PHOTOS: The Edmonton Journal Building at 101st Street and MacDonald Drive in downtown Edmonton. It remains to be seen who will be Upstairs, and who will be Downstairs, when the staff of the Sun joins the staff of the Journal at the same address in the fall. Below: Journal Editor-in-Chief Margo Goodhand, Postmedia President and Chief Executive Paul Godfrey and a tarnished relic of the day not so long ago when Canadian newspapers were effortlessly profitable.
Now that they have been Postmedia employees for all of four months, the editorial and advertising staff of the Edmonton Sun will move this fall into the Edmonton Journal’s building on 101st Street in downtown Edmonton.
But fear not, promises Edmonton Journal Editor-in-Chief Margo Goodhand, when the Sun refugees arrive from their down-at-heels east side cubicle farm on a rather déclassé stretch of 50th Street, probably in September, the papers will each have their own newsroom, as well as “distinct print and digital brands.”
While reporters and editors from the Sun and Journal will not yet have to share space – sparing such presumably incompatible columnists as the Journal’s Sheila Pratt and the Sun’s Lorne Gunter that particular discomfort, thank goodness – their colleagues in advertising will. “We are amalgamating our local sales teams in shared markets such as Edmonton,” Ms. Goodhand explained in an email, “so that our reps can sell multi-platform programs across all of our local brands.”
The Sun’s brand, for those of you who don’t follow such things, is that of a scruffy little right wing tabloid newspaper with a deceptively flashy website. The Journal’s is that of a slightly stuffy and serious right wing broadsheet newspaper, with a dowdy website stamped from an unimaginative and out-of-date Postmedia template. It will be updated soon from another corporate template already in use by the Calgary Herald, Ottawa Citizen and Montreal Gazette.
The branding distinction is similar in all markets where Sun Media tabs used to compete with Postmedia broadsheets, which over the years have been owned by such fabled media companies as Canwest, Hollinger and Southam.
When Postmedia’s plan to purchase Sun Media’s English-language operations surfaced in late 2014, fears were widely expressed that amalgamation of all operations, including news staffs, was bound to follow.
The assumption in the business at the time seemed to be that jobs on the “serious” Postmedia papers were safe while those on the insouciant Sun tabs were not – although I was not so sure of that then, and I am not so sure of it now. Indeed, it will be interesting to observe, both in the Journal Building and in the corporation, who emerges as the Upstairs part of this mismatched coupling, and who is Downstairs.
Certainly there are unconfirmed rumours that, before too long, the two Edmonton papers’ sports, entertainment and photojournalism departments will be merged.
At the time the acquisition plan was announced, the giant Toronto-based media corporation promised that both Postmedia and Sun newspapers would continue to operate independently of one another in markets where they have been competing directly.
Postmedia President and CEO Paul Godfrey reiterated that pledge in March after the Competition Bureau rubber-stamped the $316-million acquisition of Sun daily newspapers in Edmonton, Calgary, Toronto, Winnipeg and Ottawa, as well as about 170 additional digital and print publications previously owned by Quebecor Inc.
Sure, there would be some “synergies.” Indeed, Postmedia indicated in October it expected to find $6 to $10 million in savings, mostly through unidentified shared services. But Postmedia tried hard to give the impression all would be well as the 2,400 Sun Media employees joined their 2,800 counterparts at Postmedia.
Whether or not the acquisition will eventually result in the intended business success, it certainly concentrated English Canada’s major print media operations in a few hands. After the dust settled, the Globe and Mail, the Toronto Star and the Winnipeg Free Press were the only major English-language newspapers in Canada not controlled by Postmedia.
Whatever Postmedia’s long-term plans were for ensuring the independence of its newsrooms from one another, company executives obviously didn’t intend to ensure their independence from head office in Toronto – as the Journal’s editorial staff discovered to its shock and dismay just before the May 5 Alberta election not long after the Sun deal was finalized.
On May 3 and 4, word leaked out via such sources as former Sun Media commentator Ezra Levant and the Canadaland website that all four Postmedia papers had been instructed by head office in Toronto to write editorials backing the hapless and unpopular Prentice government. Journal insiders had expected the paper not to recommend anyone.
Mr. Levant, God bless him, accurately dismissed the editorials as an act of impersonation. “It was a Toronto editorial being passed off as a local view,” he wrote in a Tweet. “It was a trick.”
A substantial number of Journal sluggos seemed to agree. Columnist Paula Simons penned a furious “Twitter essay” assailing the editorial’s conclusion in 140-character bursts.
The embarrassing task of explaining the reasoning for the editorial fell to Ms. Goodhand, who wrote: “Prior to my arrival here, the Journal apparently chose not to endorse in the provincial election of 2012. This year, we were asked to endorse. The owners of the Journal made that call, and the editorial was written by a member of the editorial board. It was reviewed and edited by senior Journal editors, and then published as is. Editorials are always expected to reflect the opinions of the owner/publisher …”
Well, the newspaper business nowadays is not doing so well in many ways, not just in terms of editorial independence. The surprisingly low-cost purchase of the Sun newspapers was designed somehow to stanch the flow of red ink at Postmedia, owned 35 per cent by a U.S. hedge fund called GoldenTree Asset Management.
Early this year, Toronto Star business columnist David Olive termed the notion that two financial troubled newspaper chains could be melded into a single profitable one “magical thinking.”
After grimly outlining Postmedia’s “abysmal financial condition,” Mr. Olive concluded, “this is a company with rising costs that are to be financed from declining revenues – a business model that would impress only someone who believes elephants can fly.”
Not much seems to have changed since then. In the third quarter of 2015, which ended on May 31, the losses continued, with the company reporting net losses of $140.8 million or 84 cents a share on revenue of $205.1 million, compared with net losses of $20.6 million or 51 cents a share on revenue of $170.9 million in the same period a year earlier.
In the first nine months of 2015, Postmedia reported net losses of $209.3 million or $2.51 per share on revenue of $520.1 million, compared with net losses of $57.7 million or $1.43 per share on revenue of $527.5 million in the same period a year earlier.
Which makes speculation unavoidable that, notwithstanding the move of the Sun staff to the Journal’s nicely located offices downtown, the valuable land on which the building sits may soon have to be sold off as one of Postmedia’s few assets not losing value as time passes.
Back in 2011, Postmedia unloaded three small Vancouver Island dailies, the Victoria Times Colonist, Nanaimo Daily News and Alberni Valley Times, plus 20 community newspapers for $85 million to Glacier Media Inc. The money was to be used for “debt repayment.”
On this topic, Ms. Goodhand told me only that “we have sold our former production facility, and our immediate plan is focused on moving the Edmonton Sun team from its currently leased office space into the Journal building.”
The Journal sold its Eastgate printing plant, located a couple of blocks from the soon-to-close Sun offices, two years ago last week. Production was contracted out to the St. Albert Gazette, which, as it happens, is owned 50 per cent by Glacier Media.
NOTE: I am reliably informed Postmedia has sold the building and leases it back, but not the land on which it sits or the air rights above it. Go figure! This post has been amended to reflect this. This post also appears on Rabble.ca.