Debt-Ridden Postmedia Seeks Ad Tax Breaks
CBJ — The head of one of the nation’s largest media companies is asking the federal government to spend more on newspaper advertising, and also provide greater tax breaks to companies that do the same.
Postmedia president and CEO Paul Godfrey made the plea to a Commons committee examining the future of the country’s local media.
Godfrey warned that, without added revenues, many local news outlets will likely be closed down in the next three years. The real injustice is that many of those smaller papers actually turn a profit, but with Postmedia mired in more than $600 million in debt, the cutting knife is out and it’s the smaller communities that are likely to suffer the most through the loss of their local newspaper either being shut down altogether or amalgamated with another nearby title.
The Liberals on the government committee were quick to disagree with Godfrey, accusing him of contradicting himself.
Liberal MP Adam Vaughan noted that Postmedia has been among the strongest critics of government spending on advertising, but now that it is mired in deep debt, Godfrey is taking a completely different stance on the matter.
Vaughan also questioned why taxpayers would want to bail out a financially failing company that is owned in part by a U.S. investment group. Many financial experts believe there is no way for Postmedia to pay off its massive debt and that the only hope for long-term survival is to seek bankruptcy protection.