Covenant puts Postmedia’s back against the wall
It’s no secret there’s a lot going on at Postmedia Network Canada Corp. – layoffs have been announced, Sunday editions scrapped, buildings put up for sale and production has been centralized for its 10 daily newspapers to save costs. The company posted a $12-million loss in the last quarter alone, as print advertising revenue fell 10 per cent and subscription revenue fell 6 per cent.
But it’s been posting losing quarters for some time, which has caused some to wonder why chief executive officer Paul Godfrey suddenly decided to initiate an aggressive restructuring in May that will lead to almost $40-million in savings by the end of the year.
That sense of wonder was further extended this week when he said the company now has plans to save another $80-million within the next three years. He didn’t provide any details – when asked how he could possibly find another $80-million worth of cuts he said “let your imagination go.”
So why now? Has the print environment changed so drastically that the company needs to cut $120-million out of its budget ASAP? Well, yes. Things are pretty brutal.