President of strike-hit Chronicle Herald asks for public advertising

The president of the strike-hitChronicle Herald newspaper has made a pitch for government advertising dollars at a parliamentary hearing, but a newspaper business watcher calls the plea "a little tiny Band-Aid on a gaping wound."

Mark Lever says his daily paper is facing a crunch in a changing media landscape, having only a few months ago closed one of the company's free weeklies.

He told a Canadian heritage committee this week that his paper has lost provincial and federal ad dollars, which he said dropped 54per cent, from $600,000 in 2013 to $280,000 this year.

The committee is meeting about media and local communities, taking testimony from managers across the country.

"I believe the government has at its disposal an ability and a capacity to help," said Lever, pointing to government's shift to advertising on social media.

Mark Lever declined to answer questions when contacted Friday.

Such an "indirect" government subsidy is "a very tough argument to make," said Paul Willcocks, a former newspaper publisher and now editor withVancouver-based online news publication TheTyee.

"It's a tiny little Band-Aid on a gaping wound," Willcocks said.

"As a taxpayer, I'd like my government to spend their ad dollars where it's the most effective and has the greatest impact and gets the appropriate message, the useful messages, to the right audience."

"Most critically, it's a temporary, ineffective attempt to solve a much, much deeper problem,"Willcockssaid.

Public ads shrinking

That's indeed what Nova Scotia's government is doing, according to numbers provided by Communications Nova Scotia.

The province's ad spending at all weekly and daily newspapers is now a seventh of what it was in 2013, dropping from almost $835,000 to less than $122,000 so far this year.

In terms of print ads in the Herald alone, the provincial government spent 75 per cent less thanit did in 2013. From July to present, the Herald has made only $250 in online ads from the province, according to the numbers.

The bulk of this year's provincial advertising money was for a "graduate to opportunity" program, Communications Nova Scotiasaid. That's the same program Labour Minister Kelly Regan promoted, without the department paying a dime, in a Herald custom content article on Tuesday.

'No real way out'

Newspaper managersacross Canada have appeared in front of the committee asking for subsidy, and for CBC to get out of digital advertising. CBC has defended its digital advertisement to the heritage committee, saying those ads are a minor part of revenues.

Lever also pointedto CBC, but primarily to Google and Facebookas what "substantially fragments audience and stripped advertising revenue."

Newspapers have yet to provide a "roadmap" for what government subsidies could look like, noran alternative business model, Willcocks said.

"Newspapers in Canada are facing a very, very difficult time, and the problem for them is that there's no real way out," he said.

He suggests things like allowing foundations todonate to journalism, or having CBC provide digital platforms for media start-ups could help.

The Herald's "head-on conflict" appears to be a delayedresponse to pressures other companies face, he said. Its counterparts have made similar changes, but over the course of the last decade.

"Even inunionizednewspapers, they've been able to do reduction in staff painfullybut without this kind of major strike," he said. "It's been possible to resolve."

Instead, thispaper has shifted from a family owner willing to accept low returns, Willcocks said,to one who wants higher profits as a cushionagainstindustry problems.

Not 'necessary to survive,' union says

The Herald's newsroom has been on strike for almost 10 months. Earlier this week, the Halifax Typographical Union filed, on behalf of striking workers, a Labour Board complaint about management's willingness to negotiate. Union vice-president Frank Campbell said the union has offered compromises including wage cuts, pension changes and layoffs.

"I think the problem here is that he would like to get rid of a union and that he would like to have content but just have it done much cheaper," Campbell said.

"My suspicion is that having it done much cheaper isn't necessary to survive, but it's necessary to maintain a certain level of revenue or income."

Campbell said he's worried that Lever is asking for government funds while actually expanding the Herald business into advertising and sponsored content avenues, instead of investing in more journalism. Lever told the committee he would like to see the newsroom cut back to 30 people. It currently has 55 journalists on strike, plus an unknown number of replacement workers.

Lever also asked the committee to consider a government fund for investigative journalism, doled out based on readership numbers, and for the Canada Periodical Fund to coordinate a daily newspaper subscription service.

• Postmedia's Godfrey wants lifeline of tax breaks, bigger government ad spending