Like an uncertain bride and groom, Canada’s two biggest newspaper publishers got cold feet and have called off their wedding.
What happened: Postmedia and Nordstar (owner of The Toronto Star) officially ended talks to become one after failing to come to an agreement on the terms of a proposed merger.
Catch-up: The publishing powerhouses sought to combine forces to fend off the “existential threat” facing the greater news industry (a fancy way to say falling readers and ad dollars). Postmedia, in particular, saw the merger as a way to help pay off its $288 million in debt.
- The now-dead deal would have combined Postmedia’s publications with Nordstar’s Metroland Media, with Postmedia shareholders owning a 56% share. A new entity would have been formed to independently manage editorial operations at The Star.
Why it matters: The fact Canada’s two biggest publishers even considered taking such a drastic measure speaks to the dire state of the news media industry in Canada.
- Over 450 Canadian news outlets have closed since 2008, including 65 in just the past two years, many of which were owned by either Postmedia or Nordstar.
- Revenue streams from subcriptions are drying up, with a new report finding that the share of Canadians who pay for online news dropped from 15% to 11% last year.
- Plus there’s that whole Online News Act debacle, which could result in Meta and Google blocking news content from being seen, further killing the flow of ad dollars.
Bottom line: An ailing news industry is bad news for Canadians trying to stay informed in an era of rising misinformation.—QH