TORONTO — Paul Godfrey doesn't need to be prompted to talk about the troubled state of Canada's media industry in the midst of a steady stream of bleak news — the Postmedia CEO raises the topic himself.

Just a few minutes after stepping into his office at the company's headquarters in downtown Toronto, Godfrey is already expounding on how he sees an industry in strife.

Godfrey said he's not interested in asking for the government's help at this point. (The Canadian Press)

"There's no doubt the business models for newspapers, magazines and conventional television are all being disrupted," said the 77-year-old executive, stating what's become painfully obvious for Canadian news outlets.

Godfrey points to technology giants like Google and Facebook as behemoth competitors who are luring away longtime advertisers by selling audience reach and metrics that traditional media companies simply cannot offer.

Canada's media industry is indeed facing widespread turmoil — hundreds of pink slips have been handed out already this year, and two daily newspapers are closing down permanently — but Postmedia is sitting with its own unique timebomb of financial constraints.

The country's largest newspaper chain, owner of the National Post and city dailies like the Ottawa Citizen and Vancouver Sun, is operating under debt obligations that come due over the next few years at astronomical amounts.

This year, Postmedia owes $25.9 million of long-term debt, and that figure jumps to a stunning $302.7-million in 2017, according to its annual report filed last November.

"Ultimately the buck stops with me, and I recognize that."

If Postmedia is unable to repay those debts, or find a solution to refinance what it owes, the company is almost certain to wind up in bankruptcy.

Godfrey stops short of trying predict Postmedia's future, saying that any suggestion its days are numbered is "a guess." But he clearly identifies where the potential pitfalls lie.

"We have bills to pay called mortgages — first-lien and second-lien notes," he said.

"When you own a house with two mortgages, you're still bringing in income every week, but if your revenue starts to fall and you can't pay off your mortgages, what are you going to do? You're going to keep cutting your costs or someone takes your home away from you," he added.

Disputes over acquisition

Godfrey then explains one of the biggest challenges in repaying those debts.

"What's really hurtful to us (is the) second-lien notes are all in U.S. funds," he said. "With the Canadian dollar falling the way it's falling, that's almost like a noose around your neck."

Others share those concerns, including Moody's Investors Service, which last week further downgraded its ratings on the company over its refinancing prospects.

Some analysts find it surprising Postmedia's newspapers have survived this long after sitting in limbo during the Canwest bankruptcy proceedings before they were bought in 2010 by an investment group backed by New York hedge fund Golden Tree Asset Management for $1.1 billion.

"Our philosophy here is fail fast."

The acquisition was contested by some, including the Communications, Energy and Paperworkers Union of Canada, which urged the federal government to reconsider the consolidation of so many newspapers, especially under a U.S. participant.

Golden Tree has remained a sticking point for media critics, with some suggesting the firm is sapping Postmedia business — particularly its valuable real estate assets — for as much as it can get.

Godfrey disputes those assertions.

"Golden Tree is an equity player, not a debt player," he said.

"If it wasn't for Golden Tree Asset Management, this chain may not be in existence today because there were no Canadians who stepped up to buy (the papers) .... People should be happy that at least somebody (bought the newspapers) and kept a lot of people employed."

In the coming months, Godfrey will reshape Postmedia even further in preparation for lender negotiations he hopes will lead to refinancing the first-lien notes by August 2017.