Postmedia Network Canada Corp., one of the country's largest news organizations, saw its quarterly losses grow by roughly 60 per cent this quarter as weak advertising continues to hamper the entire industry.
The company, which owns the National Post and local dailies such as the Calgary Herald and the Saskatoon StarPhoenix, said it lost $25.3-million in the second quarter. This compares with a loss of $15.8-million in the same period last year. The drop came on the same day as CBC/Radio-Canada, partially funded by a government subsidy, said it will chop 657 jobs over the next two years due to falling revenue and funding cuts.
News organizations in Canada and abroad have been suffering as the advertising industry becomes more fragmented and the number of subscribers drop. Postmedia is in the midst of a three-year restructuring process, which it says is adding pressure to its quarterly results. Meanwhile, CBC must now operate without its banner program – Hockey Night In Canada – after Rogers Communications Inc. won the coveted broadcasting rights to all NHL games for the next 12 years.
Postmedia said its growing loss was primarily due to restructuring costs totalling $3.6-million and depreciation costs totalling $4.4-million. Revenue also decreased to $162.5-million, a drop of 9.1 per cent from a year earlier. Revenue from print advertisements fell $15.5-million, or 14.7 per cent. The second quarter spans the Christmas holidays, historically a period of heavy ad buying.
"Over time, the reader is going to have to pay more," Paul Godfrey, Postmedia's chief executive, said in an interview.
Automobile ads, one of the major sources of revenue, are down since June of last year, representing just under 20 per cent of the company's print advertising, Mr. Godfrey said, a "significant drop." Despite the company's troubles, he said Postmedia's papers are not for sale.
"The [National] Post is profitable and the Post will not be closed," he said. "We do not have any of our brands for sale."
Postmedia's revenue from print and digital subscriptions also dropped in the quarter, although by less than 1 per cent each.
CBC on Thursday said it must trim $130-million from its budget this year and eliminate 657 jobs over the next two years. It will also refrain from bidding for the rights to broadcast professional sports, save for events like the Olympics.
With files from the Canadian Press