Postmedia Network announced Tuesday that it is in talks for a merger with Nordstar, the company that owns the Toronto Star. The move would consolidate an even larger share of Canadian news media under the control of a single corporate entity, prompting concern among journalists.
“In light of unusual trading activity, Postmedia Network Canada Corp. ('Postmedia') today confirmed that Nordstar Capital LP ('Nordstar'), owner of Metroland Media Group and the Toronto Star, and Postmedia have entered into non-binding discussions to consider a combination of Postmedia, together with the Metroland newspapers and certain operational assets of the Toronto Star, through a potential merger transaction.”
According to the statement, Nordstar would have 50 per cent control and 44 per cent economic interest in the new as-yet-unnamed merged entity, and Postmedia shareholders would have 50 per cent control and 56 per cent economic interest.
“Jordan Bitove, Publisher of the Toronto Star and owner of Nordstar, would be Chairman of the merged entity and Andrew MacLeod, CEO of Postmedia, would be CEO,” the statement said. It added:
“The Toronto Star would maintain its editorial independence from the merged entity through the incorporation of a new company, Toronto Star Inc., which would manage editorial operations of the Toronto Star.”
MacLeod said: “The core rationale for the proposed merger is to create a new entity with reduced debt, national digital scale to compete with the global technology giants and economies of scale in the business mode.”
Bitove, meanwhile, suggested that the move “will strengthen our democracy and protect the fabric of our country.”
As noted by The Canadian Press, "The Competition Bureau will likely have to sign off on this deal amid an industry that’s been shrinking and consolidating for years."
But it's doubtful such an investigation would prevent the potential merger, as critics have stated that Canada's competition laws are weak, outdated and ineffective.
CP noted: "In November 2017, Torstar [now owned by Nordstar] and Postmedia swapped 41 publications, mainly in Ontario, with plans to stop publishing most of them. The deal resulted in the cutting of 291 jobs."
"The transaction led to an investigation by the Competition Bureau, which after several years said it wouldn’t take further action."
According to Newsmedia Canada, Postmedia currently owns 37 Canadian daily newspapers, while Nordstar owns seven. Combined, this would represent 57 per cent of all Canadian daily newspaper titles. The Toronto Star, Nordstar’s flagship newspaper, has the largest print newspaper circulation in Canada.
The majority of Postmedia’s shares are currently owned by Chatham Asset Management, an American hedge fund.
The Canadian Press reported in January that Postmedia planned to lay off 11 per cent of its editorial staff due to “economic contraction,” following a years-long bleed of journalists from the company.
Meanwhile, Postmedia executives have in recent years collectively enjoyed multi-million dollar salaries and bonuses. In the 2021 fiscal year, the company’s top five highest-paid executives received a combined total of nearly $2.6 million in bonuses, according to the company's filings. Bonuses paid to executives for the 2022 fiscal year shrank considerably, however, with MacLeod being the sole recipient of a $150,800 payment.
In July 2022, Postmedia appointed Jamie Iriving, the grandson of New Brunswick billionaire and media monopolist James K. Irving, to replace Paul Godfrey as the company's executive chair. However, Irving resigned from that position earlier this month, with lead director Peter Sharpe assuming the role on an interim basis.
Postmedia’s news publications are known for having right-wing editorial stances, with the corporation’s brands endorsing the Conservative Party in every federal election since the company’s founding in 2010, and publishing a long roster of far-right opinion columnists.
Nordstar took over Torstar (the company that owns the Toronto Star) in the spring of 2020. It was pointed out at the time that Nordstar’s owners, Jordan Bitove and Paul Rivett, had made extensive donations to conservative politicians and parties (Rivett departed the company in the fall of 2022). This raised eyebrows as the Star is historically known for having a liberal editorial orientation, consistent with the Atkinson Principles. In a statement at the time of the takeover, Nordstar made assurances about maintaining the Star’s “commitment to progressive positions.”
However, this was called into question following the paper’s coverage of the 2022 Ontario election, which concluded with what critics regarded as a puff piece applauding Premier Doug Ford’s campaign strategy.
The news of Postmedia’s potential merger with Nordstar prompted concern and anger from journalists on Twitter.
The Globe and Mail’s economics reporter Matt Lundy pointed out that Postmedia’s share prices bounced early in the day on Tuesday. He tweeted: “I'm sure the 50% bounce in Postmedia shares today, before this press release went out, will be thoroughly investigated by our securities regulators.”
Ricochet’s managing editor Andrea Houston wrote: “This is the worst possible news. I feel sick to my stomach.”
Writer Jeet Heer pointed out: “Virtually all of Canadian private media is going to be owned by right-wingers.”
Ricochet co-founder Ethan Cox described the potential merger as a “disaster.”
Similarly, independent journalist and Maple contributor Emma Arkell wrote: “Gaze into the dark abyss that is the future of Canadian news media.”