On Nov. 13, City Council’s Executive Committee approved a recommendation from Administration to renew its agreement with Postmedia "for the provision of print and online advertising services for a three-year period ending December 31, 2021, for an amount not to exceed $3.5 million, including GST."
In 2012, Executive Committee approved the first such three-year agreement with Postmedia. They renewed it in 2015 for another three years.
The agreement provides the City of Edmonton with discounted rates for both legally required advertising (such as notices about bylaws, resolutions, public hearings, etc.) and other types of advertising. "For over 20 years, the City has purchased legally required advertising exclusively from the Edmonton Journal," reads the latest report.
The Edmonton Journal was selected in part for its reach but also because until recently, the Municipal Government Act specified that legally required advertisements be published in the newspaper. Amendments to the Act now in effect enable municipalities to pass a bylaw to "use one or more other methods" for such advertising, including "electronic advertising such as advertising on the municipal website."
I spoke about this at Executive Committee on Tuesday, to offer context and to share my thoughts on the proposed agreement. There was broad agreement from the Councillors in attendance that times have changed and that new alternatives should be explored. Administration also recognizes the potential for a different approach and has struck a cross-departmental sub-working group to develop a bylaw to take advantage of the recent MGA amendments. "As the approval and implementation of the updated bylaw proceeds, it is likely that the City will transition to digital advertising and will decrease reliance on newspaper advertisements as pre-authorized through this report," the report said.
Since 2008, the City of Edmonton has spent well over $7 million on advertising in the Edmonton Journal, an increasing percentage of which is for legally required advertising (72% this year). Given the declining print reach of the Edmonton Journal, and the City of Edmonton’s own substantial digital reach, this spending is effectively a subsidy to a single outlet.
With recent legislative changes, the City has an opportunity to instead invest some of that money in outlets like Taproot that are building a brighter future for journalism right here in Edmonton.
While the City is renewing its agreement with Postmedia for now, Administration anticipates returning to Council by Q3 2019 with a proposed bylaw to open the door to alternatives.
Taproot will continue to provide updates on this story in our Council and Media roundups. Read the latest editions and sign up to get them delivered to your inbox.
Here are my remarks in full:
Mayor Iveson, members of Council, thank you for the opportunity to speak to you today.
I’m here to ask you to reconsider moving forward with the status quo represented by this agreement.
A couple of years ago I started Taproot Edmonton with Karen Unland to do something about the decline in local media here and around the country.
I’m sure you’ve heard a little about what ails the media, but let me share some clear numbers with you.
More than 250 news outlets across Canada have closed in the last 10 years, and more than 16,000 jobs have been lost in the media sector since 2008. Here in Edmonton we’ve witnessed our share of closures and job losses in that time, including the three dozen people were laid off when Postmedia merged the Sun and Journal newsrooms in January 2016, and the subsequent rounds (yes, that’s plural) of buyouts and layoffs, most recently in August 2018. And that’s just at Postmedia. You need only attend a news conference or two in the city to see how few journalists are actually covering day-to-day news anymore.
Yes, the traditional media’s loss of advertising is a big part of the reason this has happened. Online advertising will account for more than half of all ad sales in the United States this year, surpassing $100 billion for the first time, with Google and Facebook account for nearly 70% of that. The story is similar here in Canada.
Advertising dollars have shifted to the tech giants because their platforms are the most effective way to advertise online. The ability to specifically target and measure is unlike anything we’ve seen before.
Despite this, the City of Edmonton spends hundreds of thousands of dollars each year on advertising with local media outlets like Postmedia, as well as television and radio stations.
In the 1950s, more newspapers were sold in Canada than there were households. Today, fewer than one in five households pays for newspapers.
This is not due to a lack of interest in the news. The Standing Committee on Canadian Heritage said in its report published in June 2017 that "a majority of people want more local news and more coverage of their issues and their community."
It’s because attention has shifted online. Especially when it comes to global issues, never before has there been such a large and diverse number of news and information sources available to us. Locally though, the picture is not so rosy. According to the Public Policy Forum’s Shattered Mirror report, "the incumbent news media are weighed down by both their cost structures and cultures of speaking at the public. It will not be enough to preserve the old forms of civic-function journalism…news journalism will have to evolve."
I’m pleased to see in the report that Administration plans to look at alternative options for legal advertising. The newspaper has not reached "substantially all residents" as required by the MGA in quite some time. Taproot would love to be part of a discussion on how we can more effectively use technology to get the right information to the right Edmontonians at the right time.
I could talk to you about leveling the playing field and how this agreement and others like it are subsidizing my competitors. But it’s actually worse than that. Instead of propping up local reporting, this agreement will serve to funnel additional local money out of Edmonton and into the pockets of executives in eastern Canada and the American hedge funds that own their debt.
Postmedia owes its creditors more than $280 million, all of which is due by the summer of 2023. That’s why they’ve continued to make cuts and close newspapers across the country. It’s especially appalling that these cuts have come as Postmedia’s top executives have continued to receive pay raises, with a 33% increase in 2017 alone. All this while the quality and quantity of product they put out has continued to decline, despite the efforts of some talented and dedicated local journalists. CEO Paul Godfrey, who makes $1.7 million per year, said in February 2017 that his papers aren’t as good as in the past but added “they haven’t become unacceptable.”
A recent report from the Public Policy Forum called Mind the Gaps suggested government shouldn’t bail out the news industry, but instead should ensure "democracy is well-served by having a robust means of specifically informing citizens of civic activities in their communities."
It is in that spirit that I ask you to consider not approving this agreement. The status quo it represents neither reaches a substantial number of Edmontonians nor uses taxpayer dollars effectively or locally. There’s no need to wait until Q3 2019 to have a positive impact with a different approach. Paying Postmedia for legally required advertising is effectively a subsidy to a single outlet. The opportunity here is to consider whether that subsidy should be reduced and whether it could be spread across multiple outlets, especially those who will invest the money in building a brighter future for journalism right here in Edmonton.