing exactly the same thing at exactly the same time.

The closings were driven by plunging newsmedia revenues. Postmedia consolidated its Ottawa footprint as Torstar mostly withdrew from the capital region. Torstar consolidated in the Niagara and Kawartha regions as Postmedia stepped back.

Postmedia’s Paul Godfrey was not especially skilled in his corporate humility, wasting no time in (correctly) blaming Minister Joly for her inaction. Annoyed, the Minister shot back that the closings were “cynical.”

Torstar meekly protested that it was not creating news deserts (only news monopolies).

The news deserts aren’t far away. When Torstar bought the Cambridge Reporter in 1999, a Torstar executive told me that “we didn’t buy [the Reporter] just to close it.” This despite the Reporter being a competitor to Torstar's larger daily in Kitchener

Four years later, they closed the Reporter.

The federal Competition Bureau announced it will investigate the latest swap and close.

Don’t expect much. In 2014 Black Press and Glacier Media did the same thing, swapping and closing a long list of weeklies in British Columbia. The Bureau did nothing, likely because advertisers still have lots of ways to reach consumers, including television, radio, Facebook and Google. And on the reader side of the equation, losing access to a free commodity doesn’t sound much like a restraint of trade.

Mind you the political atmosphere in 2017 is different from 2014 and the change in government makes interesting speculation about what the Competition Bureau might do. The Trudeau government has been embarrassed by its lack of action on local news and a scapegoat could be just the thing.

Meanwhile, nothing has changed the basics of the local news problem. Google and Facebook have irreparably broken the link between advertising revenue and journalism. The Liberals are either going to do something about this or watch journalism die on its watch.

It’s time for the Liberals to put ita money where its mouth is and save local news. They’ve been offered a full menu of options by Unifor, Newsmedia Canada, its own consultant in the Shattered Mirror report, and notably by the Liberal-dominated parliamentary Heritage Committee.

It’s not just financial assistance that’s needed. It’s leadership. If it weren’t for Postmedia and Torstar’s collusion, many of those 36 local papers might have found new community owners, including employee co-ops, and survived a few more years while the Liberals make up their minds about saving journalism.

In fact, the Liberals could even think about a quid pro quo. In exchange for serious federal assistance to local journalism, news companies planning to close local papers would be obliged to provide public notice of closing, repudiate collusion aimed at creating news monopolies, and co-operate in the transition to community ownership.

That would be federal leadership.