Monday, 6 October 2014

Postmedia $316M purchase forum

Today, a Toronto Star headline reads: Postmedia buys 175-paper Sun Media for $316m

http://www.thestar.com/business/2014/10/06/postmedia_buys_175paper_sun_media_for_316m.html

If the sale is approved, what will it mean for survivors of the 15-year downsizing by Quebecor?

Postmedia is Paul Godfrey and Paul Godfrey et al pocketed millions in selling Sun Media to Quebecor in 1999.

We would prefer to think positive, but if it comes to a choice of shuttering the National Post or the Toronto Sun the folks working at the remains of 333 King Street East should be prepared to vacate.
 
What is it they say about the light at the end of the tunnel is usually an oncoming train?

Have your say.

62 comments:

  1. Reposted from anonymous summer 2014 forum

    By now everyone has heard the news...the Sun has been sold to Postmedia. This deal does not include Sun News TV which is a sure sign it is about to die a quick and well deserved death.

    Look forward to seeing how this pans out as Postmedia is now in control of practically every major English newspaper. In many cities such as Edmonton, they will own both the Journal the Sun which means in time someone is going down.

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    1. Not necessarily. I think that the Sun & the Postmedia papers in "cities such as Edmonton" have different readerships.
      Comedian Stuart Lee once commented on his use of irony as a marketing strategy. Some get it, some take it literally, so I get both the Guardian AND the Mirror readers.

      dz alexander

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  2. Reposted from anonymous summer 2014 forum

    I got let go last year after surviving six years' worth of layoffs and so forth. While the Postmedia acquisition doesn't mean things will be all and good in the former Sun Media papers it has left me feeling a little sick to my stomach. If I had just managed to last through one more round of layoffs...

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  3. Watch out Sun papers. Post Media is running larger papers than yours with far fewer people. They expect to realize a savings of over $10 million (Post Media) to save like that means some will have to go. Hold your breath it's gonna get bumpy people.

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  4. Anonymous at 15:14, you are completely wrong. Post Media owns 16 papers with a staff of 2,800. Sun Media owns 175 papers with a staff of 2,400. Below are the sources on that:

    http://en.wikipedia.org/wiki/Postmedia_Network

    http://news.nationalpost.com/2014/10/06/postmedia-buys-sun-medias-english-titles/

    The people who should be afraid are english-language QMI management (what exactly will you be managing now?), union staffs (your contracts are null in void if a sale goes through) and frankly Postmedia staff (Sun staff can do way more with way less resources now).

    This sale is happening because Postmedia is $400M in debt. Instead of funneling Sun Media profits into the flailing TV station, that money will go directly toward paying down their company's debt.

    I get annoyed with the constant bitching on this site. Does it suck that people have been laid off? Yes! But guess what? Layoffs are happening in ALL print markets, not just in Sun Media. Focusing on online is the only thing that will keep us from dying.

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    1. Don't agree entirely. I am a Postie and let me tell you, we are accustomed to the concept of doing a lot with little. I can say the mood on the edit and ad floors was a good one; this shows a commitment to the long-term. And, do not forget that Sun readers are not Post readers; very different demographics. I think you will see those Sun papers in communities also served by PM will be around for a while yet. Really, though, this puchase was not made with the print vehicles as the lodestone. PM is banking heavily on being a leader on the digital side ... this deal broadens that reach dramatically. Oh, and getting a printing plant was sweet, too ... as was the conformation that Sun TV was not part of the mix - cheers all around there, I tells ya ....

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    2. "union staffs (your contracts are null in void if a sale goes through)" No, they aren't actually - read some labour law. If anything it would be easier to layoff non-union Post staff (and Sun managers) than unionised Sun staff.

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  5. Wow, they got NOTHING for the papers. That's less than $2 million per title. There's barely anything left to sell.

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  6. Union contracts are not null and void when companies are sold. They are contracts. You may be confusing bankruptcy with continuity of employment provision of the Labour Relations Act http://www.labour.gov.on.ca/english/es//pubs/guide/continuity.php.

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  7. Everything is speculation. It's six months before the deal is finalized. Postmedia is an actual, competently-managed organization (won't that be a difference) and will take its time with forensic accountants and such sifting through the smouldering remains Quebecor has left behind.

    People accustomed to PKP's tantrums and tiaras can take a breath for the time being. No Christmas culling.

    That said, qmi should be worried (Postmedia has CP... why do you need qmi?), along with canoe (since they have canada.com ...) and anyone who builds pages. Duplication is a four-letter word. Anyone with "national" in their Sun Media job title should probably get their CV ready, too, as hyper-local reporters and editors (news and sports) will survive, regardless of the paper or platform.

    They are not going to have one company with two centralized editorial operations.



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    1. What happens to people who are doing double duty between print and Sun News Network? Who goes where?

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    2. Well, they do their print job, don't show up for Sun News Network and because the "network" has an audience of zero, nobody notices. The Huff Post, btw, says Kory Teneycke is trying to find investors to keep his baby alive, away from Quebecor. Since, you know, it's dead as dirt there. The hilarity never ends .......

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  8. Has anyone else had the hilarious experience of going to canoe.ca and finding it all in French? way to go, clowns.

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    1. It's all French because you surfing from work (my guess a Sun paper) and your servers that run your internal network are based in Quebec - that is why you get the French version. I hope your not a reporter. Should have been easy to figure out.

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    2. No, it's because the English content's been moved to en.canoe.ca

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    3. That's it, exactly. Was not at work, nowhere near a Sun paper. Typing in canoe.ca, it was going to "fr.canoe.ca" or to the "english or french" option instead of "en.canoe.ca"

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  9. jeez, given the price even I could have bought a couple of local newspapers...I give Godfrey credit for what he did and the dough to take such a hell of a leap.

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    1. The original 'Osprey' papers were purchased from Hollinger for $7.5 million per title (on average). Most of those same titles were bought Monday for $1.7 million...

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    2. Sadly hardly worth the $1.7 for some of them. What a shock they will have at Post Media when they open the books on some of these poor titles they are buying.

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  10. wait for part 2 of this deal

    where godfrey sells off the weeklies to glacier or black and recoups most if not all of the 316 million

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    1. Probably not in the books. As a whole the community papers bring in more revenue than the four major dailies.

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    2. The urban dailies tend to have an inflated opinion of themselves. The money is in hyper-local news and sports in community papers. The fact is, 85 per cent of the content on any Sun site or in any Sun paper can be attained anywhere.

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  11. Read in the Star that at the Toronto Sun, employees were "running victory laps" and cheering the news. WTF. Aren't these the same people who cheered when Quebecor's "white knight" bought them 15 years ago? Do they never learn?

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    1. I'm pretty sure the happiness is not from some sense of relief, more a sign of the absolute disgust and hatred the employees have for quebecor and the way they've treated their anglophone employees.

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  12. To quote The Who:
    "Meet the new boss;
    Same as the old boss..."
    Centralized pagination, offshore graphic design, nearly empty newsrooms. We shall see if they add staff to gutted operations or just shutter the things.
    Once they take a hard look at some of the circulation at some of the smaller dailies, they'll throw up.
    Closures and layoffs may be delayed, but they will come, just not this Christmas.

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    1. Part of any sale or purchase it that of good will. They buy the title with the assumption that they are buying, in this case a newspaper (s) that are beloved by their customers. We all know that as stated earlier, "when they see the circulation, they'll throw up" I was embarrassed to tell people our paid circulation numbers, they are pitiful. We try to not mention paid versus free, it just complicates things.

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  13. The more you think about it, the more you can see the future. Consider all the duplication that currently exists: two chains sending teams of reporters (and columnists) to cover the same events -- whether it's a political race or a sports game or a movie premiere. All of that is going to collapse. Never mind the pagination hubs or the wire services, which will be the first to be axed/merged.

    Yes, Postmedia will keep the Sun brand alive for a few more years. But you can see how they could get by with Postmedia providing 80 per cent of the copy, with a few news and sports columnists providing color commentary "exclusively" for the Suns. If you look at the Sun and Province in Vancouver, there is plenty of cross-over. And that's the model Godfrey mentioned.

    Remember Postmedia exists, not to produce Canadian journalism, but to generate revenue for its hedge fund investors, who want to pay off the 400 million in debt they currently have on the books from the CanWest days.

    If they add anywhere, it will be in the community markets. There was a pie chart of the new company published this week that summed it up: 60 per cent of the new company's revenue will come from Postmedia papers; 20 per cent will come from the communities; 18 per cent will come from the Suns. (With another 3 from somewhere.)



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  14. All this talk about the big dailies....what about all us folks in the community weeklies? There are a lot of us and a lot of community papers..some doing well...some not. Where oh where will we fit in??

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  15. Postmedia has halved its staff since 2010 to roughly about 2,800 workers. Sun Media, which it just bought, has about 2,400 employees. So with this deal, it basically doubled its number of workers. Considering it still has 400 million dollars in debt to pay off, does anyone doubt the new company is going to shed hundreds or even thousands of bodies over the next few years? If you are nearing retirement age, it may make sense to wait it out. But if you under the age of 55 .... you're screwed.

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  16. Pretty quiet on the sun media front eh?

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    1. Calm before the storm???

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  17. Was there any official confirmation Quebecor still won't cut more jobs this year, before the takeover is complete? Is that the understanding around newsrooms?

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    1. With an agreement to purchase from Postmedia and the Competition Bureau looking at the transaction over the next six months, there will not be any layoffs this Christmas.

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    2. It's my understanding that "the culling" will not happen this year...nothing can be changed before the deal is approved.

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  18. Having lived through the cuts since 2008 until being cut September 2013, it's better to get cut than live under the constant fear waiting for it to happen. Some former Sun Media/Quebecor employees have started their own newspapers and are doing well. I used my severance from last year to launch a weekly paper and am competing with a Sun Media publication. I find that many readers - and advertisers - prefer independent newspapers than dealing with corporate publications. A seasoned publisher, who launched several papers, recently told me it's a good idea to start an independent wherever there is a chain newspaper. Is he right? I don't know. But the response from the community for the weekly paper that I launched has been overwhelmingly positive and better than I expected. In addition, even though the first issue just rolled off the presses this summer, one month later I had two advertising agencies, who place government and corporate ads, contact me to place full page ads. Maybe the trend in the future will be towards more independents starting up?? The readers can only benefit from that, in my opinion. Just a thought.

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    1. Well, if you have been successful in launching a new paper, please consider doing the same in Mississauga where this sixth largest City in Canada is milked by the Mississauga News (Torstar) and has given back very little to the community. This has been going on for decades. I am not a media person but it appears to me that there is enough advertising out here for a person to start a newspaper which is able to deliver credibility rather than the tripe which has been on offer all these years. Please check out the Mississauga market and see if it is viable.

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  19. what market if you don't mind me asking.

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  20. Central Alberta. Both Sun Media and Black Press papers go into the area I started the community paper. We already have advertisers that they have - and advertisers who don't advertise with them or anyone. One advertiser cancelled their radio advertising to go with this new independent publication. People seem to like that it's an independent.

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  21. My prediction is post media takes control of sun media and closes non profitable sites. Within 5 years they are forced to sell whole company and Transcon come in and buys the lot. Post media survives a bit longer because of sun media profits but those profits are dwindling.

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  22. An interesting note from Macleans for all those Sun Media employees who think they have been cut as far as they can, and that Postmedia is bloated: "In its 2013 annual report, Quebecor included a figure that showed the ratio of costs-to-revenue at its news media division. Last year, that ratio was 87.5 per cent, meaning that, for every $1 in revenue, 87.5 cents went to pay employees or was spent on buying goods and services like newsprint and distribution. That ratio was down slightly from 88 per cent in 2012—in a year when Quebecor’s media division eliminated 560 positions. Postmedia doesn’t include a similar ratio in its latest annual report, but tally up the company’s employee compensation, and how much it spends on newsprint, distribution and other operating costs and its cost-to-revenue ratio was just 83 per cent. Quebecor’s newspapers are positively bloated by comparison." In other words, yes Sun Media folks, there are too many of you. Enjoy this Christmas like it's your last.

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  23. maybe they will close down papers if they are not making any money, i know some papers in alberta that are definitely not making money,

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  24. I fear it will be more of the same. Work harder Sun/Post folks, we'll be far more with a lot less. With a bright light at the end of the tunnel...at least I don't work at 333 in a corporate position...this is where the cuts will start.

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  25. I bet all us corporate employees will go the way of the Osprey. When Sun bought Osprey, Osprey management and corporate employees stayed on for a while, now most are gone. Maybe same thing will happen to us with Post Media.

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  26. I hear Metroland is giving Sun Media a pretty good beating in Niagara lately, changes coming soon.

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    1. Metroland is smart. Nobody in a depressed region is going to pay for a subscription for a crap paper that has next to no local reference. The free paper tossed on their driveway, stuffed with flyers, has more value. Nice job, Sun. You've been kicked in the nuts.

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    2. Hopefully the first thing Postmedia does is take a giant broom to the corporate offices of Sun Media. English-loathing Quebecor is ultimately to blame, yes, but remember they didn't do it without their yes men/bureaucrats goose-stepping along the way.

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    3. How could you possibly claim that Metroland is giving Sun Media a beating in Niagara?! Give us your metrics on that one.

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  27. It will be like the Osprey merger, but accelerated. Postmedia's financials are horrible - they are deep in debt and revenue, both in print and digital, is in decline. Print, btw, still accounts for the vast majority of revenue so any talk of Canoe being "the jewel in the deal" is nonsense meant to make the hedgefund guys in NYC feel better.

    The only strategy is to cut costs as much as possible while keeping the brands alive, as the real "jewel in the deal" is the prospect of monopolizing advertising revenue in markets where they will be the only game in town.

    I would expect within a year's time, the Suns will be moved physically into the Postmedia buildings/newsrooms. For those who have been around long enough to remember, the Calgary Sun is going to become to the Herald what the Calgary Mirror used to be to the Sun; likewise, the Edmonton Sun is going to become to the Journal what the Examiner used to be. It would make financial sense, too, to move the Toronto Sun offices to a combination of the National Post/Hamilton locations.

    Barrie, Canoe and nationalized staff positions will be gutted. Postmedia already has equivalent positions.

    The community papers that still make money, ironically, will probably fare the best. The ones that don't make money or make too little will simply be shuttered.

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  28. Is it that Metroland is smart or is it the management in our Niagara location has not the ability to contend?

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  29. We don't have the details yet, only Postmedia's bankers do, but it's fairly obvious there's going to be a wholesale gutting of Sun Media as early as weeks after the deal goes through.

    PM is saddled with a huge amount of debt, and they've just borrowed a whole bunch more money to buy a newspaper chain that is swimming in debt. They'll close everything they can't sell or run profitably themselves, are unbeholden to Sun Media's management structure or where the presses happen to be now and they're going to need a large amount of cash in a hurry to make payments on their new debt.

    Best case scenario is they HAVE a plan that isn't reflexive and regular cost-cutting and layoffs like PKP. Worst case, the end is coming a little sooner than later, and we all knew an end was coming with Quebecor.

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  30. Seems to be a lot of speculating as to what will happen once PM takes over. Hopefully, the two companies can combine their strengths/knowledge and benefit the industry, and the employees. Sure seems like a lot of business/property was acquired for the purchase price. Doesn't that make for some growth potential, a better future?

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    1. There is no future. Postmedia is owned by a hedge fund. It exists only to get the money of its investors back after Canwest's implosion. Sun Media is going to be carved up like a Christmas turkey.

      Ironically, Quebecor was, on paper, the kind of owner you want: a rich telecom that could write off the dwindling revenues of its newspaper branch. Again, in theory this is desirable. Look at Amazon's CEO buying the Washington Post. That's the only way papers will survive - benign billionaires willing to keep journalism alive, or at least experiment to keep it alive.

      The problem, as we all know, was PKP himself and a general disdain for English media in what is a separatist company.

      As for the Postmedia's plans, I will remind you that after Quebecor fired all their publishers and instituted a 'pillar' system a couple years ago, it took Postmedia about six months to do the same thing. Yes, PM actually took a page from Quebecor. Not exactly a good omen.

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  31. A bit of information from media coverage on the purchase ... 'The combined companies had $1.2 billion in revenue in 2013.' Hmmm. That's quite the 'no future.'

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  32. Uhhh, maybe you've missed the last decade, but at no point was Sun Media losing money. It was making millions. For that matter, so was Canwest and then Postmedia. And yet cut, cut, cut, cut. So pointing out how much this new corporation will make is pointless. It's not a matter of how much. It's a matter of how much more. And it's how it looks to the hedge fund folks who don't look at how much revenue you have generated - they look at how much revenue you have generated compared to the last quarter. Or last year. Trajectory is all that matters. Nevermind the debt they are trying to rid themselves of.

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  33. nice figure...but how much debt do they have? What was the profit? After all profit is what the shareholders want to see. All bottom line. Still nice to know that someone at 333 is reading the blog.

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  34. You know how they always say "karma is a bitch" well for those at 333 that are now shaking in there cubicles...welcome to the real world. For years you have sacrificed those around you, now it's your turn

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  35. No Christmas layoffs this year. Will have to wait for post media to do the dirty job in 2015

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  36. waiting for my Christmas bonus. I asked Santa and he said this would be the year lol

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  37. My Christmas bonus is that I don't work for Stun Media anymore. Life is so much better away from the dog eat dog mentality of those left behind who fear for their jobs and trample over anyone they can get ahead of.

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  38. i have been hearing they may close down some community papers that arent making money or making very little money

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  39. The Toronto Star announced that they are taking down their paywall on April 1/15. To those of us in 'Readerland', this looks like an attempt to snooker The National Post/Postmedia which is increasingly dependent on its digital program. So, how will Postmedia/Paul Godfrey respond to this in order not to have his readership migrate to the Toronto Star? Note: while the readership of the National Post and the Star might be somewhat different, when it comes to 'freebies', for readers, it might be 'any port in a storm'.

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