Newspaper closures are about eliminating competition, not cutting costs

It’s easy to misinterpret this week’s deal to close a series of community newspapers as another symptom of a declining media industry that needs a bailout or some other drastic action or support. The theme is very familiar, after all: we’ve heard stories of media cutbacks and discontinued publications for years.

But that’s not what happened when Postmedia acquired a group of weekly newspapers and then closed them down.

If there was something wrong with those papers, they would have been discontinued by their previous owner. The purpose of this transaction was not to cut costs but to eliminate competition. It allows the Citizen to go after all the major retailers who were distributing flyers in the weekly community newspapers and try to win their business. It would be the same if a major grocery chain bought one of its competitors and shut down all their locations in order to drive business to their stores. So the calls for the government to invest money in the media industry are misplaced. This was a ruthless competitive move, not a desperate cost-saving measure.

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