Postmedia Network Canada and Toronto Star owner Nordstar Capital recently ended merger discussions after failing to reach an agreement. The transaction involved various Canadian news properties and had been initiated in an effort to reduce debt.
Postmedia Chief Executive Andrew MacLeod stated that the goal of the potential merger was to create an entity with less debt but a larger digital scale that would be able to compete with global technology giants while creating economies of scale. However, an uncertainty around regulatory and financial issues also led to the decision to end negotiations.
The industry has seen significant disruption recently after U.S. technology giants Alphabet and Meta both chose to remove Canadian news content from their sites and apps. The social media giants’ move came in response to a Canadian government bill, C-18, which required them to make payments to local news publishers.
Read more: Canada’s Largest Newspapers Talk Merger
In response to this development, Postmedia and Torstar have both halted their company’s direct advertising on Meta and other platforms, such as Facebook and Instagram. Jordan Bitove, owner of Nordstar and publisher of the Toronto Star, states: “Torstar remains focused on addressing the existential threats to journalism in Canada, which have been amplified in recent weeks with the announcements by Meta and Google that they intend to block access to Canadian news.”
The potential merger between Postmedia and Nordstar Capital was considered a way to position a competitive entity to stand up to the tech giants and address the existential threats to the media industry. However, the parties were unable to come to an agreement on the terms of the merger and ended their ongoing non-binding discussion to secure a definitive agreement.
As the media industry continues to try and shape a stable media landscape in a post-digital world, it will remain important for those within the industry to consider novel ways of creating a more competitive and sustainable environment. With no assurance that a definitive agreement will be reached between Postmedia Network Canada and Nordstar Capital, it appears the media landscape in Canada will stay in a state of flux while the industry looks for stability.
