Hammill’s workweek ended abruptly that Monday morning, however, after he heard the announcement that Postmedia and Torstar had traded 41 newspapers and were closing 36 of them. Within 10 minutes, he received a letter from Postmedia’s Human Resources department informing him that the company had sold the newspapers he worked for, and that the new owner would “not require your services.” Hammill deduced that the companies had co-ordinated the closures, since he had been fired by Postmedia although Torstar was the new owner. “I didn’t actually have too much of a problem with the swap then,” he later told the Vancouver-based website The Tyee. “I understand business.”
At 147, the Packet & Times was almost as old as Orillia. “A bust of its founder stands in the library,” noted the Globe and Mail. The newspaper was closed “with a snap of the fingers,” added the Globe, and then one final insult was added. “The Packet didn't get a chance to put out a final issue bidding farewell to the community it served for all those years.” Hammill understood the transaction was just business and felt no need to go public with his doubts until he saw Godfrey’s interview on BNNBloomberg, in which the CEO claimed he had no idea that Torstar would close the newspapers it acquired from Postmedia. “That’s when I spoke up,” Hammill told The Tyee. “I must have seen the interview a dozen times.”
Hammill contacted the Competition Bureau and contradicted what Godfrey claimed about all the closed newspapers losing money, revealing that they were instead making money. The closed Collingwood Enterprise Bulletin was doing “really good,” he said, while the Barrie Examiner was “doing okay,” and he was surprised they had been closed. Hammill wasn’t about to wait for the bureaucrats in Ottawa to bail him out, however, as he had a family to support. He had enough experience in the newspaper business to know that there was still a market for advertising in small communities such as his. Maybe it wouldn’t be in print newspapers, but he knew that he could sell ads.
Hammill got in touch with Sault Ste. Marie-based Village Media, which published a string of online publications including SooToday.com, GuelphToday.com, BarrieToday.com and TimminsToday.com. Together with several other laid-off Packet & Times workers, Hammill and Village Media founded OrilliaMatters.com, which went live in early 2018, not six weeks after their newspaper was closed.
The two chains also closed numerous long-publishing community newspapers they acquired from each other, with Black Press accumulating titles on Vancouver Island, where it soon owned them all, and Glacier Media adding newspapers in the Vancouver suburbs. “It is by now a familiar script,” noted B.C. Business magazine in 2015. “Through horse-trading, Glacier Media or Black Press . . . become the sole owners of a community’s weeklies. And then one of those papers shuts down.” When Glacier closed the weekly Westender community newspaper in Vancouver at the end of 2017, which it had acquired from Black Press in a city where it already owned the thrice-weekly Courier, it brought to 24 the number of newspapers lost to closure or merger following their exchange of 33 titles.
The Competition Bureau had also taken no action after Postmedia acquired Sun Media in 2014, effectively merging the country’s two largest newspaper chains. Its ruling in that case was a watershed moment for newspaper competition in Canada. The deal itself was unprecedented. “This doesn’t just alter Canada’s print-media landscape,” observed the Globe and Mail, “it takes a bulldozer to it.” Postmedia, it added, had “thrown down the gauntlet to Canadian regulators, and forced the country to have a conversation that it has long avoided: How much are we willing to compromise the principles of a diverse and competitive press in the name of keeping it alive?”
The Bureau investigated the transaction for five months and somehow concluded that the Sun newspapers Postmedia acquired in Calgary, Edmonton, Ottawa, and Toronto didn’t compete with its broadsheets in those markets. “Extensive documentary and empirical evidence demonstrated that the parties are not close rivals from the perspective of readers,” its ruling noted, “a finding that was supported by the views of market participants and by an analysis of the demographic characteristics of the parties’ respective audiences.”
Besides, Godfrey had assured all concerned that Postmedia would keep the newspapers, and their newsrooms, separate. “We intend to keep Sun Media’s large daily newspapers in those markets where we overlap,” he told the Toronto Sun when the deal was announced in 2014. “Their readers and their advertisers in many cases are different from those of Postmedia.” The Sun reporter paraphrased Godfrey’s promise. “Sun Media will continue to operate independently with its own newsrooms and opinions, he said.”
Part of the problem was that the Competition Bureau was empowered to examine only economic factors, which in the case of newspapers meant advertising and not news. Its governing Competition Act was “not intended nor designed to deal with the important question of ‘diversity of voices,’” the Bureau noted in a 2003 summary of its work in media industries prepared for a Senate inquiry into news media.
The inquiry’s subsequent report was harshly critical of both the Competition Bureau and, in broadcasting, the Canadian Radio-television and Telecommunications Commission for what it called their “neglect” of news media. “One challenge is the complete absence of a review mechanism to consider the public interest in news media mergers,” it noted. “The result has been extremely high levels of news media concentration in particular cities or regions.”
The relevant section of the Competition Act had lain dormant for almost 30 years, however, until a Supreme Court of Canada ruling came down in 2015 just as the Competition Bureau was investigating the Sun Media takeover by Postmedia. The ruling in the case of a hazardous waste merger in northern B.C. provided an ill-timed precedent that disempowered the Competition Bureau. This spotty record of anti-trust enforcement in the newspaper industry did not inspire much hope that the Competition Bureau would intervene in the Postmedia-Torstar trade and closures, but it could not ignore the whistleblower evidence provided by Hammill.
The Competition Bureau soon pursued search warrants, describing in court documents how lawyers for both companies had been working on Competition Bureau official Pierre-Yves Guay to call the investigation off. “A lawyer for Torstar e-mailed Mr. Guay to request a phone call with both companies’ lawyers,” according the documents. “Mr. Guay replied by e-mail that this would be ‘highly inappropriate’ and scheduled separate calls instead the next day.” The Competition Bureau claimed that Hammill’s evidence indicated “prior negotiation, agreement or arrangement” between the companies related to the closings.
As a result, its investigators said they believed the companies had “entered into a conspiracy” because their agreement specified which employees would be terminated when the transaction closed. The court documents also pointed to press statements made by Postmedia executives that both companies were unaware of the other’s plans to close the papers as “inconsistent with actions taken by Postmedia and Torstar and with the terms and conditions set out in the transaction documents.”
After search warrants were granted, Competition Bureau officers raided the offices of both Torstar and Postmedia in mid-March, along with those of Torstar’s Metroland chain in Mississauga and its Hamilton Spectator. The search of Metroland’s headquarters found documents which referred to the deal as Project Lebron, presumably after the basketball star, but on Postmedia’s end it was code-named Project Ice.
“Given the pattern of facts laid out by the Competition Bureau,” the Globe and Mail concluded, “the best course of action may have seemed to be: Do one thing, say another, and bet that no one ever found out.”.jpg)
Less than a week later, Postmedia released information to shareholders in advance of its annual general meeting which showed that Godfrey’s annual compensation for the fiscal year topped $5 million. In addition to his $1.2 million salary as CEO, Godfrey was awarded $1.2 million in bonuses, $2.4 million in stock options, and other compensation that brought his total remuneration to $5.04 million. Andrew MacLeod, who had been promoted a year earlier to president and chief operating officer, received $2.2 million, or more than double his compensation the previous year, while the total for Postmedia’s top five executives came to more than $10 million.
Postmedia announced early in 2019 that Godfrey, who was about to turn 80, would step back from management and serve out the remaining two years of his contract as executive chair of its board. As expected, it named MacLeod to replace him as CEO. The bailout did not mean total victory for Godfrey’s leadership of Postmedia, however, as some unfinished business still hung over its head in the form of the Competition Bureau investigation. “We remain confident that this will ultimately result in an exoneration,” MacLeod said.
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