Kelly Toughill, a journalism professor at the University of King's College in Halifax, makes an argument why Canadian newspapers, if not looking up, at least aren't staring down into an abyss.
John Honderich, chair of Torstar Corporation, pointed out recently (during a speech at the 2009 Joseph Howe Symposium) that newspapers are far from money losers, despite the red ink that has washed across the bottom line of most newspaper companies in recent years.
Even Canwest, which filed for bankruptcy protection in early October, has a good-news story hidden in its last quarterly financial statements. The document filed in July shows that Canwest newspapers were still coughing up modest amounts of cash.
Toughill said the CanWest papers had combined operating profits of $152 million in the first nine months of the company's fiscal year. TorStar Corp.'s newspapers had a $20-million profit in the first six months of its fiscal year.
Maybe that's why investors seem to be turning back to newspaper companies after deserting the sector.
Canadian newspaper companies have outperformed the S&P/TSX 60 substantially over the last three months. Torstar stock is up roughly 50 per cent. Quebecor is up 30 per cent. Even Canwest's penny stock briefly rose faster than the S&P/TSX 60, before it filed for bankruptcy protection and halted trading.
She also claims readership is holding steady, online readership is up 10 per cent and there is evidence that newspaper circulation may be hitting a natural floor.
Toughill closes on this note:
The good news of operating profits, higher stock prices and circulation stability do not point to a solution for the crisis. The problems are very severe. Goldstein’s study also shows continuing declines in newspaper revenues. But the good news does inject a bit of hope into the debate over how to forge a new business model for public service journalism in the 21st century.