Income trust rule changes will affect magazines

No matter what happens on the financial markets this morning as a result of the government's surprise decision on income trusts (taking away much of their tax advantages) it will impact the magazine industry. As but two examples (some readers may suggest others), consider Rogers Media, which had recently become a partner with Aeroplan, the Air Canada points system, an income trust that was allowing purchase of magazine subscriptions using points. And Osprey Media, Michael Sifton's clutch of small newspapers and magazines, which has been struggling to meet its payouts even with the previously favourable rules and must now be faced with reconsidering the whole idea.

This income trust announcement probably won't take the gloss off the results announced by Rogers yesterday, in which its third quarter results were up 14.7% and profits up 33% and the company announced a stock split and a hike in its dividend. (It announced that even its media holdings were up 12.2%, but keep your shirt on, much of that was not the result of a surge in magazine publishing but the result of ad revenue associated with the World Cup of Soccer and Blue Jays baseball on Sportsnet.)