Vancouver Sun, Province face “unprecedented” declines

VANCOUVER (NEWS1130) –  A bluntly-worded memo to staff from the head of The Vancouver Sun and The Province says both newspapers face “unprecedented” declines in revenue that could drive them out of business if something isn’t done immediately to cut employee numbers and costs.

Gordon Fisher, the president and publisher of the Pacific Newspaper Group, told employees that layoffs would likely follow a buyout program that it plans to launch immediately.

“We are depending on this program to drive dramatic staff reductions,” he wrote.

“Future decisions will be hard and must be made with a sense of urgency.”

Fisher didn’t disclose how many employees it needs to take buyout packages.

Both the Sun and the Province are owned by Postmedia through the Pacific Newspaper Group, and have suffered a 16 per cent decline in print revenue during the first three months of the year, with no signs of that trend letting up this month.

“Expense reductions have also come nowhere near closing the gap,” he said.

“If these trends continue, and if we don’t find ways to dramatically reduce costs, the answer is clear. The business is unsustainable.”

Postmedia Network Canada Corp. (TSX:PNC.B), which also owns the National Post and a slate of other newspapers and websites, has been struggling with the decline of newspaper ad revenues for years.

The company has tried to reverse the declines with a plan to launch paywalls across all of its newspapers, while planning more cuts across its operations, including centralizing its manufacturing, marketing and circulation departments.

Earlier this month, Postmedia reported a $14.2-million loss in the second quarter, while the company’s revenue fell 10 per cent to $178.8 million in the three months ended Feb. 28.

The memo said there could be a “sustainable and re-engineered business model” and that the newspapers “are great, trusted brands and we can together create a more promising future.”

Fisher asked employees to consider what they’re contributing to the turnaround of the company.

“If you do anything every day of the week let it be this: ask yourself if you are part of the solution or willing to be part of the solution,” he said.

“If you aren’t part of the solution, ask yourself why that is. We are all in this together and we are all fighting not only for the future of the Vancouver Sun and the Province but for the lives and well-being of our families.”

Robert Hackett with SFU’s Communication program says this doesn’t necessarily mean the end for the papers.

“I don’t think we’re looking at the death of newspapers, I think we’re looking at multi-media formats for newspaper companies, most likely one newspaper for major metropolitan areas.”

Hackett thinks papers will survive in some way, as advertisers still see newspapers as a way to reach local markets.

Hackett says this announcement is further bad news for Canadian journalism.

“Part of the problem they have, of course, is declining readership, particularly amongst younger people, and people who get their news online, they don’t want to pay for the production of original newsgathering as if it just falls out of the sky, somehow it has to be financed.”

As a result, Hackett predicts blind spots in mainstream media coverage, such as labour issues and climate change, will become even bigger.

“Policy supports are needed to help revitalize independent journalism in Canada,” he says.