Postmedia business model to blame for newspaper closures, Ottawa publishers say

Two Ottawa newspaper publishers are blaming Postmedia's flawed business model for the impending closure of 24 community papers, saying the company has lost focus of the communities they serve.

'Throw the business model out the window,' Ottawa community newspaper publisher says

After Postmedia announced its plans to close 24 community newspapers, two Ottawa publishers are saying the company's business model is to blame. (Laura Beaulne-Stuebing/CBC)

Two Ottawa newspaper publishers are blaming Postmedia's flawed business model for the impending closure of 24 community papers, saying the company has lost focus of the communities they serve.

Postmedia and Torstar announced Monday they were swapping ownership of dozens of community newspapers. Of the 26 papers Postmedia got in the deal, 24 are being shut down or have already been shuttered, including Metro Ottawa.

But two local publishers whose outlets were not involved in the deal said community news isn't the problem — it's Postmedia's business model that needs work. 

Fred Sherwin, owner of the Orléans Star and Orléans Online, told CBC Radio's Ottawa Morning that a strict focus on profit is no way to serve a community. 

"The problem with Postmedia is a lot of those papers were looked at as advertising vehicles and the product suffered because of it," he said. "The business model should be creating a good product that's relevant to the readers … and you'll sell advertising based on that."
Fred Sherwin, owner of the Orléans Star and Orléans Online, says Postmedia's profit-driven business model is to blame for the closures of 24 community papers. (Leah Hansen/CBC)

CEO blames closures on shift to digital

Postmedia said in a news release that most of the 24 publications will be closed by mid-January. Only the Exeter Times-Advocate and the Exeter Weekender will stay in operation. 

CEO Paul Godfrey defended the company's move on Tuesday, telling Ottawa Morning the closures are a result of a shift away from newspapers and toward digital content.

But Jeff Morris, publisher of the Manotick Messenger and the Barrhaven Independent, said the Postmedia closures don't  necessarily reflect the the health of community news. 

"I think it's very unfortunate, but it's not that journalism is going down, it's not that the newspaper industry is dying," he said. "That business model that they had is dying."

Competition Bureau looking into deal

The Competition Bureau announced Tuesday it would be looking into the transaction, though Postmedia said in its release that "no regulatory clearance is required to close the transaction" under the Competition Act. 

The Elmvale Acres Community Association (EACA) in south Ottawa has created an online petition in an effort to lobby the bureau to stop the deal from going through. 

Several community weeklies in the area — the South Ottawa News, the Nepean/Barrhaven News and the Kanata Kourier-Standard — went to Postmedia in the transaction and are now slated for closure. 

The EACA's concerns include the possibility of "provincial and municipal elections being waged without dedicated local media coverage," the group said in a newa release. 

'Throw the business model out the window'

It's unclear whether the Competition Bureau would be able to stop the transaction from being completed. 

More than 290 jobs were eliminated in the swap, which Postmedia said will "deliver cost synergies while maintaining those operations that are sustainable."

But Sherwin said that a focus on the local community has to come before advertising

"If they're not focused on the community, they're going to have issues," he said. "If I'm an advertiser with a local business, why would I advertise in a paper without any content?"

His advice for Postmedia?

"Throw the business model out the window."