Over in Canada, the Trudeau government is considering ways to give state aid to Canada’s largest publisher, Postmedia Network, which is staggering under too much debt, and its shares are all but worthless.
Ongoing discussions are being held with media groups via an independent facilitator to try to get some sort of consensus on financial and other aid for the sector (which already benefits from tax preference given to Canadian advertisers spending money with Canadian publishers and other media).
But Postmedia is the black hole everyone wants to stop happening — it has just reported its 14th successive quarterly loss as revenues plunged 13% in the three months to May as print ad spending continues to plummet. The company’s future remains problematic, even after its latest attempt (and what will probably be the last) to ease its financial pressures.
Postmedia is planning a radical restructuring plan aimed at halving its debt and cutting its interest bill, but in doing so, it will wipe out 98% of the already tiny value left for shareholders in the company (the shares were trading at just 1.5 cents Canadian before the results and restructure was announced; they doubled to 3 cents in the aftermath, and then fell back to 1.5 cents and closed overnight at 1 cent).
There’s a delicious irony here; under CEO Paul Godfrey, Postmedia was a strong supporter of the previous conservative Canadian government led by Prime Minister Stephen Harper (who was a soul mate of Tony Abbott). The group and its papers strongly opposed Justin Trudeau in Canada’s election campaign last year (much the way the Murdoch tabloids and The Australian opposed the ALP and Bill Shorten in our recent federal poll). Now the company’s fate depends on the Trudeau government coming up with some sort of aid package for it and others in the country’s ailing media sector.