Adedokun Waliyu 
Merger talks between Canadian media giants Postmedia and the company that owns the Toronto Star ended without reaching an agreement, both sides said Monday.
Postmedia, owner of the Toronto Sun and a large fleet of other major Canadian newspapers, and Nordstar Capital LP, owner of the Toronto Star and a number of smaller newspapers, had publicly confirmed the merger talks on June 27.
Those negotiations, which seemed to be in an advanced state but came with a caution that they were tentative and non-binding, could not be satisfactorily closed, the two companies said.
The proposed idea created a buzz as the two companies are among Canada’s largest media companies and came as the news industry is struggling economically.
Andrew MacLeod, the chief executive of Postmedia, said in an interview that the same challenges that prompted the merger concept were also obstacles to making it happen.
“There are so many things in flux right now, from Facebook pulling out (of distributing Canadian online news), potentially Google as well, the ongoing challenges of the industry — it is just really difficult to pull off a complicated merger in a very uncertain environment,” MacLeod said.
“And that’s certainly the case for the industry right now.
“We worked really hard and there was good will and good intent from both groups, but it is just too challenging and too uncertain an environment right now to make all the models work.
“The need for creative solutions and foundational transformation in our industry remains. Our continued focus is on protecting and ensuring Canadians’ access to reliable information.
“By levelling the playing field with the tech giants and creating a healthy ecosystem, we can ensure that the media industry and journalism remain vibrant, diverse and resilient in Canada.”
Nordstar, in a written release, said “the added backdrop of regulatory and financial uncertainty” led to the decision to end negotiations.
“These are challenging times for media companies, but we intend to keep working hard to give Canadians the news they need to stay informed, which is essential to our communities and to the functioning of our democracy,” Jordan Bitove, owner of Nordstar and publisher of the Toronto Star, said in the Nordstar statement.
Both companies face economic hardship during increasing digitalization of news, which has meant cuts, layoffs and cost reductions.
MacLeod and Bitove described the influence and power of technology giants in news distribution as an “existential threat” to reliable news media.
Both companies previously announced they were stopping direct advertising on Meta-owned platforms, joining several other entities, including the federal and Quebec governments, that are boycotting Facebook and Instagram over Meta’s decision to block Canadian news.
Meta-owned Facebook and Instagram said it will stop sharing links to Canadian news in response to the federal government’s Online News Act.
The Online News Act passed in June and takes effect later this year. It will obligate tech companies to reach commercial deals with news publishers to share revenue for news stories that appear on their platforms, while those companies that do not link to Canadian news stories are exempt.
