Canada 360 | New Brunswick: Why were the Irving newspapers sold to Postmedia?

In New Brunswick, the news surprised everyone: on February 17, the Irving family announced that it was selling all its newspapers to Postmedia, a press company established in Toronto, which notably owns the National Post and Montreal Gazette.

At the time of the announcement, Brunswick News Inc. (BNI), a JD Irving Ltd. property. (JDI), owned almost all of the province’s weeklies as well as its three English-language dailies. The Irvings had held a complete monopoly of English-language dailies since 1969 – and a virtual monopoly since the 1950s.

How to explain this sudden sale? Rumor has it that the Irving newspapers were no longer profitable. According to an editorial by New Acadia, the province’s French-language daily (independent, but nevertheless printed by BNI), “the wealthy family was tired of paying off the deficits”. The bet would therefore be that Postmedia, a newspaper company with a proven track record elsewhere in the country, would succeed where Irving had failed.

The hypothesis appears plausible at first sight. Remember that JDI is first and foremost a forestry tycoon. It was from its lumber, its pulp and paper mills, in short, its infrastructures, that it printed its newspapers. JDI was so attached to paper that subscribers to the digital version of its dailies paid less if they also subscribed to the paper version. Non-subscribers also had access to absolutely no content from the digital versions of the newspapers. Clearly, for JDI, digitization was making the media business less attractive.

Note, however, that the transaction with Postmedia only amounts to approximately $16 million. In other words, the alleged deficits may be considered an insignificant sum for JDI, whose approximately 3.3 million acres of land, located mainly in New Brunswick and Maine, make the company the sixth largest landowner in importance in North America, according to the Land Report 100 (2019). And we’re not talking here about the 2.6 million acres of Crown lands it administers in New Brunswick.

More fundamentally, the problem with a narrow accounting interpretation of the transaction is that it overlooks a central function of the press for the Irving family: influencing public opinion in the direction of its interests.

In his test, Irving vs. Irving (Penguin, 2014), CBC journalist and former BNI employee Jacques Poitras recalls that patriarch KC Irving (1899-1992) was primarily concerned with influencing election results when he began buying newspapers in the 1980s. 1930. Several studies have since concluded that the Irving Journals served the family’s interests very well. The reason for this is structural: Irving companies being ubiquitous in the territory, it is difficult for BNI journalists to adequately fulfill their critical role since they constantly find themselves working on their boss’ business. A series of reports by Bruce Livesey published in the National Observer in 2016 tried to quantify this omnipresence: the family would own between 174 and 250 companies directly employing one in twelve workers in the province, while being responsible for more than half of its exports.

Compared to large multinationals favoring horizontal integration within the same industry, the Irving empire has traditionally favored the vertical integration of a large number of industries in a circumscribed territory, centered on New Brunswick. In this context, the interests of the Irvings were affected by virtually all areas of provincial politics; newspapers thus occupied a strategic place in the Irving empire.

However, this business model is now in decline. As reported in the work of Jacques Poitras quoted above, the family was gradually disunited after the death of KC Irving and the division of the empire between his descendants. The two main branches of the said empire, JDI and Irving Oil, are now largely independent of each other. Let us dare then a hypothesis: by shedding its newspapers, JDI assumes and accelerates a strategic reorientation consisting of deconcentrating from New Brunswick (JDI has just built a paper factory in Georgia) and refocusing on a limited number of industries. . A similar observation is also necessary for Irving Oil, which recently got its hands on an oil refinery in Ireland.

In short, the empire is falling apart and the Irving businesses are normalizing. With its political interests in New Brunswick now more limited, JDI can delegate to another herald of the conservative economic elite the responsibility of influencing public opinion. Because let’s sleep easy: under the leadership of Postmedia, BNI will not suddenly begin to criticize state complacency towards tax evasion, the spreading of glyphosate on forests or the concentration of the media.