A ballsy move by Nova Scotia’s first family of newspapering

 

Sarah Dennis and Mark Lever, co-owners of the Halifax Chronicle Herald, have been showered with abuse for their handling of a 14-month strike by the Halifax Typographical Union. Today, they stunned critics and admirers alike by purchasing all of Transcontinental’s newspaper properties in Atlantic Canada.

A union spokesperson was quick to denounce  the purchase, saying it put the lie to the family’s claim it could ill-afford to settle with the union on less than harsh terms.

On the contrary. The surprise purchase demonstrates the couple’s commitment to local print news in our region, and puts the lie to addlepated, reality-averse commentary about the strike from Tim Bousquet, Steve Kimber, Graham Steele, and other members of Halifax’s lefty commentariat.

The union’s sympathizers have done the strikers no favour by turning an unseeing eye to the internet’s demolition of the newspaper industry revenue model. A cornucopia of free online news has eviscerated display and classified ad dollars, replacing them with online clicks that yield tiny fractions of a cent. Long accustomed to oceans of cash, this industry can no longer support $80,000 salaries with no heavy lifting.

The hard reality—the truth no one in the media will speak—is that neither side wants the Herald strike to end:

  • Lever and Dennis are saving a fortune, putting out a paper with a skeleton staff, while incurring no obvious strike-related impact on circulation numbers.
  • Most of the strikers have received layoff notices. They know they will never return to jobs at the Herald, but as long as they continue to picket, they will collect $600+ per week in strike pay. With a few exceptions, the most talented among them have already found work elsewhere, in journalism or communications.

Several union blunders ossified its untenable position in the early days of the strike. Despite knowing for at least a year that a strike was coming, the HTU took months to get its online journal up and running. Once launched, the LocalXpress proved a credible vehicle, but for additional crucial months, it refused to accept advertising.

Incredibly, the union actually picketed companies that might have supported it with ad revenue, denouncing them as “scabvertisers” for not immediately bailing on the region’s biggest daily. At one point it even picketed Halifax Mayor Mike Savage for attending a meeting where Lever was scheduled to speak. Instead of trying to build community support for a settlement, the union sought out infidels to expose and denounce.

Here are a few educated assumptions about the Transcon sale:

  • Lever and Dennis got these properties for a ditty, because getting them for a song would have meant overpaying.
  • They used borrowed money, because the Herald’s calamitous economics over the last decade had depleted the family fortune.
  • Whoever lent them money saw a business plan that was credible enough to support a decision to provide financing.

All this reinforces my assumption that the couple’s unyielding strike strategy has stabilized the Herald’s operating statement.

Lever and Dennis have created a new entity, SaltWire Network, registered just three weeks ago, to run the 35 media properties they now control. The consolidated operations may yield some modest economies of scale, but to make this work in the long run, the new owners will be tempted, and their newly acquired union employees will be chastened, by the brazen example they set with the Herald strike.

A story posted on the Herald website today quotes Lever as saying all current Transcon employees will be offered positions “in the same capacity with the same salary and same benefits that they have now.” Successor rights leave him little choice but to do that. When current collective agreements expire, all bets will be off.

There will always be a market for news and stories, but a growing consensus doubts the longterm market for printed newspapers. Lever and Dennis are placing a big contrarian bet against that belief. They’re gambling the public appetite for local stories will support the newspapers they have snapped up at distressed prices.

I hope they’re right. It’s a ballsy move by a couple that has braved public obloquy with a string of ballsy moves.

 


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