National Post CEO says Canwest’s papers need to focus more attention online

The new head of Canwest’s newspaper division has a daunting task before him, with plans to rework the company’s operations and attract more advertising dollars amid one of the worst downturns the media industry has ever seen.

TORONTO — The new head of Canwest’s newspaper division has a daunting task before him, with plans to rework the company’s operations and attract more advertising dollars amid one of the worst downturns the media industry has ever seen.

But Paul Godfrey said he has a vision of how he would like the newspaper chain to evolve over the next few years and, in particular, he wants to see a stronger online presence.

“If we’re going to achieve the level of success that I would like to see, we’re going to have to make greater inroads in the digital world,” he said Tuesday in a phone interview.

Godfrey announced earlier this week that he is leading a group of investors who will pay $1.1 billion for Canwest’s slate of print and online media assets, which include the Montreal Gazette, Vancouver Sun and Ottawa Citizen, alongside community newspapers and websites.

And he said while it’s still too early to reveal the blueprint of his plan for the future, he is certain that part of it will involve a tighter focus on the Internet.

“There’s got to be a ’digital-first’ attitude. Not that you abandon print, don’t get me wrong, there is still a great horizon ahead of us with respect to print,” he said.

“I’m not in the camp that writes off newspapers.”

The newspaper industry has faced eroding readership of its publications over the years as readers search online for alternative sources for news, while the recession delivered an extra slap as advertisers started reducing their budgets.

Classified ads have been hit particularly hard, partly because of free Internet sites like Craigslist and a pullback in auto-related advertising last year hurt papers further as the Ontario-centred industry restructured.

Godfrey said that while he’s impressed with the Canwest newspapers’ editorial content online, he believes that his company has room to improve its online advertising revenue and in turn help the company’s profits.

Canwest’s newspaper websites are updated daily but tend to lag behind many of their competitors in terms of the frequency of updates throughout the day.

Deloitte Canada technology analyst Duncan Stewart said part of the reason was that Canwest has lacked the money to properly fund its own operations recently as it grappled with major debts.

“A significant online presence costs money, and certainly for the last few years the one thing Canwest has not had is a lot of extra money,” Stewart said.

“They were resource constrained and probably not able to invest in it the way that some of their peers did.”

Godfrey’s plan hopes to change all of that. Under the acquisition, which is expected to close July 15, the newspapers will shed the Canwest name and operate under a new title that hasn’t been determined.

Financial backers plan to make their investment back through an initial public offering for the new company sometime shortly after regulatory approval.

Godfrey, 71, has spent the past three decades working in the business world after leaving politics, and much of that time has been spent focusing on media companies.

He started at the Toronto Sun as its publisher and CEO before he orchestrated a management-led buyout of the former Toronto Sun Publishing Corp.

In January 2009 he was hired to rework Canwest’s National Post operations and make the newspaper profitable once again. While the Post is still losing money, he insists it’s “approaching profitability.”

Breaking even would be a major accomplishment for the paper, which has struggled to squeeze out profits since Canwest bought the assets from Conrad Black a decade ago. Buying those assets saddled Canwest with massive debts that ballooned to as much as $4 billion when the company piled on another acquisition of the Alliance Atlantis specialty TV stations in 2006.

Canwest’s other papers have been consistently profitable, though they became the unfortunate victims of their struggling parent company’s financial problems.

Godfrey will make his first visit to each community newspaper in the coming weeks with the intent of assessing the operations. He said it’s too early to determine whether any of the papers will face cost cutting or other changes.

“It’s pretty hard for me to talk about when I don’t know very much about the other operations, other than the National Post,” he said.

Godfrey said he also plans to enhance the presence of Canada.com, the foundation of its various digital assets, including Working.com and Driving.ca.

“It seems to be the most natural website if you wanted to find any information about Canada,” he said.

“If I was looking for something that the federal government happened to be doing, isn’t that such a natural to go to Canada.com?”

However, Godfrey insisted that he won’t sell the website name, though he declined to reveal any other plans.

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