"Beyond the problem of government being seen to favour its friends, there’s the issue of who gets the money. Right now, it looks as if much of the tax credit money for hiring eligible employees could go to legacy publishers like Postmedia, who have repeatedly proven that they don’t have a viable business model going forward. At a certain point, not long from now, there will be no more journalists to lay off and no more buildings to sell but Postmedia will still be lined up for refundable tax credits from the feds."

The executive editor of the New York Times made a dire prediction last week. Most local newspapers in the U.S. “are going to die within five years,” he said.

“Their economic model is gone,” Baquet told a media conference in New York. The only local papers that will survive are likely to be those that have been bought by a local billionaire, Baquet said. It won’t be long before “we’re going to wake up one day and there are going to be entire states with no journalism or with little tiny pockets of journalism.”

The situation in Canada is, if anything, more dire still. Not only are local newspapers in trouble, national titles are also struggling. The Globe and Mail, our leading newspaper, recently announced yet another series of voluntary buyouts that will add up to 20 per cent of payroll. Predictions are that anywhere up to 100 positions will go, most of them journalists.

Maclean’s magazine, along with six other titles were recently sold by Rogers to St. Joseph Communications, publisher of Toronto Life. Maclean’s, already a shadow of itself, will likely fade still further.

By contrast, national titles in the U.S. like The New York Times and The Washington Post are reporting double digit growth in their online subscriptions. In the first quarter of 2019, the Times added 223,000 digital subscriptions for a total of 3.6 million digital-only subscriptions. While print ads dipped by 12 per cent digital ads jumped by 19 per cent. In 2018, the Times reported over US$700-million in digital revenues.

By contrast, Postmedia, Canada’s dominant newspaper chain, continues to bleed money. It’s something it specializes in. It lost $5.1-million in its most recent quarter (ended Feb. 28) as total revenue continued to fall, by a total of 7.5 per cent. About the only “good” news was the sale of the Ottawa Citizen building for $20.3-million, part of its longtime strategy of heating the house by burning the furniture.

What’s particularly depressing is that even though print advertising revenue declined by 14 per cent, Postmedia still depends on that shrinking pot for 40 per cent of its total revenues. Circulation revenue, also in free fall, accounts for a further 35 per cent. So after umpteen years of “transformation”, digital revenues are still less than 20 per cent of total revenue.

So while print ads were down by $10-million year-over-year, digital revenue increased by a pathetic $1.8-million. With numbers like these, I’d be salivating if I were a bankruptcy trustee.

Pay walls clearly aren’t working. It’s pretty clear why. A pillar of PostMedia’s business plan for years has been to cut costs, particularly editorial costs. So readers, reluctant to pay in the first place, are being asked to pay for an increasingly less appealing product. The New York Times, by contrast, added 120 newsroom employees last year to 1,600, its highest ever. No wonder people are willing to pay.

So, if this is the case, we should be celebrating the federal government’s foray into the media subsidy, including this week’s announcement by Heritage Minister Pablo Rodriguez that he would name “an independent panel of experts” to figure out who should get the bulk of the $600-million Ottawa has promised over five years.

These “experts” are in fact interest groups, including media owners, journalists’ associations and a big union, Unifor, who will decide who exactly will be eligible for the funds. It’s a slippery slope for sure. Allegations that the Trudeau Liberals are trying to buy off the press are circulating already.

The Conservatives are particularly incensed by the presence of Unifor on the panel. The union, which has lots of journalists as members, has launched a campaign targeting Andrew Scheer and the Conservatives in the next election campaign. They have a point.

Beyond the problem of government being seen to favour its friends, there’s the issue of who gets the money. Right now, it looks as if much of the tax credit money for hiring eligible employees could go to legacy publishers like Postmedia, who have repeatedly proven that they don’t have a viable business model going forward. At a certain point, not long from now, there will be no more journalists to lay off and no more buildings to sell but Postmedia will still be lined up for refundable tax credits from the feds.

If you’re worried about the Trudeau government involvement in press subsidies, there are even scarier proposals out there. In Alberta, Postmedia has reportedly hired Nick Koolsbergen, a former campaign director for the new premier, Jason Kenney, to lobby the provincial government on ways of getting involved in Kenney’s planned energy war room.

The war room is part of a Kenney campaign promise to spend $30-million to counter “lies and myths” about the Alberta energy industry. In other words, it’s a propaganda drive aimed at convincing that climate change is a hoax and the oilsands is great for the environment.

Postmedia insists that this money would go to its Content Works unit, which specializes in native ads. Info-commercials. Basically, our nation’s largest newspaper chain will be propped up by the energy industry and its Conservative political allies in Edmonton. What do you think that will do to editorial independence at The Calgary Herald or The Edmonton Journal?

Remember this is the same Jason Kenney who was immigration minister when a fake citizenship ceremony that drafted public servants to pose as new Canadians, was concocted for the benefit of Sun News.

There’s another danger about government involvement in the press, a very Canadian one. We have a pretty weak charitable tradition, particularly when it comes to the media. While Americans are used to donating to NPR and PBS, people here figure they pay for the CBC through taxes, so why bother?

That’s why it’s much easier in the U.S. to encourage civic-minded individuals to back local news operations, like Vermont Diggers, a dynamic non-profit news site that’s been covering the Vermont legislature since 2010 and is largely financed by its 2,000 members.

In Canada, people are see the travails of the news media and shrug. “I can get basic local news from the CBC website and as for my local paper, it’s getting cash from Ottawa so why spend scarce cash on anything so frivolous as an online news subscription. I’ll get a Double-Double and a dozen Timbits instead.”

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