During a teleconference hosted by Postmedia Network today, held to discuss the company’s report on their first quarter, president and CEO Paul Godfrey admitted that whatever trouble the media company may be facing, it’s not alone.
“There’s no doubt that our entire industry continues to face significant pressures from a shifting competitive landscape and the changing behavior and appetite of audiences. Navigating through into a new way of doing business is our daily focus and so our transformation continues,” he said.
Released earlier today, the report announced that Postmedia’s cost-savings program would be increased by $30 million to a total of $80 million, it’s projected completion the end of the 2017 fiscal year. With the first $50 million to be implemented by May 31, it’s possible that the next year will see changes at the Leader-Post beyond those of the printing and branding kind.
Postmedia Network, which owns the local Leader-Post as well as other dailies like the Montreal Gazette and Calgary Herald, noted a net loss $4.2 million for the period that ended November 30, 2015, which is significantly less than the $10.3 million recorded for the same quarter the previous year.
Likewise, the company’s operating income and revenue have increased. The former had risen from $18.0 million in the first quarter of last year to $19.4 million this year, while revenue rose from $169.5 million to $251.1 million.
The $81.6 million revenue increase, according to the statement, is partly due to the acquisition of Sun Media properties. Completed this past August, the $316-million transaction transferred English-language publications in Calgary, Ottawa, Toronto, and other markets, from Quebecor Inc. to Postmedia Network.
Despite these seemingly growing numbers, Postmedia’s report announces that the cost-savings program, launched in July 2015, will be increased by $30 million.
And according to the president, what must be done will be done.
“Where we can remove duplication, we must. Where we can nurture green shoots, we will. And where we need to make tough decisions, tough choices, to give up our best chance for the future, we’ll do that too,” Godfrey said during the teleconference.
For Christopher Waddell, publisher of JSource.ca and professor of business journalism at Carleton University School of Journalism, Postmedia’s announcement of cost cuts is no surprise.
According to Waddell, the report demonstrates that “(Postmedia) continues to have big problems. They’ve been suffering along with lots of other companies.”
Indeed, the report notes that the company’s total operating expenses increased $84.7 million for the quarter.
Furthermore, print advertising revenue was down 17.6 per cent, print circulation by 6.7 per cent, and digital revenue by 5.7 per cent.
“All the revenues are going in one direction – and they’re going down. That’s not good for any company,” said Waddell.
Yet, Postmedia remains positive. The report estimates that $17 million was saved in this year’s first quarter, bringing the total amount of savings implemented since the program’s launch to about $32 million.
“While we have put tremendous focus on the ongoing redesign of our cost structure, we also continue to introduce new initiatives into the marketplace,” Godfrey said in the report.
“Our digital audiences are growing, both in size and engagement, and harnessing that power for advertisers through new service offerings including digital marketing services and content marketing is part of our core strategy for the year ahead,” the report continued.
However, Waddell expects big changes in the future, including further consolidation of papers and their production.
“The logical thing would be to shut the Suns down,” said Waddell, referring to the properties acquired this past year. “But whether they actually do that and how quickly they’ll do that, we’ll see.”