Potential merger between Postmedia Network, Nordstar Capital

A possible merger is in the works between two major companies that own the majority of daily newspapers across Canada. There are concerns one company could soon have almost total control.

Postmedia Network Canada has confirmed it’s in talks to merge with Nordstar Capital, the owner of Metroland Media Group and the Toronto Star.

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The two publishers reportedly claim it will help save the newspaper industry in Canada, which has been losing advertising dollars for years.

Many are concerned a deal means Canadians will have mainly one voice when it comes to newspapers across the country.

Toronto Metropolitan University journalism professor April Lindgren is watching what happens very closely, “to the extent that the controlling proprietor wants to dictate what the editorial positions are of the news organization, in terms of who they endorse during an election, that is obviously a risk.”

Postmedia says the deal would ensure the Toronto Star maintains editorial independence.
There was no specific mention of smaller papers, like the Hamilton Spectator.

At a news conference on Wednesday in Mississauga, Prime Minister Justin Trudeau acknowledged concerns.

“This is a proposal that is carefully being looked at and analyzed. I know the Competition Bureau and others are going to be taking a look at it because this is a significant step,” Trudeau said.

Postmedia owns publications such as the National Post. They have been struggling financially for years, and have a net loss of $20.8 million in the latest quarterly results. They are also $275 million in debt.

“We know that the majority of post media is owned by a New Jersey based hedge fund and the hedge fund approach to newspapers is to basically suck as much revenue out of them as possible and invest as little as possible in the production of news,” Lindgren said.

Postmedia provided a link to a statement on its Twitter account, saying in part that this negotiation is currently in the form of a nonbinding letter of intent, and they do not plan to disclose any further developments.

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