Concentration of Newspaper Ownership in Canada: Postmedia & Sun Media

Freedom of Press is one of the essential ingredients for a democracy. While the Freedom of Press continues to be upheld in North American society, the concentration of ownership in newspapers may pose a threat to the transparency and accountability of the news. In Canada, there has been a dramatic shift in media ownership in the last number of years. After the recent acquisition of Sun Media’s English properties by Postmedia, the majority of the daily English newspaper market in Canada is now owned by one company. With such a large restructuring in the newspaper market in Canada, I have begun to question whether democracy will be disrupted by the loss of competition or opposing voices. In this paper, I will first discuss the history of Sun Media, Postmedia, and their merger, and then I will examine how Postmedia’s concentration of ownership may shape the quality of journalism in Canada. Ultimately, I will argue that the lack of competition will lead to less investigative journalism, less accountability, and a loss of diversified voices across Canada.

In order to understand the potential harms of the concentration of ownership in the newspaper market in Canada, it’s first important to understand the background of the companies involved and that details of their merger. Postmedia is a company which arose from the ashes of the collapse of Canwest in 2010; Postmedia acquired many dailies from Canwest including the Ottawa Citizen, Montreal Gazette, Edmonton Journal, Calgary Herald, and Vancouver Sun. Post media’s ownership group was assembled by Paul Godfrey, the CEO of National Post, a national newspaper founded in 1998 by Conrad Black. Starting in 2014, Postmedia began to transition it’s dailies in Ottawa, Montreal, and Calgary to a multi-platform digital subscription based model.

Sun Media first published its flagship newspaper, the Toronto Sun, in 1971 after the demise of a conservative broadsheet called the Toronto Telegram. Many argue that Sun Media was styled after the British populist tabloid journalism model of The Sun in London, UK; The Toronto Sun has been known for sensationalizing the news. It also borrows the controversial Page 3 Girls from The Sun, calling their Canadian version the Sunshine Girls. After success in Toronto, it later launched Sun newspapers in Edmonton, Calgary and Ottawa and acquired numerous properties over the years with multiple changes in ownership. Following a hostile takeover bid by rival Torstar, Quebecor purchased Sun Media in 1991 for $983 million to create the largest press group in Canada.

On April 13th, 2015 the sale of 173 Sun Media publications to Postmedia was finalized for $316 million. This merger means that Postmedia will now own both paid daily newspapers in Calgary, Edmonton and Ottawa, in addition to the two it already owned in Vancouver. Postmedia will now own 51% of the daily English newspaper market and 59% of the market excluding Toronto and Canada’s two national dailies. Outside of Toronto, Postmedia’s next closet competitor is Torstar which has 19% of the English daily market but of which only 6% of its market share is paid.

The concentration of ownership, which resulted from this merger created great debate in the press. After the Competition Bureau approved the merger, Postmedia’s CEO Paul Godfrey stated that he believed the deal wouldn’t have won regulatory approval 10–20 years ago. In speaking with The Globe and Mail he said, “[the merger] likely would have caused a heated debate in the House of Commons, probably resulting in another Royal Commission into the newspaper industry”. The Royal Commission Godfrey referred to, popularly known as the Kent Commission, launched in 1981 to investigate the growing concerns of media ownership concentration in Canada. The Kent Commission recommended that no one be allowed to own more than five newspapers and that each of those would have to be more than 500 km apart. In 1970, the Davey Report was also released recommending the creation of new legislation that would “require the break-up of regional monopolies, such as that of the Irving family in New Brunswick, by prohibiting the ownership of two or more newspapers having 75% or more of the circulation, in one language, in a defined geographical area”. Godfrey later stated that after engaging in conversations with federal and provincial leaders that it was the impact of digital media on the newspaper industry that allowed for such a deal to be made despite historical work to keep the industry from becoming a monopoly. With the advent of websites such as Google, Facebook, Buzzed, and Twitter, newspapers such as Postmedia would not only need to compete with each other for advertising dollars but also the new digital world.

Paul Godfrey is correct that the newspaper industry has been fundamentally altered because of digital media. However, this increasing concentration of newspaper ownership is detrimental to democracy and Canadian society. One could argue that the Internet has provided less concentration of ownership however when it comes to local news, it is still mostly consumed through traditional media, especially rurally and in small cities/towns. This will only increase the political and cultural divide that exists between the urban and rural communities of Canada.

Historically, one may argue that a key benefit of diversified ownership in the newspaper market was that the competition between papers resulting in a push to be first to break a story. Breaking Stories is the second most popular local topic in the news after the weather. Many have argued that it is breaking news is what sells papers on the newsstands. Today, Postmedia not only owns most of the small town newspapers across Canada in which the free market only allows for one daily to exist, but also the majority
of the market in major cities. Postmedia now occupies 77%, 78%, and 79% of the daily newspaper market in Edmonton, Calgary and Ottawa, respectively. Even though Postmedia has said that it will keep separate newsrooms in the 3rd (Calgary), 4th (Ottawa) and 5th (Edmonton) largest cities in Canada, one may predict that competition between them will not be the same.

Beyond paid dailies, the main competition for Postmedia in many of these cities is the Metro, a free daily commuter paper owned by Torstar. Many have argued that these free papers, such as Metro, are an erosion of quality journalism, as it doesn’t encourage longer-form well-researched articles or investigative journalism. In essence, while newspapers once competed against each other for the best and fastest reporting, Postmedia now competes only against itself and Metro, a newspaper not marketed or concerned with quality investigative reporting. Competition between newspapers pushes editors and journalists to take more political risks, to report more comprehensively, and to search out the important stories and report on them quickly. One may argue that without this healthy competition between newsrooms, the Charbonneau Commission may have never happened. All newsrooms in Montreal had an effect in provoking a public inquiry on corruption.

Lack of competition among local newsrooms may also affect accountability among the media. Competing newsrooms often investigate each other for the public’s interest. For example, earlier this year Leslie Roberts of Global TV stepped down after the Toronto Star investigated a conflict of interest involving a PR company Roberts owned. One may question: If you are the only newsroom in town, are you going to investigate yourself? Are you going to point out your own wrongdoings or faults? News media is a public institution that requires the same checks and balances that news media provides for the government. If the newspaper industry becomes completely monopolized, the previous system of checks and balances will be lost.

As the loss of competition, and budgets in newsrooms become smaller and smaller, investigative journalism is often one of the first arms to receive cutbacks. Postmedia has already shifted its major market newspapers to focus more on analysis and less on breaking news. Investigative journalism is a crucial element of a healthy and democratic free press. As mainstream news sources begin to decrease their amount of investigative reporting, some internet-based non-profits have been attempting to fill the void. Canadaland is one website that has managed to find an audience and a sustainable crowd-funding business model. Though efforts are being made, it is unclear whether such replacements for traditional investigative reporting will be able to truly fill the lacuna.

With concentration of ownership of the market comes centralization of its operations. Part of Postmedia’s new strategy has been to centralize its news production and editorial division to Hamilton. Postmedia’s editors who will now operate in Hamilton will be able to decide the content and front page store for papers across the country. Additionally, the content and layout for the national and international news sections are the same across in all papers. This creates a more uniform editorial opinion across the country. Canada is a diverse country with diverse provinces and cities; context and culture varies from province to province. As newspapers become less and less personal and tailored to the cities they serve, one may wonder: will the people begin to opt more and more for citizen journalism and online news sources to find a source that meets their unique needs? With digital media already encroaching on the newspaper’s territory, we may soon see the harm of readers being driven into the arms of the Internet thanks to a national approach to news that ostracizes readers.

In this paper, I have argued that the concentration of ownership of newspapers by Postmedia is a potentially harmful advancement in news media. Historically many efforts were made to protect the newspaper industry from concentration of ownership. However, based likely on the pressure of the digital market, this year Postmedia succeeded at almost acquiring the majority of the newspaper market in Canada. For many years, the push for investigative journalism, for breaking news, and for accountability in journalism has happened because of competition. With the loss of the competition, we may see the face of Canadian journalism change. And further, with the centralization of the newspaper market, provincial and city news, which once represented its diverse communities, has been replaced by a handful of editors deciding what important news is for a whole country. Though the merger of Postmedia and Sun Media may allow for the temporary survival of the newspaper, it is clear that what may have been sacrificed in the merger is the quality of journalism in Canada.

Originally written for the class “JOUR 215: Contemporary News Media” at Concordia University in April, 2015.

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