Alberta Politics
When will the lights go out at Torstar? The Star Building at One Yonge Street, Toronto … (Photo: David J. Climenhaga).

Casino capitalism comes to newspapers and it sure looks like the dealin’s done!

Posted on March 02, 2021, 2:16 am
8 mins

Newspapering was a great career, fun and pretty well paid too, once upon a time. I’m pretty sure, though, that the whole daily newspaper thing is really closing in on the end of the line now. 

Evidence? 

Tom Kent, who led the Royal Commission on Newspapers in 1980 and 1981 (Photo: Originator unknown).

The day before yesterday, the Tyee reported that both the Torstar Corp. and Postmedia Inc. newspaper chains knew they would simultaneously shut down 36 of the 41 newspapers they were about to swap in 2019 when they cooked up a deal to divide up parts of Canada into largely competition-free zones. Torstar’s free Star Metro newspapers in Edmonton and Calgary were shut down as part of that arrangement.

This is supposedly illegal under the Competition Act. Agreeing to cut up markets to “lessen or eliminate the production or supply of the product,” the Tyee reminded us, is literally a crime that can net fines of up to $25 million and prison terms for conspirators of up to 14 years.

But, ho hum, who cares about that stuff? Not the Canadian newspaper industry, what’s left of it, and apparently with good reason. 

At any rate, it turns out Torstar and Postmedia execs were exchanging emails discussing “who will terminate whose staff” and which corporation would make the “closure announcements” once the deal was done and their employees were sent packing. 

The emails weren’t made public until Feb. 11, more than a month after the Competition Bureau announced it was pulling the plug on its investigation on grounds that included a lack of evidence there was any deal to reduce the supply of a product or service. 

Huh?

On Feb. 11 the Competition Bureau unsealed some of the documents used in its investigation, pretty well putting paid to claims that neither company knew the other side was about to close newspapers. 

The blogger’s well-thumbed copy of the 1981 report of the Royal Commission on Newspapers (Photo: David J. Climenhaga).

But Canada’s failure to enforce competition law, while hardly unexpected, isn’t at the root of the problems of the newspaper industry – whose executives, including those at Torstar and Postmedia, would like you to think it’s all about Internet social media companies stealing their stories and a lack of federal subsidies for their moribund operations. 

Concentration of ownership, which usually makes the kind of mischief Torstar and Postmedia seem to have gotten up to unnecessary, is where the decline started. By the time the Internet came along, there wasn’t much point paying for most Canadian newspapers since they all carried the same stories anyway. Local news? You could pretty well forget it. 

Most readers, apparently including the authors of the skimpy coverage of the Torstar-Postmedia deal, seem to have forgotten that in 1980 it took the similar deaths of only two good newspapers to launch a Royal Commission into the concentration of ownership in the newspaper business and what to do about it.

The Royal Commission on Newspapers headed by Thomas Worral Kent, once the editor of the Winnipeg Free Press and later a senior advisor to prime minister Lester B. Pearson, started with the shocking closings in August 1980 of the respected Winnipeg Tribune and Ottawa Journal, which had been around for 90 and 95 years respectively.

But then, those were days when newspapers still made a contribution to democracy and Canadians who paid serious attention were worried about concentration of media ownership.

Joseph Atkinson, the upright publisher of the Toronto Star who died in 1948, must be spinning like a roulette wheel in his grave (Photo: City of Toronto Archives, Public Domain).

A year later, when the “Kent Commission” reported, it made recommendations that could have saved the Canadian newspaper industry from the dire straits in which it now finds itself, which might have kept newspapers viable when the Internet came along. 

These included legislated tax breaks for local content, tight rules for ownership to ensure papers remained in local hands, and mechanisms to guarantee communities had a stake in the operations of their local media.

They were all ignored. Newspaper owners, who imagined the gravy train would never end, wanted none of it. They got their way.

Fast forward to 2021 and the end seems nigh. It’s a pity, but it’s hard to feel much sympathy, except perhaps for the poor taxpayers who are being called upon to bail these clowns out, and in the name of good journalism, no less. 

After all, the great minds of the newspaper business rolled the dice and now they’ve come up snake eyes. 

Speaking of which, yesterday we learned that Torstar has another plan to save its sorry corporate hide. 

They’d like to open an online casino.

One imagines the shrewd and upright Joseph Atkinson, the poor orphan who grew up to be a social activist and publisher of the Toronto Star, must be spinning in his grave like a roulette wheel. 

“As an Ontario-based media business and trusted brand for more than 128 years, we believe Torstar will provide a unique and responsible gaming brand that creates new jobs, offers growth for the Ontario economy, and generates new tax revenue to help support important programs in our province,” someone called a chief corporate development officer said yesterday in a press release masquerading as news. 

“Doing this as part of Torstar will help support the growth and expansion of quality community-based journalism,” said one of the corporation’s new owners, tongue presumably firmly in cheek. 

Words fail. This is not a good bet.

Indeed, if you have any money left in newspapers, this would be an excellent moment to take the late Kenny Rogers’ advice and run! 

12 Comments to: Casino capitalism comes to newspapers and it sure looks like the dealin’s done!

  1. tom in Ontario

    March 2nd, 2021

    Item in my Postmedia morning paper February 27.
    “Subscribers in print, online and via the ePaper are now eligible for the new federal Digital News Tax credit. You can claim on your personal income tax and benefits return for the years 2020 to 2024.”
    For the next four years the federal government will pay me for being told by bedraggled right wingers what to think and how to think it. Is Canada a great country or what?

    Reply
    • GregH

      March 2nd, 2021

      Because the US hedge fund that owns 66% of Postmedia needs the money. This is insane.

      Reply
  2. ronmac

    March 2nd, 2021

    Also spinning in their graves are Roy Thomson and his son Ken. There was a time when the word newspaper and Thomson were synonymous. By the late 1970’s the Thomson chain owned most of the local newspapers in Canada plus a staple of papers in the UK and US. Notorious penny pinchers, they succeeded in turning their newspapers into bland spreadsheets before selling them off in 2003. By the time Ken died in 2006 he was worth nearly $20 billion and considered the richest man in Canada and ninth richest in the world.

    It may be the printing of newspapers has become a thing of the past.

    Reply
  3. Abs

    March 2nd, 2021

    I imagine they will be in direct competition with governments for that lucrative slice of the online casino pie. Will they dare to ask for government handouts now?

    Next on the news media agenda: pot shops, boutique spirits distilleries…so many possibilities, so many governments to grift.
    So many cheques. So few balances.

    Looks like independent news blogs are all we have left to defend democracy now…and Twitter spoof satire accounts.

    Reply
  4. Doug

    March 2nd, 2021

    So a website that advocates unionization and ownership by public monopolies is concerned about lack of competition?

    Reply
    • Scotty on Denman

      March 3rd, 2021

      What do unionization and public monopolies have to do with private enterprises stifling competition?
      Unions and public monopolies (which, BTW, concern only large, essential infrastructure like roads, hydro dams, hospitals, schools, &c) make it easier for private enterprises to compete and profit.

      Reply
      • Doug

        March 3rd, 2021

        Unions and public monopolies stifle competition, which in turn discourages innovation. Public sector unions, which exist largely within public monopolies, compound the problem.

        Reply
  5. Dave

    March 2nd, 2021

    A casino to keep a newspaper afloat, well that is a bit surprising.

    I agree the problems started with concentration of ownership. Canada’s laws on monopoly and market dominance are mostly ignored these days and have been for the last 30 years or so, by most political leaders and bureaucrats alike. Yes, occasionally some opposition politician or bureaucrat makes threatening noises but then everyone soon mostly goes back to doing not much of anything about it. With the concentrations of ownership and or control in many industries including media, telecoms, banking and airlines, these rules are kind of a joke at this point – the not so free market.

    So, I suppose it is not surprising that we ended up with a diminishing number of national media companies owning almost all the newspapers in the country. Local coverage was probably an easy thing to cut, as who in the Toronto head office really cared what was going on in some community in far off Edmonton or Calgary. You can probably get more news about your local community on Facebook or other online sources now, so is it any wonder readers eventually figured that out and stopped paying for an incredibly shrinking daily paper you could almost see through now.

    Will the casino help the Star? Good luck.

    Reply
    • jerrymacgp

      March 3rd, 2021

      Agreed. One of the few thing the United States has done right over its history is crack down on monopolies & “trusts”. Their government has agencies with the teeth to break up private-sector monopolies, and the very existence of a monopoly is enough to take action: no need to “prove” harm to consumers.

      Meanwhile, Canada has the toothless Competition Bureau, which does nothing to ensure competition. That said, there are markets in which Canada is simply too small & underpopulated a place for genuine competition; these are where we need either Crown Corporations or regulated private monopoly providers — like public utilities.

      Newspapers are not such a market & the Competition Bureau should just simply order the breakup of Postmedia & Torstar — but that isn’t gonna happen (I’m not even all that sure it has that authority).

      Reply
  6. pogo

    March 2nd, 2021

    You know? There comes a time when the screws turn so tight you just have to accept it and move on hoping for.. https://youtu.be/SiSFZBDAH9Y

    Reply
  7. Scotty on Denman

    March 3rd, 2021

    Covid sure has illustrated how “local” would have saved us a lot of trouble.

    Reply
  8. Anonymous

    March 3rd, 2021

    The Conservatives seem to control Postmedia. This cannot be any surprise.

    Reply

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