Postmedia-Quebecor Deal: Media Ownership Worries Are 'Beside The Point': Expert

Posted: Updated:

TORONTO - Postmedia's plans to buy Quebecor's stable of English-language newspapers and websites may resurrect concerns about whether the concentration of media ownership in Canada will narrow the range of editorial voices the public relies on for information, experts say.

But some say it may be the only way to keep newspapers alive in an industry that's struggling to survive.

"What we're talking about here is one threatened company ... buying properties whose future was in doubt," said Ivor Shapiro, chair of the Ryerson School of Journalism in Toronto.

If Calgary has two newspapers with the same owner, so be it, he said. It's been going on in Vancouver for years, with two papers competing editorially with areas of co-operation on the business side, such as advertising sales.

"That is way better at the end of the day than seeing both of those news organizations close down," he added.

Chris Dornan, associate dean of the faculty of public affairs at Ottawa's Carleton University, argues the concentration of newspaper ownership isn't a concern in the digital age, where there is no longer a centralized source of information for a dispersed group.

Sources of information, types of content and ways in which people can communicate with each other have exploded on the Internet, he said.

"In that environment, worrying that a smaller and smaller number of companies own a larger number of newspapers is kind of beside the point, because the newspapers themselves have been eclipsed in their social, political and economic prominence by the new digital concourses of communication," Dornan said.

"So basically the old worry about concentration of ownership was a legitimate worry only when there were limited numbers and a limited variety of sources of information, but that simply doesn't obtain any more."

Newspapers have struggled to compete with online media operators, who can offer better ad rates and massive reach to various demographics. Many newspapers have tried to generate revenue by charging readers to read their content online.

Postmedia is in debt, owing nearly half a billion dollars and posting a loss of $20.6 million in its third quarter ended May 31. Quebecor, which also has a telecommunications division, posted a loss of $54.8 million in its second quarter, with revenues in its news media division down 7.3 per cent to $14.6 million.

The proposed deal would allow Postmedia to offer "one-stop shopping" for advertising, where it could promise an extended and demographically segmented reach across its cross-Canada network, Dornan said. A business that wants to advertise in Edmonton can reach almost everyone in that city.

"You could basically blanket a city with an advertising campaign going through just one company," Dornan said. "You don't have to make multiple advertising purchases and so there would be cost savings to the advertiser."

The $316-million deal includes 175 newspapers and publications, including the Sun chain of daily newspapers, the 24 Hours free commuter papers in Toronto and Vancouver as well as, which Postmedia chief executive Paul Godfrey said may become "the jewel of the deal" over time.

The Competition Bureau said it will review the proposal, considering factors such as the definition of the relevant market to come to a determination of whether the deal is likely to prevent or lessen competition substantially.

"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," John Pecman, commissioner of competition, said in a release.

Godfrey said things have changed since 1998, when Torstar made a hostile bid for Sun Media, sparking worries it would put control of Canada's newspapers into fewer hands. Quebecor ended up beating Torstar with a $983-million offer.

Google, Facebook and other major websites are their big rivals now, he said.

"The world is dramatically different," he said. "Newspapers aren't competitors with other newspapers anywhere close to what they were. In fact, I don't consider other newspapers competitors at all."

Things have changed, but much of it is in the way people consume news and how it circulates, not the underlying sources of news, said Dwayne Winseck, a journalism professor at Carleton University who studies media concentration in Canada.

Many people say they get their news on social media sites like Facebook, but they're clicking on links to news stories posted by their friends that brings them back to newspaper sites, he said.

"Google nor Facebook nor Twitter — none of these social media giants are originators of content to any significant degree," Winseck said. "All have offered some tidbits, but none are significant contributors to the common pool of news."

Around the Web

Postmedia-Quebecor deal raises questions on future of newspapers

Quebecor sells English-language newspapers to Postmedia

Sun Media acquisition to 'create a stronger Canadian media platform'

Postmedia Could Soon Own Almost Every English Newspaper in Canada: What ...