The Southern Ontario/WNY Radio-TV Forum » Stunning Sale: Toronto Star Sold For $52 Million

RadioActive · May 26, 2020 8:54 pm

Torstar will be taken private, but will it remain the Liberal mouthpiece it's been for over a hundred years? And what it will it mean for those still working there, as newspapers fall on hard times? Time will tell whether you'll read about it in The Toronto Star.

“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” John Honderich, chair of Torstar’s board of directors, said in a press release announcing the transaction.

Torstar to be sold, taken private in $52-million deal

Chrisphen · May 26, 2020 9:10 pm

It's through. It might be like Postmedia and shuffle around in an undead state for a few years, but the end is certain.

Dale Patterson · May 26, 2020 11:27 pm

$52 million? That doesn't sounds like a lot. I thought TorStar would be worth a lot more, but I guess not.

RadioActive · May 26, 2020 11:55 pm

Dale Patterson wrote:
$52 million? That doesn't sounds like a lot. I thought TorStar would be worth a lot more, but I guess not.

You know what? I had the exact same thought. Is it really worth that much (or that little as the case may be) or did the current owners read the writing on the newsprint and decide to get out when the getting is good? Love to have been the proverbial fly on the wall as they decided on the amount.

Dale Patterson · May 27, 2020 12:12 am

Normally these business deals are in the billions. I thought it might be a typo but every outlet is reporting the same price. They basically gave it away.

Last edited by Dale Patterson (May 27, 2020 12:12 am)

paterson1 · May 27, 2020 6:05 am

Not a lot of money for a company that owns seven daily newspapers and 70 weeklies along with all the corresponding websites. Fairfax which was headed up by Paul Rivett, one of the new owners already owned a fairly big chunk of Torstar, but $52 million for this deal is not a lot of money. In 2000 Torstar had a value of about $2 billion.

It will be very interesting to see what happens over the next year to Torstar. Rumour has it that former premier David Peterson will be appointed as vice chair of the company. New owners also say that they will uphold and adhere to the" Atkinson Principles" which have been a cornerstone of the Star's editorial policy for decades.

Last edited by paterson1 (May 27, 2020 7:10 am)

Dial Twister · May 27, 2020 9:59 am

Dale Patterson wrote:
$52 million? That doesn't sounds like a lot. I thought TorStar would be worth a lot more, but I guess not.

The buyers undoubtedly bought the 'debt' too, so $52 million free and clear may be a godsend for the majority shareholders.

RadioActive · May 27, 2020 10:37 am

I heard on the radio this morning that Torstar shares, which only a few years ago were as high as around $30 or more, are now down to just 63 cents a share. It's small wonder the owners were ready to get rid of it. Whatever you feel about its content, I'm sad to see such a giant newspaper brought to this.

Tickle Trunk · May 27, 2020 11:56 am

At that price, they should have thrown in Corus.

Broodcaster · May 27, 2020 4:00 pm

At 63 cents a share it is a bargain and could prove very profitable if the feds stop Facebook and Google from sucking up all the ad dollars. Kind of surprised this didn't happen sooner.

Tickle Trunk · May 27, 2020 4:17 pm

Broodcaster wrote:
if the feds stop Facebook and Google from sucking up all the ad dollars.

Exactly how much power do you want to acquiesce to the Feds? Let them control everything??

RadioActive · May 27, 2020 4:55 pm

Meanwhile, Post Media just cut 40 full time workers, in a place that was already running pretty lean.

From the memo sent to staffers on Wednesday:

"Unfortunately, our request for a temporary salary reduction was not supported by the unions and we were unable to find mutually agreeable common ground on alternative cost reduction measures. Given the scale of the crisis, and the unprecedented level of revenue declines, it was very important to me that the burden of cost containment be shared fairly across the company. As such we are necessarily moving forward with approximately 40 permanent reductions in accordance with the terms of our collective bargaining agreements."

You can read the full internal memo to staff here.

Tickle Trunk · May 27, 2020 5:12 pm

RadioActive wrote:
Unfortunately, our request for a temporary salary reduction was not supported by the unions and we were unable to find mutually agreeable common ground on alternative cost reduction measures.

And.......... THAT'S why I hate unions. Given the choice between a salary reduction or termination, they chose the nuclear option.

RadioActive · May 27, 2020 5:26 pm

Sadly, I agree with you. There are some reasonable unions. This obviously isn't one of them. The choice of unemployment vs. a salary cut sounds like a no-brainer, especially at a time when there are so few jobs around - not to mention the COVID crisis. A pay cut may be temporary. Job losses are almost certainly permanent..

It reminds me of an old joke that Woody Allen once told during his stand-up days. He said his father gave him a part-time job at his store during the summer just to give him something to do. "I organized the workers," he said. "And we went on strike and drove him out of business."

It's a funny line until you read something like what happened at the Post.

paterson1 · May 27, 2020 7:48 pm

Torstar didn't have any debt or very little. They had been selling off facilities (Toronto Star properties, Hamilton Spectator, Guelph Mercury, Harlequin etc.) for years. They did have a lot of great real estate that they had sold. Years ago they made a good dollar selling their 20% chunk of CTV.

All of this kept their financial books in decent shape even though they had been losing money on the business. I know in their last financial statement they didn't have any debt, unlike Post Media that owes over a billion in debt repayments.

Various Torstar pension obligations were moved, sold and taken over a few years ago by CATT pensions, so this is not a liability that the new owners need to worry about.

So even though $52 million for the whole company isn't a lot of money, Torstar, to their credit haven't left their pensioned employees in a bad situation and the new owners aren't inheriting a lot of debt which is rare. Looks like they have been planning this sale for a while.

Media Observer · May 27, 2020 8:59 pm

Another look at this:

https://blog.fagstein.com/2020/05/27/torstar-sold/

Broodcaster · May 27, 2020 9:09 pm

Tickle Trunk wrote:
Broodcaster wrote:
if the feds stop Facebook and Google from sucking up all the ad dollars.
Exactly how much power do you want to acquiesce to the Feds? Let them control everything??

Nothing the feds don't already have. Fix the tax system so that Canadian advertisers seeking a Canadian audience are no longer permitted to write off ads they place in U.S. digital media. Those dollars could go to Canadian print and broadcast news websites. Also, force the Facebooks and Googles to contribute to the Canadian Media Fund and Independent Local News fund like the CRTC requires domestic media companies to do. Other countries are doing something similar already.

Saul · May 27, 2020 9:56 pm

Media Observer wrote:
Another look at this:

https://blog.fagstein.com/2020/05/27/torstar-sold/

A cogent, well thought out analysis...

paterson1 · May 28, 2020 12:30 am

RadioActive wrote:
I heard on the radio this morning that Torstar shares, which only a few years ago were as high as around $30 or more, are now down to just 63 cents a share. It's small wonder the owners were ready to get rid of it. Whatever you feel about its content, I'm sad to see such a giant newspaper brought to this.

Torstar stock has had a long slow decline. It actually was $30 a share 16 years ago in 2004. 2011-12 had a bit of a rebound to $15 and then the decline continued down to penny stock around 2018. But as mentioned before they did keep actual bank debt zero all this time, by selling off facilities, land and properties like Harlequin interest in CTV. So even now financially the new owners have inherited a company with little or no debt.

paterson1 · May 28, 2020 12:40 pm

A little more detail in this article from the National Post. Apparently Torstar still had $70 million cash in the bank, which the new owners won't be entitled to. They are buying a company that financially at least was not in the red.

For now, according to the article, it looks like the Star will also be keeping it's current editorial stance. The other daily papers in the chain do not necessarily adhere to the Atkinson Principles like the Toronto Star.

https://business.financialpost.com/news/burning-cash-for-years-pair-acquiring-torstar-eye-growth-while-vowing-to-keep-progressive-values

mike marshall · May 28, 2020 2:24 pm

paterson1 wrote:
They are buying a company that financially at least was not in the red.

Even better, according to the Post article:

>> Torstar had a cash balance of $70 million at the end of the first quarter of 2020, and no bank debt, a balance sheet that short seller Jerome Hass of Lightwater Capital Partners called “sweet” in light of the $52 million that Rivett and Bitove paid for the company. “You are effectively paying the buyer $18 million to take this company off your hands,” he told the Post. <<

Also interesting, nothing about Torstar's sale on CBC's National broadcasts Tuesday evening or last night. I'd agree with RA, this was a huge story.

RadioActive · May 28, 2020 2:42 pm

More bad news from the broadcasting industry. CBS News has cut at least 50 jobs from a staff of about 500. The so-called "Tiffany Network" has been struggling with the COVID crisis and just merged with Viacom. And as too often happens after such a big conjoining, the company looked to immediately cut costs. (Despite their pronouncements, this is what I worry about at the Star after the takeover. But we'll see.)

"There isn’t a single person leaving who did a bad job," network president Susan Zirinsky said. "It’s economics. It is absolutely the financials that has forced us to make these decisions. ... I’m really sorry. There is not a person who won’t be missed.”

CBS' nightly newscast has been in dead last place for years, well overshadowed by NBC & ABC.

"Everyone Is Shocked": CBS News Hit Hard by Layoffs

paterson1 · May 28, 2020 5:25 pm

Actually I don't recall CTV news with Lisa Laflamme covering it either, it wasn't on last night, I don't remember seeing anything on Tuesday either, but I could be wrong. It was all over local Toronto news on all channels on Tuesday late news. CTV Kitchener did give it a brief report in business since the Waterloo Region Record is owned by Torstar. The sale was on both the CBC and CTV websites.

Another report had the price of $25,555,000 that the five families (Atkinson, Hindmarsh, Campbell, Thall and Honderich) paid for the Star in 1958. This was the highest amount at the time ever paid for a Canadian newspaper.

Last edited by paterson1 (May 28, 2020 5:48 pm)

Tickle Trunk · May 28, 2020 5:37 pm

Maybe because, as illustrious as a history the paper had, the national networks didn't think a Toronto-centric whoa is me story was interesting. Shocking as it may be, the entire country has little interest in John Tory's circle-marking in park city.

AMFM · May 30, 2020 1:30 pm

Personally I'm not sure why anyone would want to buy a newspaper during these times. What's next? Buying the local blacksmith shop. These buyers must know something we don't know.

Radiowiz · May 30, 2020 7:15 pm

AMFM wrote:
Personally I'm not sure why anyone would want to buy a newspaper during these times. What's next? Buying the local blacksmith shop. These buyers must know something we don't know.

Bad analogy.
Actual newsprint might be the afterthought now.
Maybe they've figured out how to get better banner advertising for their online content or something.
One thing for sure, I'm not spending a single penny until I see the BOX price on Saturdays drop back down to $2.

Remember, it's not a "newspaper" they're buying as much as it is news content in general.

RadioActive · July 9, 2020 12:07 pm

Not so fast!

Another bid for Torstar emerges, this one for $58 million

My favourite part of this new story - it was first reported in the Globe & Mail.

paterson1 · July 9, 2020 12:30 pm

It was first reported in the Globe and Mail likely because it isn't a formal bid as yet. So far it is speculation and talk that this group will actually put the offer in for Torstar. When and if they do, the Star will report on the story..

RadioActive · July 9, 2020 12:36 pm

paterson1 wrote:
It was first reported in the Globe and Mail likely because it isn't a formal bid as yet. So far it is speculation and talk that this group will actually put the offer in for Torstar. When and if they do, the Star will report on the story..

I get why the Star couldn't be first to go with it, although they must have certainly been aware of it. It's just a strange irony that their competitor published it first.

Kind of like the same strange moment that occurred on Nov. 10th, 1989, when CKO, the all news FM network that ran across Canada, confirmed on their last ever newscast that they would be going off the air. I heard it a few minutes before that though on CKEY's noon round-up. In the end, they were beaten to their final story and one that uniquely concerned themselves by someone else!

Radiowiz · July 9, 2020 1:44 pm

Anybody else? Let's make this an auction while we're all at it.