Anyone interested in newspaper economics may want to read two recent articles about publishers with extensive B.C. operations.
The Globe and Mail's James Bradshaw has highlighted a serious financial challenge facing Postmedia Network Canada Corp., which owns the Vancouver Sun, Province, and 24 hours newspapers.
Postmedia has completed a $316-million purchase of most of the Sun newspaper chain from Quebecor. It's left Postmedia with a $652-million debt as revenue continues falling at its metropolitan daily papers.
"Now, Postmedia has reached a pivotal moment as it looks to refinance its steeply priced debt, on which it pays sky-high interest rates of 8.25 to 12.5 per cent and which has cost the company more than $60-million annually in interest payments," Bradshaw wrote.
Much of the rest of Bradshaw's article outlines how Postmedia Network Canada ended up in such a predicament.
Meanwhile, former Victoria Times Colonist publisher Paul Willocks has written a provocative blog post about the future of Glacier Media Group. It owns Business in Vancouver, the Times Colonist, and community papers in many Lower Mainland municipalities, including Vancouver, Richmond, Delta, Burnaby, New Westminster, and North Vancouver.
Willcocks presented a plausible explanation for how former Hollinger executive David Radler (also a former publisher of the Vancouver Sun and Province) could end up owning the Times Colonist, which is the only daily paper in the provincial capital.
Glacier's quarterly report notes that community papers continue to provide cash flow and scale. But the company has revealed that it's transforming itself to function "on a narrower spectrum of operating sectors in order to deploy resources and capital in areas where long-term growth opportunities can best be realized".
Willcocks pointed out that Glacier's revenue from newspapers declined by 9.8 percent in the last quarter, but these publications still provide nearly two-thirds of overall revenues. And he expects Glacier to zero in on other areas that provide greater profit margins in the future.
"My stints as publisher in Peterborough and Victoria came as the Thomson Corporation made one last stab at bringing growth to its newspapers in Canada and the U.S.," Willococks wrote in his concluding paragraph. "It decided after four or five years of effort, that the future was bleak. It sold the newspapers and invested in high-value information services. Glacier is taking the same route."
Glacier has recently done deals with another large B.C.-based publisher, Black Press, giving Glacier an English-language community-newspaper monopoly in the western section of the Lower Mainland.
Black Press took over papers formerly owned by Glacier in the eastern part of the Lower Mainland as well as in Chilliwack and Abbotsford.
Following these transactions, Glacier closed the 83-year-old Richmond Review while continuing to operate the Richmond News.