Postmedia to close Sunday papers in Ottawa, Edmonton and Calgary, cutting jobs and costs across chain

Canada’s largest daily newspaper chain will lay off some staff,
centralize more operations and cease Sunday print publication in three
major markets, Postmedia Network has confirmed.
In addition, its flagship publication, the National Post, will stop
producing a print edition on Mondays for at least the summer and perhaps
longer, the Toronto-based company also said.
The move comes amid an industry-wide decline in advertising revenues and
increased competition from foreign-owned digital-only publications,
Postmedia chief executive officer Paul Godfrey said in a telephone
interview.
Unlike its competitors, Postmedia is also servicing a large $516 million
debt, the legacy of several ownership changes that began when Conrad
Black sold the former Southam chain for a record $3.2 billion to the
Asper family in 2000.
Godfrey said the cost-cutting had less to do with debt repayment and
more to do with cutting print costs in order to invest in digital
platforms. Readers will continue to be served online, he said.
“We’re no different from the rest of the industry,” Godfrey said, noting
that the Globe and Mail recently announced it is seeking voluntary
unpaid three-month leaves from 80 staff members in order to reduce
costs. “The publisher of the Globe and Mail said it was the worst April
ever. We can sympathize with him.”
Citing an industry-wide fall in advertising revenue, the Globe has also
moved up plans to introduce a paywall on the newspaper’s website, where
readers would be required to pay for stories beyond a certain monthly
minimum.
“We know that print advertising revenue decline is ongoing across the
industry. And a lot of the lost revenue in Canada is going to
foreign-owned and controlled digital companies who, without any
regulation, are accessing Canadian audiences and eroding Canadian media
revenues,” Godfrey wrote in a memo to staff.
He was referring to Google, Facebook and the Huffington Post, he said in
a later interview, noting they’re exempt from regulations that require
newspaper publishers to be majority Canadian owned in order for
advertisers to qualify for a tax break.
When asked if he could foresee a day when Postmedia would cease print
editions completely, Godfrey said: “Absolutely not.”
The three Sunday papers affected include The Citizen in Ottawa, the
Herald in Calgary and the Journal in Edmonton, the company said.
The changes, which will take place over the coming weeks, were announced
in an internal note to Postmedia’s 4,000 employees Monday.
It was not immediately clear how many employees would be affected.
More than 20 positions will be removed from The Gazette newsroom,
according to an internal memo to staff from publisher Alan Allnutt.
The union representing Postmedia journalists at The Vancouver Sun and
The Province decried the cuts saying it will lead to a “vicious cycle”
of declining quality and reduced readership.
“The big concern we have is that it may lead to a continuing frittering
away of the quality of the newspaper and that will lead to further
declines in circulation. It’s a vicious cycle,” said Mike Bocking, a
representative with the Communication Energy and Paperworkers union.
“We know all about the struggle to find the new revenue model for print
journalism and no one seems to have found it yet. One thing we do know
is cutting newsroom staff to profitability will hurt us in the long
term,” Bocking added.
A key piece of the announcement would see the company move more
newspaper print production functions to its centralized service desk in
Hamilton, Postmedia Page Editorial Services.
About 100 full and part-time non-union employees currently lay out the
pages for some Postmedia newspapers.
In addition to page layout and pagination, the Hamilton service will
assume copy editing functions, the company said.
“We’re further expanding to accommodate all editorial production of all
our newspaper pages, allowing our newspaper to concentrate on local
content with respect to sports and local news,” Godfrey said.
Some pages, especially those containing world and national news, could
eventually be common to all papers in the chain, he said.
In Ottawa, The Citizen will cease Sunday publication in mid-July while
Edmonton will publish its last Sunday edition on June 24. The Calgary
Herald would cease Sunday publication in late July, Godfrey said.
Postmedia, which issued public shares last June, has seen its stock
price plummet from a high of $17.75 a share last June 24 to a low of
$1.26 on this May 3. It closed at $1.35 Monday.
The Toronto-based newspaper publisher reported a loss of $11.1 million
for the quarter ended Feb. 29, 2012. Revenue fell 7.6 per cent to $198.6
million.


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