A recent wave of layoffs at PostMedia is raising questions about where the media bailout money actually went.
A recent wave of layoffs at PostMedia made headlines recently. Big publishing corporation, PostMedia, wound up laying off 11% of its entire workforce. One such report came from The Globe and Mail which had this to say about the layoffs:
Postmedia Network Canada Corp. PNC-B-T will lay off 11 per cent of its 650 editorial employees, the company said Tuesday, as it contends with rising costs and declining advertising and circulation revenue.
The media company, which owns more than 130 brands including the National Post, announced the cuts at an employee town hall. “There’s no question that we are in an existential fight for our lives,” said acting senior vice-president of editorial Gerry Nott, according to a recording obtained by The Globe and Mail. “I do think that we’re transforming … It’s clear to me that we need to hasten the speed.”
The restructuring will affect all titles across the chain, except for those acquired from Brunswick News last year, Mr. Nott said.
The challenges are evident in Postmedia’s latest quarterly results. Earlier this month, the company reported a $15.9-million loss compared with $4.4-million in the same period a year ago, along with declines in revenue from advertising and circulation.
On first blush, the report seems relatively straight forward. There is a decline in ad revenue. There is a shift in readership behaviour. What’s more is the fact that the media business has been an increasingly challenging business. The report even insinuates that Bill C-18, Canada’s Link Tax, might have played a role in averting these events. There is, however, one problem with the report, and that is what was actually left off of the report.
While these are, indeed, challenging times to be in the media business, the federal government has, for years, been active in keeping these businesses afloat anyway. You might recall that throughout the pandemic, numerous businesses received COVID-19 related subsidies. The idea behind those subsidies is that even though companies aren’t making money due to the pandemic, they can still send out paychecks to employees because the government stepped in to help pay for those expenses. The media was treated especially well in this regard as they have received layers upon layers of subsidies. From Canadaland back in July of last year:
The number of media subsidy programs provided by the federal government keeps growing.
At the moment, there’s:
- The $50 million Local Journalism Initiative
- The $595 million media bailout
- The $60 million pandemic-specific Emergency Support Fund
- The $10 million Special Measures for Journalism top-up fund.
Canadaland has obtained a document of the recipients of a $23.5 million media assistance fund that doled out money to free, digital, and small-circulation magazines and weekly newspapers.
Government-approved news outlets are not restricted to one fund, and there are overlaps between recipients.
All of this funding comes while various news outlets have been receiving other COVID-relief subsidies, primarily the Canada Emergency Wage Subsidy (CEWS).
This raises a number of very interesting questions. Did PostMedia receive any of this financial aid. If so, how much did it receive. Additionally, if they did receive the above financial aid, why are these layoffs happening anyway? Did they not receive enough money or did that money get redirected elsewhere somehow? After all, you look at the one story where big media received hundreds of millions of dollars, then compare it to the other story where a big media publisher is cutting huge swaths of staff, posting up losses and acting like the business is on deaths door. One of these thing is not like the other.
While some media outlets might be content with just saying that the layoffs are just more evidence that Canada somehow magically “needs” Bill C-18, there’s a lot about this story that just doesn’t add up here. You can’t help but think that there might be something suspicious going on here.
Drew Wilson on Twitter: @icecube85 and Facebook.
