After Postmedia announced its bid to buy 175 Sun Media newspapers and online news sites on Oct. 6, the union for workers at both media heavyweights will be keeping a close eye on the purchase as it unfolds.
Unifor, which represents about 12,000 media staffers across the country, including at Postmedia and Sun Media, cited possible closure and competition as particularly concerning. As such, the union said it will be holding Postmedia president Paul Godfrey accountable to his promise not to shutter any publications as a result of the sale.
“This is a very difficult time for our members, and Unifor will be there for them to protect their rights and their ability to do their jobs effectively, as well as the future viability of this important industry,” said Howard Law, media director for the union.
Quebecor is selling its Sun Media chain of newspapers (such as the Toronto Sun, Edmonton Sun and the London Free Press) in a $316 million deal (less a $10 million adjustment in relation to real estate) in an attempt to combat the struggles of dwindling advertising and subscriber revenues. Postmedia, which owns such publications as the National Post, Montreal Gazette and Vancouver Sun, will finance the deal by issuing $140 million in new debt and raise $186 million through a rights offering of subscription receipts.
“The 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 and offers a greater range of choices to our readers,” Godfrey said in a statement. “We intend to 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 as we have in Vancouver with the Province and Vancouver Sun for more than 30 years.”
Should it come to fruition, the merger will be subject to approval from the government-led Competition Bureau.
“While media ownership concentration can raise other public interest concerns, under the Competition Act, the bureau’s mandate is to review mergers exclusively to determine whether they are likely to result in a substantial lessening or prevention of competition,” explained John Pecman, the commissioner of competition at the bureau.
This is particularly worrying for journalists at Postmedia's Vancouver Sun and the Province. Back in 2010, New York-based hedge fund company Golden Tree Asset Management effectively rescued Postmedia from bankruptcy by acquiring $700 million in bonds.
“It is a sad day when scores of Canadian newspapers fall into the hands of U.S.-based hedge funds,” said Gary Engler, vice president of the local Unifor chapter in Vancouver. “Our Postmedia members have experienced four years of cutbacks and centralization from a company effectively controlled by Golden Tree Asset Management and we expect this sale will lead to more of the same. (We) will do what we can to protect our members’ interests and to defend Canadian journalism.”
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