Postmedia’s PNC-B-T plans to buy Atlantic Canada’s largest newspaper chain signals the end of an era for independent newspapers in the region, which some observers say will further diminish the state of local journalism.
Postmedia Network Inc., which owns publications including the National Post, Vancouver Sun and Ottawa Citizen, announced plans on Friday to buy businesses belonging to two insolvent companies, SaltWire Network Inc. and the Halifax Herald Ltd.
The Toronto-based company says it wants to complete the acquisition by Aug. 26. The deal, however, is still subject to unspecified conditions regarding its unionized workers.
No financial details were disclosed. Postmedia declined an interview but provided a statement on behalf of president and chief executive Andrew MacLeod.
The company said an acquisition will ensure “reliable and high-quality local news” continues to be available to communities on the East Coast.
“SaltWire filed for [protection from its creditors] after years of financial difficulties, underscoring that its current operational model is unsustainable,” he said in the statement.
“In order to save critical journalism jobs, we will need the support of the relevant unions to help construct a viable business model.”
SaltWire owns daily newspapers in Nova Scotia, PEI and Newfoundland, including the Cape Breton Post in Sydney, N.S., The Guardian in Charlottetown and The Telegram in St. John’s, as well as weekly papers and several digital publications.
The Halifax Herald Ltd. owns The Chronicle Herald, the Halifax-based daily newspaper that was founded 150 years ago and owned for much of that time by the Dennis family.
“I was not always a fan of the newspaper, but I was a fan of the fact that it was independent, local and ran on its way of telling stories,” said Halifax journalist and author Stephen Kimber about The Chronicle Herald.
Mr. Kimber said it’s encouraging that Postmedia wants to keep the newspapers going, but he worried about their future viability.
“Local journalism will probably take a backseat to profitability or at least to the ability of Postmedia, owned by a hedge fund in the United States, to sell off bits and pieces of papers’ assets to try and get their money back,” he said.
Tim Bousquet, founder of the independent online publication the Halifax Examiner, said he expects job cuts, probably entire papers discontinued and a more conservative political shift in the opinion sections. “The Halifax Examiner should not be the only independent news source in Halifax,” he said.
Together, the two Nova Scotia companies employ about 800 independent contractors and 390 staff, including about 100 unionized positions.
Willy Palov, president of the Halifax Typographical Union (CWA 30130), said he’s still awaiting details on the proposed terms, but is pleased a buyer stepped up.
“Journalists and workers at the paper are hoping the company will invest in quality news coverage that serves the community and keeps readers informed about what is going on in their communities,” he wrote in a statement to The Globe and Mail.
Former managing editor of The Chronicle Herald Dan Leger posted a message on X saying the potential sale is “extremely bad news.”
“As a former Herald editor, this realizes a longstanding fear, soulless right-wing dark money buying the fine old paper. So much for 150 years of history and a vicious blow to local coverage,” he wrote on Friday.
The national union that represents workers at nine Postmedia newspapers, and SaltWire publications said in a statement the union will hold the company to account for its commitment to investing in local news and jobs.
“Postmedia has a track record of cutting newsrooms to the bone and jeopardizing local news coverage with short-sighted decisions,” said Carmel Smyth, president of CWA Canada.
On March 11, Fiera Private Debt Fund initiated insolvency proceedings against SaltWire and the Herald under the federal Companies’ Creditors Arrangement Act. It said the companies together owed more than $90-million to a long list of creditors, including $32.7-million to Fiera, the senior secured lender, after several years of mismanagement. At the time, Fiera alleged that senior managers had left the operations “on the verge of a liquidity crisis,” and had been in default for more than five years.
The Nova Scotia Supreme Court granted the companies protection from creditors, a measure that has been extended a number of times, while Fiera has supported a restructuring and sale process through a series of loans that have allowed SaltWire and the Herald, owned by Mark Lever and his wife Sarah Dennis, to keep operating.
Earlier this year, Mr, Lever stepped down as president and CEO of SaltWire.
On June 20, the court-appointed monitor overseeing the insolvency proceedings, Toronto-based KSV Restructuring Inc., confirmed the selection of an unnamed bidder.
With a report from The Canadian Press