Venture capitalists will tell you the worst investments are the walking wounded, enterprises that neither fly nor die but bleed cash and stagger from crisis to crisis. The challenge is determining whether they’ll ever come back. Wouldn’t it be more merciful to end the suffering?
Postmedia is long past that. It’s the Undead. Dead man walking. A corporate zombie waiting for a financial stake through the heart from banks, investors, shareholders – everyone with skin in the game of weighing $650M in debt against the dream of actually recouping some of their losses.
What’s Postmedia worth if it’s carved up and the chunks sold? CEO Paul Godfrey said in September selling assets wasn’t on the table. That was during discussion of a debt restructuring proposal to convert $648M in old debt into $325M in new debt at a marginally lower interest rate. The proposal was accepted, wiping out $200M in shareholder value in exchange for a $50M annual reduction in interest payments made possible by an injection of cash from a U.S. venture capital firm.
So what, you say? It’s more of the same bad drug that poisoned Southam, Hollinger, and Canwest, beginning with convergence: the asinine notion that one can achieve economies of scale by merging radio, television and print newsrooms and firing all those redundant bodies. Wave after unholy wave of wannabe media barons and their financial dogsbodies looking to boost shareholder value have succeeded in silencing hundreds of community voices across Canada. What they haven’t destroyed, they’ve burdened with debt and stripped of human assets to the point that even the Montreal Gazette, an enterprise with intrinsic value, may not survive the final cuts.
I can’t help laughing when I hear pundits holding out hope that federal regulators will ride to the rescue. We thought so too when we went to Industry Canada’s Competition Bureau with proof TC Media was attempting to stifle competition. The complaint followed Quebecor’s surrender after a four-year war of the weeklies with TC. Quebecor sold 74 weekly newspapers, some of them essential voices in their respective communities, to TC for $75M. TC merged some with theirs, sold others and placed half up for auction. The Competition Bureau could have imposed tougher measures on TC to ensure the survival of the orphans. It chose not to.
We hear about the plight of the Postmedia dailies, and with reason. But what about all those little weeklies Postmedia obtained from Quebecor? We’re talking about papers all over Canada, many of them in small towns and rural communities fighting for survival. What hope is there for a little community weekly whose reporter is the only neutral face at the monthly council meetings?
The disease isn’t confined to print. Parallel processes are underway in radio and television, with newsrooms slashed and content generation centralized. No wonder the Canadian media-consuming public isn’t consuming mainstream media – everything reads and sounds the same because we’re losing the diversity of voices. Government bailouts will do nothing to reverse the damage generations of bad management have caused.
It’s not just me. Friends say they stay better informed about what’s happening in North America when they’re getting their news via the BBC, TV5, Eurovision and Al Jazeera’s successor. CNN Asia is infinitely better than the Americentric mother ship.
Many of us have stopped reading newspapers because smartphones, tablets and apps are more convenient. I pay for the electronic New York Times and Globe and Mail because they’re must reads for original-source junkies like me. La Presse, CBC, Torstar, CNBC, BBC and L’Observateur fill in the blanks. Why read one newspaper when you can triangulate the daily truth for yourself?
I feel guilty about not taking the Gaz. It was my mom and dad for the 10 years I worked there. I know and like a lot of its people and wish them well. But until it improves its website and paywall terms, I’m not buying. From the sad sounds coming from Postmedia’s boardroom, I’m not alone.