As the Atlantic media landscape takes on a new shape, one expert says that it’s a “lose, lose, lose” situation for everyone involved.
With today’s announcement that many of Transcontinental Inc.’s (TC) papers have been bought up by the parent company of The Chronicle Herald, it’s no surprise that the newly formed SaltWire Network Inc. is now the largest media operation in Atlantic Canada. As of Thursday, the new company will control 35 papers in four provinces.
A financed future
Although Mark Lever, president and CEO of SaltWire Network, declined to elaborate on the financial details of the deal it was disclosed that their financier was Integrated Private Debt Corp., a lending arm of Toronto-based Integrated Asset Management. The pair of companies have had a long-standing agreement. In 2012, Integrated Private Debt Corp. announced a deal to finance The Chronicle Herald $18 million.
But Jeffery Dvorkin, the director of journalism at the University of Toronto’s Scarborough campus, said that historically acquiring a large number of media organizations through financing hasn’t ended well.
“I would worry if I still had a subscription to that newspaper, I wonder if they’re positioning themselves to declare bankruptcy in a matter of months,” Dvorkin said.
He cited Postmedia as a company that has suffered due to aggressive expansion.
But Lever is happy with today’s announcement. He told Global News that from first contact to Thursday’s announcement of the successful acquisition, it has only taken “three to four months” for everything to fall into place – a move he credits to a previous relationship with TC media.
“We’ve had a collegial relationship with Transcontinental, TC Media, for some time, we’ve delivered some of their content and historically they’ve done the same for us,” said Lever from Charlottetown, P.E.I. “Now we’re super excited about launching SaltWire today and having feet on the ground in over 35 communities in Atlantic Canada.”
The press release this morning mentioned that 650 staff of the acquired TC Media papers would “receive an offer” from the new SaltWire Network. But Lever avoided directly answering a question on what changes, if any, would be made to staff at the newly acquired outlets.
Instead, Lever pivoted to the opportunities the new company will present for local papers.
WATCH: Union accuses Halifax Chronicle Herald of union busting
The workers left behind
But Dvorkin says that the deal makes it appear like The Chronicle Herald is more loyal to its shareholders than the people its job is to inform, especially with an ongoing strike from The Chronicle Herald’s unionized employees.
He called it a “PR disaster,” similar to the ongoing controversy with United Airlines to physically remove a man from one of their airplanes.
The Halifax Typographical Union (HTU) have been on the picket line over a contract dispute with the Chronicle Herald for the past 15 months.
According to Ingrid Bulmer, president of the HTU, the union didn’t find out about the acquisition until Thursday’s announcement. The only reaction their members had was shock.
“They have been telling us that they need deep concessions, that they need everything they can get to stay viable,” Bulmer said. “Then when you start buying other papers in the region it doesn’t translate to the same thing they’ve been telling us.”
Bulmer said that the union would like to meet with the company as they are not sure what their position is at the moment.
Lever said that The Chronicle Herald, now SaltWire’s, position hasn’t changed.
“I hope they see an opportunity to come back to work in a bigger more stable organization. I hope they take a look at the offer we’ve given them, which is one of the most generous in Atlantic Canada,” he said.
“If it we’re anyone but Mark Lever, I’d be inclined to say maybe that is something positive,” responded Bulmer.