Postmedia CEO 'encouraged' government will help struggling media industry
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TORONTO — The chief executive officer of Postmedia is "encouraged" that the federal government will intervene and help Canada's financially floundering media industry.
Earlier this week, Heritage Minister Melanie Joly said the government believes in the importance of journalism and is looking at all solutions presented to it during public consultations examining what role it should play in supporting the creation of Canadian content.
These comments are a hopeful sign, Postmedia CEO Paul Godfrey told the company's annual general meeting of shareholders in Toronto on Thursday.
"We think this government is taking it very serious," he said in an interview following the meeting.
Postmedia was among the companies to testify before the Heritage Committee. Stakeholders' suggestions included having advertisers pay HST for ads not only on Canadian media companies' platforms but also those of foreign competitors like Google and Facebook.
"If it's a level playing field for everybody we feel that we could probably survive in that type of a world," Godfrey said on the same day the company posted its first quarterly profit in nearly four years.
During the quarter ended Nov. 30, Postmedia was boosted by a debt restructuring deal which reduced the company's total debt of $648 million by about $307 million.
Postmedia says it earned $17.8 million or 31 cents per share compared with a loss of $4.2 million or two cents per share a year ago.
However, revenue fell nearly 15 per cent to $214.9 million during the quarter from $251.1 million a year earlier. Print advertising revenue fell by $31.1 million.
The results for the latest quarter included a $78.6-million gain related to the debt restructuring.
The company has struggled to be profitable as debt re-payment deadlines neared prior to the restructuring and amid declining print advertising revenue.
It has embarked on mass layoffs and merged newsrooms in four cities where it owns two papers in each location in efforts to reduce costs.
Godfrey said a plan to reduce salary costs by 20 per cent through voluntary staff buyouts, announced last October, did not materialize enough savings and the company will proceed with layoffs.
Postmedia did not indicate how many jobs would be impacted, but a spokeswoman said it expects to reach its salary cost reduction targets during this quarter.
Despite ongoing staff reductions, Godfrey defended the company's decision to award retention bonuses totalling $2.275 million to him and four other executives in an effort to keep key employees during the debt restructuring process.
Investors would not have put the money into the plan had they not been able to ensure a strong team would remain to lead the company, he said.
He shrugged off the point that one of the executives left the company at the end of November.
"But, so far, we've kept others," he said.
Godfrey, whose contract was extended last year until Dec. 2018, has no plans to leave Postmedia.
"This is probably, maybe the toughest challenge I've ever had in business," he said, "and I'm at a stage in my life that I'd like to see this thing through."
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Note to readers: This is a corrected story. A previous version referred to the company as Postmedia Networks Corp.