Yahoo Finance Gambling and journalism? Roll the dice, Torstar
Mike Tyson likes to say that everyone has a good plan, until they get punched in the face. And Torstar Inc. has been taking it on a glass chin for years, as readers find their news elsewhere and advertisers enjoy an ever-increasing number of ways to target consumers more directly than an expensive full-page ad ever could.
The newspaper company has tried any number of ways to make money in a changing world. For a while it was selling coffee to go with morning papers; in November it started delivering parcels for toy stores as if it were a 20-year-old gig worker looking for some spare cash for the groceries.
Ah, but today is different. Journalists and industry watchers gasped as the chain, which publishes the Toronto Star and other daily newspapers across Ontario, such as the Peterborough Examiner and a bunch of community papers, will now look to gamblers to fund its journalism with the launch of an online casino.
It wouldn’t be a big deal, but the company had the audacity to outright link journalism with gambling in its press release.
“As an Ontario-based media business and trusted brand for more than 128 years, we believe Torstar will provide a unique and responsible gaming brand that creates new jobs, offers growth for the Ontario economy and generates new tax revenue,” the company’s co-owner Paul Rivett stated.
“Doing this as part of Torstar will help support the growth and expansion of quality community-based journalism.”
Newspapers have always found slightly uncomfortable ways to earn a buck - sex ads and fenced goods paid the bills for years as classified sections enjoyed their monopoly on the resale market - but owners had the good sense to keep the relationships off the side of its journalism. (Kind of like putting your kids through college with the proceeds of your drug-dealing side hustle).
But while some may wail at the optics of pairing the addictive behaviour of gambling with the increasingly un-addictive behaviour of reading the news, any initiative that brings a buck to a struggling industry has to be seen as a positive.
TorStar lost $30-million dollars the last time it reported its numbers, before being taken private by Norstar Capital last year. The owners have said they are committed to the chain’s long-standing commitment to a higher calling, but even the most civic-minded owners must choke when they look at a crumbling business model.
Things have been heading downward for years - no need to bore anyone with a long list of losses. The chain’s last official outlook before the books snapped closed were further proof it has nothing to lose by rolling the dice. Ad revenue was down 58% in a single month as the pandemic hit last March. The company spent a whopping $34-million to get rid of staff, investing in layoffs and restructuring in a bid to clear the books for its eventual sale.
Postmedia - the country’s other large publisher - managed to earn itself $53-million in the last quarter. But that was the result of some special items that had nothing to do with publishing and everything to do a one time non-cash settlement on its employee benefit plans, adding $63-million to its balance sheet.
There will be other ways to make money in the years to come, but Facebook and Twitter won’t be paying out anytime soon despite recent developments in Australia. These digital behemoths may be quietly signing side deals to pacify publishers across the United States and the UK, but even modest concessions wouldn’t be enough to save legacy print properties from their inevitable transition to digital-only publications.
Faced with numbers like that, gambling looks like one creative way to shore up the books. That's the thing about getting punched in the face - eventually you stay on the mat.
