Knives Out at the Montreal Gazette

Newsroom will lose 25 per cent of its staff and most of its photo department as signs point to a serious cash crunch at Postmedia

The Montreal Gazette. In a kaleidoscope.

AUTHOR’S NOTE: I worked as a unionized employee of the Montreal Gazette for eight years and cultivated friendships among many of those facing job losses. Even so, I made every effort to contact Gazette management and Postmedia executives in hopes of better understanding the situation. They chose not to be interviewed for this article.

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"It's a bloodbath, I've never seen anything like it."

The Montreal Gazette reporter didn’t mince words when asked about layoffs at Quebec's oldest daily newspaper. Even if you account for an aging scribe's penchant for drama, a half dozen sources at the Gazette describe a paper on its last legs. 

Since parent company Postmedia Network ordered the Gazette to cut payroll by 25 per cent last month, three of the newsroom's 19 remaining journalists have applied for a voluntary layoff. If more volunteers don't step forward, job cuts will go in order of seniority — meaning the Gazette could lose its only two journalists still in their 30s and its one business reporter. Given that the deadline to apply for severance has been pushed back from Tuesday to Friday at 5 p.m., the paper hasn't yet met its layoff quota.

The cuts will effectively kill the Gazette's photo desk. Two of the department's four remaining employees — both of whom are award-winning photographers with decades of experience — will lose their jobs. Because union rules forbid reporters from taking pictures, the paper will lean almost exclusively on file photos and the Canadian Press wire.

And in the likely event that one photographer calls in sick while the other is on vacation, there will be days when the Gazette doesn't produce any original photojournalism.

Management won't be spared by cuts either. Two of the five managers still working at the Gazette are expected to be laid off, leaving only editor in chief Bert Archer alongside a print editor and digital editor as the only people overseeing day to day operations. 

Archer politely declined The Rover’s request for an interview.

This information comes from 10 sources inside Postmedia, the company that owns Montreal Gazette and employs some 650 journalists at newspapers across Canada. Founded 13 years ago by former Toronto Sun president Paul Godfrey, Postmedia emerged from the ashes of Canwest — a short-lived newspaper empire that filed for bankruptcy protection in 2010.

Postmedia purchased Canwest’s properties, including the Gazette, in a $1.1 billion deal made possible by the backing of an American hedge fund. Though the purchase made Postmedia one of the biggest players in Canadian media, it also came with a whopping $500 million in debt. During Godfrey’s first year at the helm, he cut 500 jobs across the network and centralized all of its daily newspapers’ pagination, final edits and layout to offices in Hamilton and Toronto. That marked the beginning of a downward spiral that continues to this day.

Godfrey did not respond to The Rover’s interview request.

Cashflow at Postmedia may be reaching critical levels. Last fall, the Gazette suspended free delivery of its newspaper to current and former employees and as of January the paper stopped paying for a reporter to cover the Montreal Canadiens’ away games. Neither of these were significant budget items.

Another red flag, the Gazette stopped printing its Monday edition late last year. The paper now publishes five issues a week, from Tuesday to Saturday.

Perhaps what's most alarming is that, unlike in previous rounds of cuts, Postmedia hasn't offered its workers voluntary buyouts. Under a buyout, employees get salary continuance for up to 78 weeks. A layoff severance caps out at one year. The company is also pulling out all the stops to avoid paying for the layoffs in lump sums. If a worker opts to take salary continuance, they can keep their medical benefits for up to a year and their pay will mirror any overtime or night shift bonuses they earned over the past 12 months.

Neither of those benefits will apply to those receiving a lump sum.

"They have a number of cuts they need to reach and they don't care how much damage they inflict on their newspapers in order to reach it," said one source, who started at the Gazette over 30 years ago. "With these voluntary layoffs, they're pitting us against each other. There's some tension between younger reporters who feel their senior colleagues should step aside and save the future. And I get that. But older workers have a right to work too."

Meanwhile, at Postmedia headquarters in Toronto, CEO Andrew MacLeod has collected at least $5.5 million in salary and bonuses since 2020. Under MacLeod's leadership, Canada's largest newspaper chain lost $74 million last year despite collecting $21 million in government bailout money and another $14.5 million in tax credits since the beginning of the pandemic.

MacLeod's track record of losses and layoffs notwithstanding, he's seen as an invaluable ally to the New Jersey-based hedge fund that owns 66 per cent of Postmedia's shares. Stock in the newspaper chain rose from about $1.15 per share when MacLeod took over in 2019 to $1.55 at end of trading Tuesday.

Postmedia did not return The Rover’s request for an interview with MacLeod.

Though cost cutting might seem like a shrewd move to investors, it could spell doom for the paper. In the event of a strike or labour dispute, Quebec law would only allow the Gazette’s three remaining managers to produce the paper each day. They could rely on freelance labour to fill their needs but any writer seen crossing the picket line will effectively be blacklisted by the national union.

Given that the Gazette workers’ contract expires in 2024 and that their wages have been frozen for three years, a strike is plausible. And sources inside the union say the Gazette worker’s strike fund could last them two years. Should the dispute continue, they’d be backed by their parent union the Communication Workers of America and its $500 million strike fund. Simply put, Postmedia would likely have to shutter the Gazette in the event of a prolonged work stoppage.

Throughout its tenure as Canada’s largest newspaper chain, Postmedia has boosted its share price by buying up media properties, merging newsrooms, laying off workers and increasing its market share. Most notably, in 2015, the company purchased 173 Sun Media papers from Quebecor Inc. in a $316 million deal that made it Canada’s largest digital and print media company.

Last year — despite still holding some $260 million in debt on the books — Postmedia purchased New Brunswick’s three English daily newspapers off the Irving family. Shortly after the $7.5 million acquisition, Postmedia cut publication of its New Brunswick papers to just three days a week.

Though news of the Gazette’s troubles has rallied Montrealers behind their only English language daily, its fate remains firmly in the hands of Postmedia. 

“Here’s the crazy part in all this, the Montreal Gazette still turns a profit. Why would Postmedia let it go,” said one former Postmedia executive, who spoke on the condition of anonymity. “If some local investor could someone convince Postmedia to part with the Gazette — which they can’t — the new owners would have to invest millions to staff the paper. Because so much of the production cycle happens in Toronto and Hamilton, the Gazette isn’t really its own paper anymore. They don’t have their own layout team, line editors and they need Postmedia’s arts, life and sports stories just to fill the paper. And it’s not exactly a thick paper.”

Even so, Montreal businessman Mitch Garber told The Rover he’s willing to “play a part” in efforts to save the Gazette.

“I think, given the distinctness of our society, the Gazette should have local ownership,” said Garber, a lawyer, investor and minority owner of the Seattle Kraken hockey team. “Do I have a plan? No. But I want to do what I can to help. I am a capitalist, I believe in smart investments and I know that investing in the print news business isn’t a big money making investment. But some things are more important than money and I think this city needs an English language daily.”

No matter what Postmedia’s shareholders say, the model of mass media ownership is an abject failure. Though the chain gets its share of heat for layoffs, there have been massive cuts at Bell Media (which owns CJAD radio and CTV Montreal), Global News and Torstar. Study after study has linked the decline of local newsrooms to an increase in municipal corruption, less competitive elections and a drop in city budgets.

Shortly after layoffs were announced last month, an ad-hoc group calling itself Friends of the Gazette began meeting to try to pressure Postmedia into sparing the Montreal newsroom. Although the chain is cutting 11 per cent of its staff across Canada, the Gazette is expected to shed 25 per cent of its workforce. 

The group has enlisted local, provincial and federal politicians and launched an online petition last week that has 2,300 signatures as of this morning. As a sign of how “out of touch” McLeod is, two sources say the CEO believes the petition might help the Gazette’s subscription numbers.

Liberal MP Anthony Housefather, whose riding is in the heart of anglo Montreal, has spoken to MacLeod and Postmedia Chairman Jamie Irving in hopes of mitigating the damage.

“We’ve had multiple conversations and they’ve been productive,” said Housefather. “I can’t get into specifics because I don’t want to harm any of these talks but we want to see if we can save some jobs and get the community more involved with the newspaper.”

As a former politician who sometimes found himself on the wrong end of a Gazette story, Russell Copeman says he never doubted the newspaper’s role in Quebec life.

“There were times where I felt the Gazette’s reporting missed the mark but I always knew I could pick up the phone and call the reporter,” said Copeman, the former mayor of Côte-des-Neiges-Notre-Dame-de-Grâce. “And I knew I’d be listened to, that there might be a follow up story with more context and that the paper and its reporters would act in good faith. Even when I disagreed with the Gazette, it plays an important role in our community. 

“To this day, whether it’s Aaron Derfel’s reporting on healthcare or their political coverage, the Gazette’s journalism has an effect on public policy. To see that diminished because of these Draconian cuts is just awful.”

Sources in the Gazette’s newsroom say morale is the lowest its ever been, with editors and reporters actively looking for work at another outlet or in another industry. Workers have called in sick and many say they’re dealing with severe depression and anxiety. There’s also been infighting between managers and workers but also between union members themselves.

Despite this, the Gazette’s skeleton staff continues to put out a quality paper five times a week and update their site countless times each day. But they’re doing so in an atmosphere of constant uncertainty.

“We don’t want to become another one of Postmedia’s ghost papers, where the product says ‘Montreal Gazette’ but really it’s just content from the parent company in Toronto,” said one reporter, who wished to remain anonymous for fear of losing their job. “Everyone’s been pushed to their limit. Now they want to bleed us even more?”