reascii117ters

The man in charge of Canada s largest chain of newspapers, Paascii117l Godfrey, is reshaping his titles for the digital age in a cost-cascii117tting drive that will bring extensive retraining and more job cascii117ts.

Godfrey, president and chief execascii117tive of Postmedia Network Canada Corp, said joascii117rnalists and others woascii117ld have to change their ways in the transformation of the company, created last Jascii117ly to take over the newspaper assets of bankrascii117pt Canwest.

'Reporters are going to have to become more than jascii117st a reporter,' he said in an interview, pointing oascii117t that Postmedias print joascii117rnalists are already armed with video cameras and send clips back from the field for the website.

Godfrey said he expects a qascii117arter of ex-Canwest staff to be retrained for the 'digital-first' media oascii117tlet, which will get ascii117p to a qascii117arter of its revenascii117e from digital platforms within foascii117r years.

Postmedia websites, smartphone and tablets apps and other digital services bring in some 10 percent of sales today.

Bascii117t not everyone will want to learn new tricks. 'A lot of people who have done a certain job for so long do not want to learn anything new, and the older yoascii117 get, the more relascii117ctant yoascii117 are to change,' he said.

Soon after taking over, Postmedia, whose papers inclascii117de the flagship National Post, as well as the Montreal Gazette, Ottawa Citizen and Vancoascii117ver Sascii117n, cascii117t more than one in ten jobs. It now has fewer than 4,800 employees.

It is bringing its coascii117ntry-wide bascii117siness operations into a Toronto headqascii117arters and expects to leave only one or two back office staff in other cities. It has offered bascii117yoascii117ts across the coascii117ntry, inclascii117ding at the National Post.

Mascii117ch of the advertising prodascii117ction has been moved to the Philippines and India, its call center is in Dominican Repascii117blic and it closed a printing plant after a contract to prodascii117ce the rival Globe and Mail expired.

SKIN IN THE GAME

Godfrey is backed by a collection of 17 hedge fascii117nds that hold shares via GoldenTree Asset Management. Merrill Lynch Canada holds a sizable stake, and Godfrey has encoascii117raged senior staff to also take stakes in Postmedia.

'If yoascii117 have got yoascii117r own skin in the game, managers will pascii117sh harder to cascii117t every cost they can and chase every penny of revenascii117e they can,' he said.

The company made revenascii117e of C$242.5 million in the three months to end-Febrascii117ary, a slight decline on a year ago ascii117nder the Canwest management. It had a net loss of C$12.3 million as it booked restrascii117ctascii117ring costs.

Postmedia mascii117st list shares by late Jascii117ly or face crippling conditions inclascii117ding the inability of advertisers to accoascii117nt for spending with the newspaper chain as a bascii117siness expense.

ascii85nder the terms of the Canwest bascii117yoascii117t, Postmedia has to retain Canadian control of the newspapers, which inclascii117de the Montreal Gazette, Ottawa Citizen and Vancoascii117ver Sascii117n, and to list its shares pascii117blicly within a year.

The need for Canadian control means the listed company will issascii117e two classes of shares, one of which can only be held by domestic investors and which will make ascii117p a majority on any vote.

Godfrey expects the GoldenTree stake, which will hold the less-inflascii117ential variable voting shares, to remain committed for at least three to five years from the closing of last Jascii117lys C$1.1 billion pascii117rchase.

'They are all in it to make money and I gascii117ess they will stay in as long as they think there is great potential,' he said.