The collapse of a merger between Toronto Star owner, Nordstar, and Postmedia was applauded by what appeared to be the consensus among journalists commenting on social media.
It would be like putting cats and dogs in the same pen.
It was on Monday that the two companies each tossed in the towel, announcing the two media rivals could not agree on the terms of the merger, heightened by the regulatory and financial uncertainty surrounding the deal.
“These are challenging times for media companies, but we intend to keep working hard to give Canadians the news they need to stay informed, which is essential to our communities and to the functioning of our democracy,” Nordstar owner Jordan Bitove said in a press release.
Nordstar Capital owns Metroland Media, as well as the Toronto Star, while Postmedia owns the National Post, plus the Sun Media newspapers, which include the Toronto Sun and its affiliates.
Both have financial troubles, and a merger was thought by the newspapers’ executives to be the answer.
As Postmedia president and CEO Andrew MacLeod put it, ”The need for creative solutions and foundational transformation in our industry remains. Our continued focus is on protecting and ensuring Canadians’ access to reliable information.”
“By levelling the playing field with the tech giants and creating a healthy ecosystem, we can ensure that the media industry and journalism remain vibrant, diverse and resilient in Canada.”
The news of the breakup comes less than two weeks after Nordstar and Postmedia issued a press release describing the potential merger that would see NordStar and Postmedia each have a 50% voting stake in a new, unnamed merged company which would control the combined assets of both companies.
A separate company called Toronto Star Inc. would have been created for the editorial assets of the Toronto Star with the goal of ensuring editorial independence. NordStar would have had a 65% stake in Toronto Star Inc. and Bitove would have remained publisher.
It would be a fight to see whose scavengers were the most deft.
Postmedia and the Toronto Star have never, ever been on the same page. Postmedia, with its stable of Sun newspapers, is decidedly right wing while the Toronto Star is wholly progressive.
It would be like trying to mix oil and water.
Now, I first started working for the Toronto Sun in 1974, and I can’t tell you how many times I have been fired and then re-hired as a freelancer, each time for a lesser amount of compensation and with no benefits or union protection whatsoever.
The last was mid-summer of 2022 when I was told the freelance budget—which was then comparative pennies—had to be cut, so out the door I went. This time for good.
So much for 50 years of loyalty.
Stretching assets have left the Toronto Sun, and the Suns in Edmonton, Calgary, Winnipeg and Ottawa, thin in page numbers to the point of emaciation.
Postmedia is deeply in debt, the Toronto Star not so much.
According to its most recent financial statements, released in early April, Postmedia has $261 million in long-term debt to Chatham Asset Management, a New Jersey-based hedge fund. In the six months leading up to Feb. 28, the company lost $36.7 million compared to a net loss of $26.5 million in the same period last year.
Nordstar executives were concerned with Postmedia’s debt structure, even though Postmedia’s lenders were planning to swap the majority of the company’s loans for equity.
The bone-picking, it can be assumed, would come later.
But it will come.
