The Ottawa CitiSun? How Postmedia’s mega-deal plays in two-newspaper cities

The overwhelming response to Monday morning’s announcement that Postmedia News would purchase 175 English-language publications from Quebecor Inc. was an even mix of “Whaa?”, “Holy Heck!” and “Do I still have a job?”

The massive $316-million media merger creates a mega-company that features not just the multi-market National Post newspaper, but dailies and weeklies newspapers in towns across the country and, in several cases, two major newspapers in major urban centres.

In cities such as Edmonton, Calgary and Ottawa, the purchase of Sun-chain newspapers will mean Postmedia owns the local daily, such as the Edmonton Journal, and its Sun-titled opposition. Throw the national papers, the Post and the Globe and Mail, into the mix and company owns three of the four reading options.

(Well, unless you have internet access, in which case there’s an infinite number of reading options – a point both Postmedia and Quebecor said loomed large over the deal.)

With a focus on the newspapers themselves the deal, which must still be approved by the competition bureau, creates an interesting question about what will happen in cities where two newspapers directly compete against one another.

Here is how Reuters describes the fallout from the deal:

Getting a sense of the scope of the deal? Steve Ladurantaye, a former Globe media reporter who now works for Twitter Canada, summarized the deal to mean that Postmedia now owns “all the papers (except Globe and Star).”

Think he’s joking (yes, he is)? Here’s the list of publications changing hands in the sale. It spans from the Gananoque Reporter to the Selkirk Journal to the Calgary Sun and all the way back to the London Free Press. The list is longer than some novels.

There is also the matter of $6- to $10-million of money saved in “synergies,” according to a press release, which hints at money saved by running all the newspapers in conjunction with one another, perhaps including savings from eventually needing fewer journalists.

So what does it really mean for journalism in Canada? More specifically, what does it mean for journalism in the cities that will now find themselves doubly represented by Postmedia newspapers?

According to Postmedia Chief Executive Paul Godfrey, there are no changes imminent.

In a morning press conference, Godfrey said it was “too early” to say whether there would be layoffs, but noted they have no intention of closing any newspapers, especially those in major cities. The Sun chain will continue to run side-by-side with existing Postmedia papers.

"We made a commitment that our plan is to keep newspapers going, we have nothing planned to close anything, and in fact we made a commitment that in the markets that do overlap, we are definitely going to keep them open," Godfrey said.

In short: There will be no Edmonton Sun Journal, no Calgary Herald Sun, no Ottawa CitiSun. The papers will remain together but separate.

Postmedia already operates two newspapers in Vancouver – the Vancouver Sun and The Province – and Godfrey cites the situation as evidence the model can work.

Sean Holman, journalism professor at Mount Royal University, spoke with CBC Radio in Calgary about the fallout and said the merger would “dampen” the rivalry between local newspapers. He cited the Vancouver example, saying the rivalry between the newspapers has been greatly diminished since they came under the same roof.

"I think all Canadians should be troubled by this potential sale. Ultimately I think this will mean three things: I could potentially mean less press freedom in this country; secondly, it could mean fewer journalists in this country covering the issues that matter to Canadians," Holman said.

"Third, it will also likely mean less press criticism in this country. If there are only a limited number of employers out there for journalists who are interested in working for newspapers, then ultimately those journalists will be very, very reluctant to criticize what is one of the few major employers for them in the country."

The federal government has considered the issue of media concentration in the past.

In 1970, a Senate committee released a document on mass media known as the Davey Report, which hinted, in a negative tone, that “control of the media is passing into fewer and fewer hands, and that experts agree that this trend is likely to continue and perhaps accelerate.”

The 1981 Kent Commission suggested that ownership concentration was “clearly and directly contrary to the public interest.”

TorStar, which owns the Toronto Star, attempted to purchase Sun Media, owner of the Toronto Sun, in 1998. The deal was avoided when Quebecor stepped in and purchased the chain. But a competition bureau spokesperson was quote at the time saying, “The test for us is whether a merger will substantially lessen competition.”

The Competition Bureau of Canada is expected to take several to review the sale, during which time they will surely look at cities like Calgary and Ottawa, where formerly bitter rival newspapers will come under one roof. The statement released on Monday was far more nuanced than the one offered near 20 years earlier.

“The Competition Bureau will review Postmedia’s proposed acquisition of QMI’s English-language media assets, including print newspapers and digital properties,” said John Pecman, Canada’s Commissioner of Competition.

“While media ownership concentration can raise other public interest concerns, under the Competition Act, the Bureau’s mandate is to review mergers exclusively to determine whether they are likely to result in a substantial lessening or prevention of competition.”

Exactly how much competition can there be between two newspapers that are in the same family? As anyone with a brother or sister can attest – familial ties do not negate competitiveness.

But they don’t ensure it either.