Postmedia business model to blame for newspaper closures, Ottawa publishers say

Two Ottawa newspaper publishers are blaming Postmedia'sflawed business model for the impending closureof 24 community papers, saying the company has lostfocus ofthe communities they serve.

Postmedia and Torstarannounced Monday they were swapping ownership of dozens of community newspapers. Of the 26papers Postmediagot in the deal, 24are being shut down or have already been shuttered, including Metro Ottawa.

But two local publishers whose outlets were not involved in the deal saidcommunity news isn't the problem it'sPostmedia'sbusiness model that needs work.

Fred Sherwin,owner ofthe Orlans Star and Orlans Online, told CBC Radio's Ottawa Morningthat a strict focus on profitis no way to serve a community.

"The problem with Postmedia isa lot of those papers were looked at as advertising vehicles and the product suffered because of it," he said. "The business model should be creating a good product that's relevant to the readers and you'll sell advertising based on that."

CEO blames closures on shift to digital

Postmedia said in a news release that most of the 24publications will be closed by mid-January. Onlythe Exeter Times-Advocate and the Exeter Weekender will stay in operation.

CEO Paul Godfrey defended the company'smove onTuesday, tellingOttawa Morning the closures are a result of a shift away from newspapers and toward digital content.

But Jeff Morris, publisher of theManotickMessenger and theBarrhavenIndependent, saidthePostmediaclosures don't necessarily reflect the the health of community news.

"I think it's very unfortunate, but it's not that journalism is going down, it's not that the newspaper industry is dying," he said."That business model that they had is dying."

Competition Bureau looking into deal

The Competition Bureau announced Tuesday it would be looking into the transaction, though Postmediasaid in its release that "no regulatory clearance is required to close the transaction" under the Competition Act.

The Elmvale Acres Community Association (EACA) in south Ottawa has createdan online petition in an effort to lobby the bureau to stop the deal from going through.

Several community weeklies in the area theSouth Ottawa News, the Nepean/Barrhaven News and the Kanata Kourier-Standard went to Postmedia in the transaction and are now slated for closure.

The EACA's concerns include the possibility of "provincial and municipal elections being waged without dedicated local media coverage," the group said in a newarelease.

'Throw the business model out the window'

It's unclear whether the Competition Bureau would be able to stop the transaction from being completed.

More than 290 jobs were eliminated in the swap, which Postmediasaid will "deliver cost synergies while maintaining those operations that are sustainable."

But Sherwin saidthat a focus on the local community has to come before advertising

"If they're not focused on the community, they're going to have issues," he said. "If I'm an advertiser with a local business, why would I advertise in a paper without any content?"

His advice for Postmedia?

"Throwthe business model out the window."