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Casino capitalism comes to Canadian newspapers

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When will the lights go out at Torstar? The Star Building at One Yonge Street, Toronto … Image credit: David J. Climenhaga

Newspapering was a great career, fun and pretty well paid too, once upon a time. I'm pretty sure, though, that the whole daily newspaper thing is really closing in on the end of the line now.

Evidence?

The day before yesterday, The Tyee reported that both the Torstar Corp. and Postmedia Inc. newspaper chains knew they would simultaneously shut down 36 of the 41 newspapers they were about to swap in 2019 when they cooked up a deal to divide up parts of Canada into largely competition-free zones. Torstar's free Star Metro newspapers in Edmonton and Calgary were shut down as part of that arrangement.

This is supposedly illegal under the Competition Act. Agreeing to cut up markets to "lessen or eliminate the production or supply of the product," The Tyee reminded us, is literally a crime that can net fines of up to $25 million and prison terms for conspirators of up to 14 years.

But, ho hum, who cares about that stuff? Not the Canadian newspaper industry, what's left of it, and apparently with good reason.

At any rate, it turns out Torstar and Postmedia execs were exchanging emails discussing "who will terminate whose staff" and which corporation would make the "closure announcements" once the deal was done and their employees were sent packing.

The emails weren't made public until February 11, more than a month after the Competition Bureau announced it was pulling the plug on its investigation on grounds that included a lack of evidence there was any deal to reduce the supply of a product or service.

Huh?

On February 11 the Competition Bureau unsealed some of the documents used in its investigation, pretty well putting paid to claims that neither company knew the other side was about to close newspapers.

But Canada's failure to enforce competition law, while hardly unexpected, isn't at the root of the problems of the newspaper industry -- whose executives, including those at Torstar and Postmedia, would like you to think it's all about internet social media companies stealing their stories and a lack of federal subsidies for their moribund operations.

Concentration of ownership, which usually makes the kind of mischief Torstar and Postmedia seem to have gotten up to unnecessary, is where the decline started. By the time the internet came along, there wasn't much point paying for most Canadian newspapers since they all carried the same stories anyway. Local news? You could pretty well forget it.

Most readers, apparently including the authors of the skimpy coverage of the Torstar-Postmedia deal, seem to have forgotten that in 1980 it took the similar deaths of only two good newspapers to launch a Royal Commission into the concentration of ownership in the newspaper business and what to do about it.

The Royal Commission on Newspapers headed by Thomas Worrall Kent, once the editor of the Winnipeg Free Press and later a senior adviser to prime minister Lester B. Pearson, started with the shocking closings in August 1980 of the respected Winnipeg Tribune and Ottawa Journal, which had been around for 90 and 95 years respectively.

But then, those were days when newspapers still made a contribution to democracy and Canadians who paid serious attention were worried about concentration of media ownership.

A year later, when the Kent Commission reported, it made recommendations that could have saved the Canadian newspaper industry from the dire straits in which it now finds itself, which might have kept newspapers viable when the internet came along.

These included legislated tax breaks for local content, tight rules for ownership to ensure papers remained in local hands, and mechanisms to guarantee communities had a stake in the operations of their local media.

They were all ignored. Newspaper owners, who imagined the gravy train would never end, wanted none of it. They got their way.

Fast forward to 2021 and the end seems nigh. It's a pity, but it's hard to feel much sympathy, except perhaps for the poor taxpayers who are being called upon to bail these clowns out, and in the name of good journalism, no less.

After all, the great minds of the newspaper business rolled the dice and now they've come up snake eyes.

Speaking of which, yesterday we learned that Torstar has another plan to save its sorry corporate hide.

They'd like to open an online casino.

One imagines the shrewd and upright Joseph Atkinson, the poor orphan who grew up to be a social activist and publisher of the Toronto Star, must be spinning in his grave like a roulette wheel.

"As an Ontario-based media business and trusted brand for more than 128 years, we believe Torstar will provide a unique and responsible gaming brand that creates new jobs, offers growth for the Ontario economy, and generates new tax revenue to help support important programs in our province," someone called a chief corporate development officer said yesterday in a press release masquerading as news.

"Doing this as part of Torstar will help support the growth and expansion of quality community-based journalism," said one of the corporation's new owners, tongue presumably firmly in cheek.

Words fail. This is not a good bet.

Indeed, if you have any money left in newspapers, this would be an excellent moment to take the late Kenny Rogers' advice and run!

David Climenhaga, author of the Alberta Diary blog, is a journalist, author, journalism teacher, poet and trade union communicator who has worked in senior writing and editing positions at The Globe and Mail and the Calgary Herald.

Image credit: David J. Climenhaga

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