Newspaper Men Want Taxpayer Help To Keep Them Printing

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MONTREAL — The CEO of one of the largest newspaper publishers in Canada is joining the growing chorus of calls for public funding to help the battered print media industry.

Francois Olivier, who heads Transcontinental, said the company needs temporary financial help until the digital products it is developing mature.

"If not, there's a good chance that there will be less newspapers and less Canadian local content in my business,'' Olivier said in an interview Friday.

Olivier declined to say how much he's seeking from both the federal and provincial governments. But he said even a relatively little amount would send a strong message that local news content is important.

francois olivier
Transcontinental chief executive Francois Olivier. (Photo: Ryan Remiorz/CP)

The print industry needs relief from rising environmental costs for recycling and tax breaks or subsidies to help hire reporters, he said. He also pushed for more advertising from politicians and tax breaks to help fund digital investments.

Olivier said local community publishers have started to feel the pain from lower ad spending that first hurt large daily papers.

Just two weeks ago, Transcontinental announced the sale of all of its assets in Saskatchewan, including 13 newspapers. The deal with Star News Publishing leaves Transcontinental with 150 newspapers in Ontario, Quebec and Atlantic Canada.

francois olivier
Francois Olivier. (Photo: Graham Hughes/CP)

Olivier said Transcontinental was able to initially adjust to a two to four per cent annual decrease in ad revenues by improving efficiencies and consolidating. But annual revenue declines have accelerated to 10 per cent in the last 18 months, cutting $25 million from its bottom line.

"So there's a lot of pressure in the system right now,'' he said. "We are talking to the government to try to relieve some of that pressure for the next three to four years to give us the time to build a new digital audience and new digital products.''

Oliver is just the latest media executive to make pleas for public funding for the print industry.

Last month, Postmedia president and CEO Paul Godfrey told a parliamentary committee studying the industry's future that Ottawa needs to spend more on Canadian newspaper ads and give greater tax breaks to companies that do the same.

Godfrey pointed to federal statistics showing government advertising in newspapers was halved between 2010 and 2015, while online advertising nearly doubled to foreign-owned behemoths like Google and Facebook that produce no original Canadian news content.

paul godfrey
Postmedia CEO Paul Godfrey. (Photo: CP)

"We're asking the government to be an ally, not for a bailout of the Canadian newspaper industry,'' he said.

Olivier went a step further but said government support, aside from lower recycling costs, should only be short-term.

"At some point, the industry needs to be self-sufficient and do their own business model.''

He also welcomed a recent study from the Confederation of National Trade Unions in Quebec, which called for urgent involvement by government, including a tax credit on salaries.

paul godfrey olg
Paul Godfrey. (Photo: CP)

Despite the challenges facing the industry, Olivier said Transcontinental has begun to play offence by adding flexible packaging operations and winning large new printing contracts, such as one with the Toronto Star that begins next month.

In its second quarter earnings released Friday, Transcontinental reported that net earnings fell by 93 per cent to $5.4 million. The company attributed that to a large gain last year from the sale of its consumer magazines, the reversal of pension plan provisions and an impairment charge this year related to its newspapers in the Atlantic provinces.

Excluding those items, Transcontinental's adjusted earnings fell by 12.5 per cent to $34.2 million while its revenue edged up to $497.2 million from $490.5 million.

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