[Craic] interesting Globe & Mail articles about the sale of the Toronto Star

[Arthur Blomme]

Thanks David for sharing this important information.

On 5/29/20 10:06 a.m., David Walsh wrote:
>
>   * It would be good to share thoughts on the Toronto Star sale at our
>     CRAIC discussion
>
> David
>
>
>   Did the Toronto Star just sell its soul for
>   survival?https://www.theglobeandmail.com/opinion/article-did-the-toronto-star-just-sell-its-soul-for-survival/
>
> The proposed sale of the Toronto Star to two Bay Street deal makers 
> should have Joseph Atkinson rolling in his grave. The newspaper’s 
> legendary editor and long-time controlling shareholder did everything 
> within his power to ensure that the Star continued to reflect its 
> social-justice and welfare-state ethos beyond his death in 1948. And 
> the “Atkinson principles” have remained at the core of the Toronto 
> broadsheet’s journalistic mission ever since.
>
> It is a sign, however, of the desperate times in which the newspaper 
> industry finds itself that Canada’s once dominant metropolitan daily 
> is about to be sold for a relative song to two businessmen, one of 
> whom has specialized in rescuing fallen corporate giants. There were 
> few options left for the Star’s parent company, Torstar Corp., which 
> was already bleeding red ink even before the novel coronavirus 
> pandemic sapped what was left of its advertising revenue base.
>
> What the proposed sale of Torstar for just more than $51-million to an 
> entity called NordStar Capital, controlled by Jordan Bitove and Paul 
> Rivett, really means will depend on whether the two men are serious 
> about ensuring the paper continues to adhere to the Atkinson 
> principles. Those principles would seem to be out of sync with the 
> deal-making, cost-cutting, property-flipping capitalist ethos that Mr. 
> Bitove and Mr. Rivett have embodied in business. Both men are known to 
> support Conservative causes and politicians, not the small- and 
> capital-L ones with which the Star has always been associated. They 
> are free-marketeers; the Star, not so much.
>
> Both men referred to the Star’s “brand” as the paper’s best asset. 
> Yet, I can’t think of anything more insulting to Mr. Atkinson’s 
> legacy, or to the journalists who seek to uphold it, than to refer to 
> the Star as a brand, like Tide or Nike or Apple. The Star’s 
> progressive values are not a marketing tactic to attract left-leaning 
> readers. They’re bred in the bone.
>
> -------------------------------
>
>
>   Torstar’s family trust sells near market bottom -May 27, 2020
>
> https://www.theglobeandmail.com/business/article-torstars-family-trust-settles-to-sell-at-the-bottom/
>
> When he died, Atkinson left control of the company in a charity. In 
> 1958, after the Ontario government ruled charities could not own 
> businesses, Atkinson’s heirs and four senior executives set up a 
> voting trust and bought control of the flagship Toronto Star for 
> $25.6-million. For a time, tight family control made Torstar a 
> cash-generating machine that built a regional media empire and moved 
> into books by acquiring Harlequin, the romance publisher the company 
> eventually sold to News Corp. for $455-million in 2014.
>
> *Other parts of article*
>
> It seems hard to imagine in this digital age, but Torstar Corp. was 
> once a multibillion-dollar media platform, coveted by rivals, and its 
> five controlling families boasted wealth comparable to that of many 
> modern tech entrepreneurs.
>
> Now those five families – descendants of former Toronto Star publisher 
> Joseph E. Atkinson, who died in 1948, and four former senior 
> executives – are selling voting control in the 128-year-old company 
> for $6-million. They spurned overtures from Fairfax Financial Holdings 
> Ltd. four years ago at far richer levels. Less than two decades back, 
> their stake was worth nearly $300-million. And in a pre-internet era, 
> Torstar fought on equal terms with rivals such as Rogers 
> Communications Inc. for control of cable networks, and the controlling 
> shareholders turned down lucrative takeover offers.
>
> For the second, third and fourth generations of the families, the 
> decision to throw in the towel was driven by the company’s 2019 
> decision to suspend common share dividends. “That was the final 
> straw,” said entrepreneur Jordan Bitove, who is teaming up with former 
> Fairfax president Paul Rivett to buy Torstar for just more than 
> $51-million. “The numbers were challenging, a significant investment 
> was needed to complete the digital transformation of the business, and 
> then came the dividend cut.”
>
> Torstar has 9.8 million class A voting shares, almost all of which are 
> owned by the five families, and non-voting class B shares. As recently 
> as 2004, those shares were worth $30 each. Now NordStar Capital, a 
> company controlled by Mr. Bitove and Mr. Rivett, is buying Torstar for 
> 63 cents a share.
>
> Mr. Honderich’s total stake in Torstar is worth $3.2-million, 
> according to a regulatory filing. The Honderich family and two others 
> in the shareholder group hold stakes of the voting A shares that are 
> worth a total of just over $900,000.
>
> --------------------------------
>
>
>   Toronto Star publisher’s loss widens as coronavirus hits advertising
>   revenue
>
> DAVID PADDON
>
> THE CANADIAN PRESS
>
> PUBLISHED MAY 6, 2020
>
> https://www.theglobeandmail.com/business/article-toronto-star-publishers-loss-widens-as-coronavirus-hits-advertising/
>
> Torstar Corp. lost $23.5 million in the first quarter as revenue 
> dropped 20 per cent from the same time last year amid a decline in 
> advertising and flyer distribution, the print and digital publisher 
> said Wednesday as it released quarterly results and held at a virtual 
> shareholders meeting.
>
> The company, which owns the Toronto Star and other newspapers, said it 
> has made progress on a long-term transformation of its business toward 
> digital publication but faces significant pressure on revenue as 
> businesses cut back on advertising amid the COVID-19 pandemic.
>
> Torstar chief executive John Boynton said that public interest in the 
> COVID-19 health crisis and economic slowdown resulted in “a 
> significant increase in digital traffic to our sites, beginning in 
> March and continuing into the second quarter.”
>
> Unfortunately for Torstar, this increased traffic has not driven 
> digital advertising revenues because some marketing digital giants, 
> which Boynton didn’t identify, have blocked the placement of ads on 
> any sites that even mention COVID-19 due to brand safety concerns.
>
> Torstar in April announced 85 permanent layoffs across the 
> organization. It said Wednesday that it expects the job cuts will 
> produce $7 million of annualized savings from that initiative. It has 
> also frozen discretionary spending, for a $5 million reduction for the 
> full year.
>
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