Metro freepaper bumped by 24 Hrs from Gateway Newsstands on the TTC

Readers who are used to picking up their Metro freepaper in Toronto Transit Commission stations will be finding 24 Hrs in its place, starting next month.  According to a Globe and Mail story, Postmedia outbid Torstar for the three-year contract to stock 24 Hrs in Gateway Newsstands at more than 90 TTC and GO Transit stations. Metro, whose daily circulation has been about 500,000 copies  will still be available in boxes outside of the stations. 24 Hrs says it expects its 245,000 circ boosted by up to 35,000 by the preferred placement.

Craig Barnard, senior vice president of reader sales and service for Postmedia Network Inc. said “In the underground, at the Gateway stores, right at the trains and so on is a more beneficial distribution network, in our opinion.” 

“For 24 Hrs, it's an opportunity to re-establish itself in a strong way. And at the same time I think Metro … will be very capable of maintaining its brand without the distribution in the subway,” said Bill McDonald, the former president of Metro English Canada. “Overall, I think it could have a very positive impact on the free daily category in the Toronto market. And we could even see overall growth in readership.”

Postmedia acquired 24 Hrs as part of a deal in April by which it took over Sun Media Corp.'s English language publications. Metro English Canada had for many years had right on first refusal on the distribution contract. This year it was outbid by Postmedia when Gateway Newsstands issued a request for proposals. 

The Kit launches a new, interactive app

The Kit, the beauty and fashion online magazine has unveiled a new app for tablets and smartphones, which debuts with the February issue. The magazine now publishes 10 issues a year of the interactive magazine and the  app -- for iPad, Android and Kindle users -- now features 360-degree views of some items, such as being able to see a handbag from all angles.

The magazine, which is part of Star Media Group, a division of Toronto Star Newspapers Limited, has 100,000 app installs and 70,000 subscribers as well as e-letters and a weekly newspaper print supplement in select copies of the Toronto Star, Ottawa Citizen, Montreal Gazette, Edmonton Journal and Vancouver Sun. 

“Readers have new expectations with consuming digital media, and so we’ve redesigned our interactive magazine to fully utilize the multi-touch and multi-sensory experience that today’s technology offers,” said associate publisher Kelly Whitelock. “For advertisers there are opportunities to interact with readers in unique ways that are both meaningful and engaging.

Torstar affirms faith in print with takeover of full control of Metro newspaper chain

Torstar Corp., the parent company of the Toronto Star, has purchased virtually full control of Metro, the free weekday newspaper distributed in cities across Canada. Torstar announced the terms of the deal after markets closed Friday. It paid its partner Metro International SA of Sweden $51.5 million for 80% of its 50% share in the Free Daily News Group; Torstar now owns 90% of the business.

The Free Daily News Group publishes Metro in Toronto, Vancouver, Ottawa, Calgary, Edmonton, Winnipeg and London, Ont. It also publishes in Halifax in a joint venture with Transcontinental Media G.P. The combined daily readership of the chain is more than 1 million.

“We see this as a terrific opportunity to continue to build this growing, national franchise,” said Torstar president and CEO David Holland in an interview with the Star. “For the past decade, it's been a strong medium, attractive to both readers and advertisers. We think that will continue.”

He said the acquisition complements the rest of Torstar's media assets including Star Media Group, Metroland and other digital properties.

Lorenzo DeMarchi, Torstar's chief financial officer, said readership and advertising have increased steadily at Metro papers, and at $51.5 million, is a good investment.

“It's a reasonable price. It reflects the growth trajectory that the business has been on,” DeMarchi said. “Metro is a print medium that has shown strong growth. We continue to believe in print and Metro's a great example of that.”

Most recent NADbank figures for fall 2010 and spring 2011, the "read yesterday" readership among adults in the Greater Toronto area was 966,000 for the Toronto Star and 495,000 for the Toronto edition of Metro.

Torstar's Star Media Group buys startup digital beauty magazine The Kit

The Kit, a startup digital beauty and wellness magazine created by former St. Joseph Media staff has been purchased by Star Media Group (Toronto Star).

“We searched diligently for the best women’s lifestyle play for our audiences and advertisers,” Edward Greenspon, vice president of business development for Star Media Group and the Toronto Star, said in a release. “We liked what we saw in The Kit and are keen to get going right away in supporting it as a leading beauty authority on all platforms and extending it into the fashion space.”

The Kit, which was launched last fall, produces a content-rich digital magazine, including video, slide shows, and email newsletters.Giorgina Bigioni, president and publisher of The Kit (and former publisher of Fashion magazine) said the acquisition "will allow her team to dramatically accelerate plans and reach substantial new audiences.” There are also plans to add a print edition.

The deal is a letter of intent and still subject to negotiation and closing conditions. Star Media Group, whose holdings include the Toronto Star, Toronto.com, The Grid and joint ownership of Metro free daily newspapers, is a division of Toronto Star Newspapers Ltd., which is a subsidiary of Torstar Corp. It has recently redesigned and relaunched both Toronto.com and The Grid (formerly Eye Weekly).

The Kit has published its 3rd issue (Spring) and relaunched an expanded and improved companion website.  The publication has 30,000 subscribers (it's free to sign up), running well ahead of its launch estimates according to Bigioni. 

The magazine has about 160,000 visits over the first two issues (somewhat less than the 200,000 they'd aimed for), an impressive 2.5 million total page views, 19,000 users of its free app, 1,500 Twitter followers and l 1,900 Facebook fans, according to its media kit.

Torstar takes the long view with transition at Metroland

The outcome of an orderly succession planning at the giant Metroland Group division of Torstar Inc. results in Ian Oliver, the publisher of the Hamilton Spectator and executive vice-president of Metroland Media Group stepping into the presidency, succeeding Murray Skinner. According to a company release, Skinner, who worked for Metroland and Torstar for 32 years, steps down effective July 1, 2008. In the meantime, he and Oliver will work together on a transition.

Metroland Media Group dominates the publication of community and daily newspapers in Ontario and particularly in the Golden Horseshoe. Oliver, in addition to his duties with the Spec, heads the Metroland West Group, which includes 3 daily newspapers, The Hamilton Spectator, The Record and Guelph Mercury, more than 15 Community Newspapers, including the Oakville Beaver and Burlington Post; one of Canada's largest shows groups, Premier Consumer Shows; a specialty publication division; a magazine division; and 4 print facilities.

The magazine division includes Forever Young, City Parent, The Car Guide, the Boat Guide, eye weekly, East of the City, Boating Business, Real Estate News, and The Business Times.

Quebecor asks court to forbid Osprey Media from accepting higher bid

Quebecor Inc. is asking the courts to forbid Osprey Media Income Fund from considering or dealing with takeover bids from anyone else. This is aimed directly at the Torstar-backed bid by Black Press Ltd. of Victoria to up the ante for the Osprey newspapers and magazines; it topped the Quebecor bid by $1 a unit. Quebecor's application will be heard -- and defended -- at the Superior Court of Justice in Toronto on July 4.

Quebecor, which had at one point entered into an agreement with Torstar to carve up Osprey between them, says it believes that once Osprey accepted their bid at $7.25 a unit, they were at a standstill and unable to deal with anyone else (something that Osprey unitholders might disagree with when faced with an $8.25 offer from Black Press).

Osprey says its deal with Quebecor contains the customary provision that it could accept higher, unsolicited bids in certain circumstances. Clearly, Quebecor thinks this bid is not so much unsolicited as payback from the jilted Torstar (see earlier posts).

Osprey Media Income Fund still in play and the price keeps going up

The sale of newspaper and magazine company Osprey Media Income Fund looked like a slam dunk for Quebecor Media, leaving a bruised Torstar group sulking in the corner. Torstar and Quebecor have been squabbling about who did what to whom and about whether or not they had a deal to split up the Osprey properties, which include well-known dailies like the St. Catharines Standard and the Kingston Whig-Standard.

Now, through its subsidiary, Black Press of Vancouver, Torstar has topped Quebecor's bid by $1 a unit or $404.5 million compared to Quebecor's offer of $355.5 million. (Torstar owns 19.4% of Black Press.

A story in the Toronto Star says Quebecor has until July 5 to better that offer. All of which is good news for the unitholders of the Osprey Trust, but only goes so far. When it was first created the Osprey units went for $10. Even the richer Black Press offer only brings this to $8.25.

Quebecor is now crying foul, saying that Osprey had a "standstill agreement" that prevented it from seeking other buyers. Osprey says that's nonsense.

Whatever happens, a whole stable of mid-sized newspapers and magazines (including the former Town Media Group (Hamilton magazine etc.)) will be subsumed inside one or the other of Canada's print media giants.

Carving up Osprey Media turning out messy for Quebecor and Torstar

A cosy deal to carve up the Osprey newspaper and magazine empire seems to have gone badly awry as Torstar Inc. has cried foul about Quebecor Corp.'s purchase of all the assets, including such venerable newspapers as the St. Catharines Standard and the Kingston Whig-Standard and a clutch of magazines.

According to a story in the Globe and Mail, the two conglomerates agreed in late 2005 to divvy up the titles; Quebecor later backed out of the deal, or says it did. But in filings by Quebecor with securities regulators, Torstar is said to be contending that Quebecor didn't terminate the agreement and Torstar continues to have the right to acquire pieces of Osprey. Torstar has refused to comment.

Though Torstar isn't named specifically in the filings, Quebecor confirmed yesterday Torstar is the company referred to as "the Joint Bidder" in the regulatory filings.

The regulatory filings indicate Quebecor chief executive officer Pierre Karl Péladeau and Torstar CEO Rob Prichard sent numerous letters to each other arguing the matter.

"The chief executive officers of the Joint Bidder and [Quebecor] exchanged several letters wherein the Joint Bidder asserted that [Quebecor] had not terminated the 2005 agreement," the documents say.

"In the course of 2006, [Quebecor] considered several new proposals put forward by the Joint Bidder relating to [Osprey], but none of these resulted in any new agreement."

Sources indicate Torstar is arguing that the wording of a letter sent by Quebecor announcing it was pulling out of the agreement suggested the two sides would be working together in the future.

Torstar has interpreted that as an indication the Osprey agreement is still intact.

Osprey Media bought by Quebecor

Quebecor Media has purchased Osprey Media Income Fund for $517 million.

Michael Sifton put together the Osprey Media chain of newspapers and magazines out of the smaller dailies and weekly newspapers and magazines that CanWest Media either didn't want or wanted to sell to pay down debt from buying Conrad Black out of his Hollinger empire. In all, Sifton's company bought 54 newspapers, including the St. Catharines Standard, Peterborough Examiner and the Kingston Whig-Standard. Along with them, he acquired some local magazines, one national title (Vines magazine) and later added the Town Media group out of Hamilton (flagship: Hamilton magazine).

He very profitably converted this tidy empire into an income trust and, for a time, was very successful, according to a story in the Globe and Mail.

Backed by venture capital supplied by the Ontario Teachers Pension Plan and Bank of Nova Scotia, the strategy was to build an empire of small Canadian papers that would churn out consistent payouts to investors. But fierce competition in Ontario from Toronto-based Torstar Corp. has sent the units tumbling nearly 45 per cent to $5.55 since their debut.

The sale brings to an end more than a century of newspaper publishing for the Sifton family. Mr. Sifton is great-grandson of Sir Clifford Sifton, a federal cabinet minister who bought the Winnipeg Free Press in the 1890s.

Stalling revenues meant that the company had to cut its distribution to unit owners in late 2006. Then it was hit with another whammy as the federal government announced that it was going to eliminate the tax advantages of the trusts by 2011. Speculation immediately began that the company was on the block and, in March, Sifton confirmed this. However the smart money was on the possibility of Torstar Corporation buying the chain to add its stronger properties to the ballooning Metroland chain. In fact, it has been fierce competition from Torstar that had helped, in part, to pare down revenues for Osprey and put it in play.

Quebecor paid the equivalent of $7.25 a share, a 30.6-per-cent premium over the closing price of the units on March 5, before Osprey announced it was reviewing its strategy.

Essentially, the purchase means that the Osprey papers will be rolled into what is sometimes called the Sun chain, although it includes Le Journal de Montreal and Le Journal du Quebec, the London Free Press as well as the Suns in Toronto, Ottawa, Calgary, Edmonton and Winnipeg. As well, Quebecor owns a chain of free daily commuter papers under the flag 24 Hours.

Torstar rumoured to be looking at Osprey Media

Speculation is increasing that Osprey Media Income Fund, which has been struggling to maintain enough profits to continue paying distributions to its fund holders, may be sold to Torstar.

A story in the Globe and Mail suggests a possible deal whereby Torstar would buy and keep (or fold) various dailies and weeklies that overlap with or fit with its own dominance in south central Ontario. The speculation is that it would sell on the rest of Osprey's properties to Transcontinental Media.

The story hinges, rather tentatively, on owner Michael Sifton's decision to skip an industry conference and stay close to home. Osprey owns a number of magazines, including the former Town Media group, formerly owned by Wayne Narcisco, which includes Hamilton magazine. Its only national magazine is Vines.

[UPDATE] A Canadian Press story Friday said that Osprey may have no choice but to be broken up if a coalition of buyers come forward with the idea of taking what fits with their particular portfolio. On the other hand, the changes in the rules on income trusts may also be giving Sifton second thoughts and he may be looking to his financial advisors to craft him a way to get out of the increasingly unsustainable income trust and into some other financial arrangement.

Sifton had said Wednesday, after the fund's annual general meeting, that Osprey is still keeping its options open, including capital restructuring, or new investment as an alternative to a sale.

The fund's board said in March it would begin the review in light of the federal government's announcement last fall on new tax rules affecting income trusts.

"The process is not just about selling," Sifton said. "It's also looking at capital structures. We're currently an income trust. Maybe there's a different type of vehicle we should be in. That's all the sort of analysis that the committee and the financial adviser will provide. "

"It's not necessarily a sale, it could be just a different capital structure."

Paton's YTV Whoa! spins off e-zine

YTV Whoa! magazine, the tween magazine put out by Paton Publishing (a subsidiary of Torstar's Metroland Media Group) has spun off an e-zine.

Whoa! distributes 250,000 copies, four times a year through Pizza Hut restaurants, Indigo/Chapters and newsstands across Canada (plus 75,000 copies of a French version), according to a story in Media in Canada.

An interactive sample of the e-zine can be seen here.

Paton Publishing says the mag's reach is about 880,000 tweens, with about 60% of readers reporting a parent or other adult looked at a copy of Whoa!. The YTV Whoa! e-zine will hit 130,000 subscribers aged 8-12 through YTV.com.

Advertisers can arrange for tie-ins with Pizza Hut placemats and collectable cups, while integrated campaigns often tie-in with links and support to YTV, online and on-air. Top marketers involved in the publication are Hasbro, Kellogg's, Parmalat, Crayola, Warner Bros, Alliance Atlantis, Nintendo, Disney, Wonder Bread, Nickelodeon and Viz Media.