Postmedia pushes for federal, industry-wide legislation on payment for content by tech companies

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Canadian media companies are split over the industry-defining issue of how to get tech platforms such as Google, Facebook and Apple to pay for news content.

The chief executive of one of the country’s largest publishers, Andrew MacLeod at Postmedia Network Canada Corp., wants to see the Canadian government emulate Australian regulators and create a framework that forces tech platforms to pay all news organizations for access to their work. Postmedia owns more than 120 news brands across Canada, including major daily newspapers in six provinces.

“We need an outcome for the industry, and the country, that benefits every platform,” Mr. MacLeod said in an interview on Thursday. The federal Liberals have repeatedly promised policies to support the news industry, but did not bring forward any legislation concerning the relationship between tech firms and the news sector. Mr. MacLeod said government intervention is needed to address the disparity in size and resources between domestic news platforms and global tech companies, which wield “monopolistic dominance.”

“These are tech companies that routinely negotiate as equals with sovereign nations, and win,” said Mr. MacLeod. He said that by negotiating collectively, Australian news platforms showed they could strike more lucrative agreements with tech companies than any player could achieve on its own. Mr. MacLeod said: “It’s comparable to athletes negotiating with wealthy team owners. The athletes’ power comes from negotiating together.”

The divide between news platforms was starkly illustrated last month, when Google Canada announced a partnership with eight news organizations, including The Globe and Mail, that will see the tech company pay for content on a platform called Google News Showcase. The program is part of parent Alphabet Inc.’s US$1-billion global commitment to media platforms. Postmedia did not participate in the project.

When the Google partnership was announced, industry group New Media Canada chair Jamie Irving said: “Until news media in this country can negotiate collectively with Google and Facebook, the two multinationals will continue to divide and conquer, using their power and market dominance to drive terms that are in their favour.” Postmedia and The Globe are members of News Media Canada.

Postmedia announced quarterly financial results on Thursday, with revenues flat year over year at $112-million. The Toronto-based company turning a $8.7-million profit compared with a $13.8-million loss in the same period last year.

Postmedia’s print advertising sales fell by 8 per cent in the quarter compared with a year ago. Historically, print ads were the company’s most significant revenue source, but the company’s digital advertising and digital subscription revenues both increased by 22 per cent in the quarter compared with the same period a year ago. Mr. MacLeod said these are business lines that will carry the company forward.

“We’re cautiously optimistic in our outlook,” Mr. MacLeod said. “Our customers’ desire for quality content continues to be extremely high as we emerge from the pandemic.”

In May, Postmedia took a minority ownership stake in personal investment platform Wise Publishing, which runs MoneyWise-branded websites. Mr. MacLeod said the two companies are now working on ways to earn more revenue from their combined audiences. The MoneyWise platforms attract more than 10 million visitors each month.

Five years ago, Postmedia went through a financial restructuring that left the company with $225-million of first lien debt. Mr. MacLeod said paying down debt and strengthening the balance sheet remain a priority. Over the past nine months, Postmedia paid down $16.9-million, partly through asset sales. Since 2016, the company has cut first lien debt by 70 per cent to $66.9-million, and it held $53.4-million of cash at the end of the most recent quarter.

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