Category Archives: Canwest

Postmedia a potential takeover target: RBC


While Postmedia’s daily newspaper business continues to face strong headwinds from free dailies and growing online migration, its assets and mix of shareholders make it a potential takeover target, according to a report by RBC Capital Markets.

“Although the timing and/or likelihood of a potential transaction are highly uncertain, we believe investors could realize a takeout premium,” analyst Drew McReynolds said in a note to clients. “Potential strategic buyers could include Torstar, Woodbridge, Gesca and Transcontinental given the opportunities for cost synergies (i.e., corporate, procurement, distribution, content sharing, production etc.), particularly in adjacent and/or overlapping geographies.”

Postmedia is the former newspaper division of Canwest, and includes titles such as the National Post and theMontreal Gazette. Postmedia’s secured creditors took control of the company after Canwest filed for bankruptcy in 2010.

Torstar has previously shown interest in Postmedia—submitting a bid in April 2010 when Canwest LP put itself up for sale. The bid was backed by Fairfax Financial Holdings, which holds an investment in Torstar.

“Although we do not believe a major acquisition is a current priority for Torstar, we view Torstar as a logical buyer for Postmedia Network should priorities change and/or the right opportunity arise,” McReynolds said. “We note that with the completed sale of CTVglobemedia, Torstar is in a much stronger financial position than the company was in April 2010.”

One major stumbling block to a bid by Torstar is the valuation gap between the two companies. RBC says Torstar is currently trading at EV/EBITDA multiple of 4.1 versus Postmedia’s 6.6 valuation.

RBC initiated its coverage on Postmedia on Wednesday with an “underperform” rating and a $14 price target.

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New owners of Canwest papers targeting business offices after slashing editorial, advertising jobs


Postmedia Network, having just slashed scores of jobs in editorial and advertising departments across the former Canwest chain, is now turning its sights on the newspapers’ business offices.

The new company’s owners plan to begin centralizing the finance departments’ functions in Toronto and Winnipeg by the end of January. Staff reductions will be accomplished through buyouts and layoffs.

While Postmedia says it does not envision departmental closures, it is unknown how many business office jobs will be lost across the chain, which includes the flagship National Post, Calgary Herald, Edmonton Journal, Ottawa Citizen, Montreal Gazette, Vancouver Sun and Province, and the Victoria Times-Colonist.

Cuts in a newspaper’s business office will undoubtedly reduce local service and mean fewer connections between the paper and the people it serves in the community.

 “While any staff cuts are lamentable, we are particularly concerned about the editorial jobs that have been eliminated,” says Arnold Amber, Director of CWA Canada, which has members at five of the former Canwest papers. “Cutting reporters, photographers and editors certainly does not improve the quality of a newspaper.”

Although Postmedia is justifying the cuts by saying it wants to focus on a move to digital media, getting rid of experienced journalists is a recipe for mediocrity, says Amber.

“Loyal readers of these newspapers, advertisers and business customers expect high-quality local service and news coverage. If all of that is diminished, it does not bode well for the future of that community’s newspaper,” he notes.

The cuts have been swift and deep since Postmedia’s new fiscal year began on Sept. 1. CEO Paul Godfrey, while acknowledging that nearly all of the 11 Canwest dailies are profitable, is looking to recover $40 million to help pay down debt incurred when Postmedia bought the chain from Canwest.

CWA Canada has determined that Postmedia has shed at least 228 employees, including managers, across the chain. While it is difficult to obtain precise figures, the union estimates there have been about 100 cuts in advertising and at least 70 in editorial. Overall, CWA Canada has lost about 50 members as a result of the cuts.

Last year, Canwest chopped almost 800 jobs or 13 per cent of its workforce, while struggling under creditor protection, leaving Postmedia to inherit about 5,000 employees.

The most recent cuts were achieved by either buyouts or layoffs, with the former dominating at unionized newspapers and the latter at non-union papers.

One source told CWA Canada that all the cuts at the non-unionized Calgary Herald were layoffs. “Nobody was offered a buyout in the Herald newsroom; they were just laid off. Management announced that 35 jobs would be chopped, including eight in the newsroom.” The source adds: “The deskers (copy editors) feel like the sword of Damocles is hanging over them because management classifies them as ‘non-content providers’ and considers them expendable.”

This suggests that Postmedia is prepared to have its reporters and correspondents publish directly to the Web, without an experienced copy editor in between, ensuring an article’s accuracy, balance and, in many cases, legally acceptable reportage.

The Cuts
Calgary Herald
Jobs cut: 35 layoffs / 8 editorial positionsEdmonton Journal
Jobs cut: 20 (2 layoffs) / 8 editorial positionsMontreal Gazette
Jobs cut: 27 (23 union) / 10 editorial positions (includes 2 retirements)Ottawa Citizen
Jobs cut: 42 (17 union) / 10 editorial positions Regina Leader-Post
Jobs cut: 18 (3 layoffs) / 3 editorial positions
Saskatoon StarPhoenix
Jobs cut: 9 (unconfirmed)Vancouver Sun
The Province

Jobs cut: 50 (48 union) / 20 editorial positionsVictoria Times-Colonist
Jobs cut: 12 (12 union) 
2 editorial positionsWindsor Star
Jobs cut: 8 / 7 editorial positions
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