2016.01.14 | NEWS RELEASE
Troubling Postmedia financial news puts journalism at risk: CWA Canada
OTTAWA (Jan. 14, 2016) – CWA Canada, the country's only all-media union, is deeply concerned about the latest financial news involving Postmedia and is urging the company to take “constructive” action before it's too late.
The union is also calling on the federal government to introduce regulations to prevent concentration of media ownership and block destructive debt-leveraged takeovers of important national companies.
Postmedia reported yesterday that it is stepping up cost-cutting efforts as it continues to lose money while trying to pay down a massive debt. The company is now aiming for cost reductions of $80 million by mid-2017, up from its previous goal of $50 million by the end of 2017.
There was more troubling news today when RBC Dominion Securities cut its price target on Postmedia Network Canada Corp. to zero.
Postmedia blames shrinking print advertising for its woes but by far the biggest factor is its debt, which stands at a whopping $672 million.
The company has already cut more than half its staff and slashed newsroom budgets, and CWA Canada President Martin O’Hanlon warns that any further such action will only hasten the slide to bankruptcy.
He is urging the company to take constructive steps, such as investing in quality journalism, refinancing and selling some publications, divisions – or the whole company.
“This is what happens when ‘investors’ are allowed to buy a company using a huge amount of borrowed money and then bleed it dry to pay the lenders while keeping the CEO in their pocket with big bonuses,” O’Hanlon said.
“It is an outright scam and there should be financial regulations to prevent it. It's particularly egregious in this case because they’re not just destroying a company and hurting shareholders, they are well on their way to destroying quality print journalism in Canada — a huge blow to the public good.”
O’Hanlon said the concentration of ownership is also deeply troubling, with Postmedia holding a near monopoly on English-language newspapers across most of Canada.
"We’re now seeing why it’s so dangerous to let one corporation have so much control. It’s bad for journalism, the economy and democracy."
About CWA Canada
CWA Canada represents about 6,000 workers at companies such as the CBC, The Canadian Press, Thomson Reuters and many Postmedia publications.
For interviews or more information, contact:
Martin O'Hanlon
President, CWA Canada
613-820-8460
mohanlon@cwa-scacanada.ca