Postmedia Network’s chief executive renews call for legislation forcing tech giants to pay for content

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The chief executive of Postmedia Network Canada Corp. says he is disappointed the federal government has yet to pass legislation to level the playing field between domestic publishers and foreign tech giants and that he is concerned a recent content deal between certain rivals and Google will hurt the bargaining position of smaller publishers.

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“Are we disappointed this legislation wasn’t enacted before the summer recess? Yes. But we do recognize that the government was dealing with a pandemic of significant proportions,” Andrew MacLeod said during an interview following the release of Postmedia’s third-quarter earnings Thursday. “We’re hopeful that it will be at the top of the list when the government resumes.”

MacLeod said that legislation similar to what has been implemented in Australia, forcing tech giants to pay media companies for their content, is needed as an “industry-wide solution” to level the playing field with Big Tech.

Facebook Inc. and Alphabet Inc., Google’s parent company, opposed the Australian legislation but ultimately signed deals immediately before the laws to pay Australia’s largest media companies came into force.

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Canada has not yet passed a law forcing Big Tech to pay domestic media companies, but Google signed deals with a number of outlets in Canada on June 24, including the Toronto-based Globe and Mail, the Winnipeg Free Press, British Columbia’s Black Press and Glacier Media, Quebec’s Métro Media and Nova Scotia’s Saltwire Network.

“I respect the right of all companies to be doing what’s in their self interest and I understand the financial pressure that some players feel and the urgency they feel relative to creating more certainty in their financial environment, but I think that speaks to the need for the government to enact the promised legislation,” MacLeod said.

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He added that he was disappointed to see one of Canada’s largest newspapers strike a deal, because he believes the industry needs to stand together to find a solution to the challenges posed by Big Tech.

“I think it’s disappointing when you have an iconic company and a uniquely Canadian company like the Globe and Mail deciding to do a deal with the giants,” he said.

Globe and Mail publisher and chief executive Phillip Crawley said that government has taken years to address the issue and that media companies may be forced to wait additional years before legislation is both enacted and enforced.

“We can’t stand still,” Crawley said in an interview. “While they may regret the fact that we’re not all standing shoulder to shoulder, from a Globe point of view, the opportunity to do a deal with Google on good terms and have it in effect this summer is something that I’m going to take, rather than wait and hope that government at some point is going to deliver.”

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Heritage Minister Steven Guilbeault did not respond to a request for comment on when new legislation on the file would be enacted.

Our hope is that Canada will start to emulate the level of economic activity we’re seeing out of the U.S.

Postmedia CEO Andrew MacLeod

MacLeod’s comments came after Postmedia, which owns the National Post and Financial Post, announced earnings for the three-month period ended May 31.

The company posted positive net earnings of $8.7 million in the quarter, reversing a net loss of $13.8 million a year earlier.

Revenue for the quarter ‪was $111.7 million, a decline of less than a percentage point over the same period the prior year. While print advertising revenue declined by $3.2 million, or roughly eight per cent, total digital revenue was up $4.7 million, or close to 22 per cent.

Postmedia also repaid $16.9 million of first-lien debt during the quarter, which it ended with an unrestricted cash balance of $53.4 million.

MacLeod said that he saw reason for “cautious optimism” amid indications the economy was emerging from the pandemic.

“Our hope is that Canada will start to emulate the level of economic activity that we’re seeing out of the U.S. and our industry will start to emulate what we’re seeing out of the U.S. right now,” MacLeod said.

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