Wednesday, February 28, 2024

Canadian Mass Media Company Torstar to Launch an Online Casino to Fund Its Journalism

Torstar Corporation made an announcement stating that it’s planning to launch a virtual casino in Canada this year. The company owns more than 70 regional and community newspapers. This includes the Hamilton Spectator and the Toronto Star. The corporation was founded in 1958 after the government of Ontario passed a law that barred the provisions of Joseph E. Atkinson’s will. During this time, Atkinson was the owner of Toronto Star.

On November 26, 2010, an announcement was made stating that a for-profit corporation would take over the Canadian Press news, with Torstar being one of its investors. Torstar acquired a 25 percent minority stake in Blue Ant Media in December 2011. Blue Ant Media is a specialty television channel owner.

In November 2017, Torstar and Postmedia announced a transaction that allowed Postmedia to sell the Vancouver and Toronto 24 Hours to Torstar in exchange for a total of 22 community papers along with the Winnipeg and Ottawa versions of Metro.

Torstar to Create Jobs and Offer a Responsible Gambling Brand

Corey Goodman is Torstar’s CBDO (chief corporate development officer); in a news release, he stated that they are thrilled at the possibility of taking part in a well-regulated online Ontario gambling market with a product that’s made in Ontario. Goodman also said that they believe their company will provide a responsible gaming brand that stands out from others in the market. What’s the best part? The company is going to create new jobs for Ontarians. He added that Torstar will offer growth for the province economy and generate new tax revenue that will help in supporting important programs in Ontario.

Between 1958 and 2020, the families of the first Atkinson Foundation trustees held Torstar class A shares. NordStar Capital LP, a private investment firm owned by Paul Rivett and Jordan Bitove, bought Torstar on 5 August 2020 for $52 million. NordStar promised to maintain the firm’s focus on ensuring that it produces top-notch journalism befitting the Star’s legendary history.

A special committee of the company’s board of directors recommended the transaction that saw the NordStar taking over the media. Fairfax Financial Holdings Ltd, which is its largest shareholder, and the majority of its shareholders also supported the transaction. David Peterson, who is the former Ontario premier, was appointed as Toronto Star’s vice-chair after the transaction was completed. John Boynton, who is Torstar’s chief executive officer, continued in his role.

The Atkinson Principles

Since it was established, the Toronto Star has adopted the Atkinson Principles. Throughout his five decades as publisher of the Canadian broadsheet daily newspaper Toronto Star, Joseph developed strong views on the role of a large city daily newspaper as well as the editorial principles it needs to espouse. Essentially, these beliefs and values form the Atkinson Principles. For over 100 years, the Atkinson Principles have provided the intellectual basis on which Toronto Star was operating while giving the newspaper its unique voice.

These editorial principles that Joseph espoused were established on his view that a progressive newspaper needs to play an important role in the advancement of society through the pursuance of economic, social, and political reforms. Joseph was mostly concerned about injustice issues related to racial, legal, political, economic, and social. Fundamental to the philosophy of Joseph was the belief that a state should act whenever a private initiative fails.

Torstar’s new owners stated that they decided to branch into online gambling so that it can help them pay for these continuing efforts.  Co-owner Paul Rivett said that doing that as part of Torstar would help promote the growth and the expansion of world-class community-based journalism.

Plans Contingent on Online Gambling Market Expansion

The company cited government data that revealed players from Ontario spend approximately 500 million Canadian dollars every year on online gambling. This figure is set to grow in the coming years as the government of Ontario is ready to allow new companies to operate online. Currently, most of the players go to grey market gambling sites based outside the country, where there’s less or no legal and regulatory inspection. As such, the revenue generated does little to boost the province’s economy.

Under the current legislation, only the government of Ontario is licensed to engage in online gambling. However, in its last year’s budget, Ontario’s Conservative government promised to introduce legislation that would end its current monopoly in online gambling this year. Torstar stated that its plans will depend on the government continuing with its plans.

Rivett stated that when an Ontario-based company such as Torstar participates in the province’s gambling industry, this will benefit everyone. He said that they want to make sure that the new marketplace is represented by a gaming brand from Canada, specifically Ontario. In turn, this will ensure that the money they make from punters will stay in Ontario.

Torstar Diversifying Revenue Models for Generating Financial Income

In an interview with the news agency Canadian Press, Jim Warren, who is a gaming industry consultant working for Torstar as an advisor for the company, stated that right now they cannot tell how much revenue they will collect. The reason for this is because the Ontario government review process is still not yet finished. Warren said that they do not know how big the gambling market will be in the province, as this is going to depend on the entire consultation process within the government. This is expected to happen after a few months from now. What they are certain about is that their company wants to diversify the revenue model of how they will be funding and paying editorial staff, columnists, and reporters working for Torstar.

This is the latest move that the company made to diversify its services beyond newspapers and into other lucrative digital fields. In November 2020, Torstar launched a parcel delivery service. The company also partnered with the largest golf retailer in the country, Golf Town, and acquired the SCOREGolf brand in January. Launched in 1980, the SCOREGolf is a golf media company that begun as the program for the golf tournament called the Canadian Open; its magazine is also the country’s largest circulated golf publication, and it has managed to grow into other media, including radio and television.

Concern About Media Independence

This move that Torstar made has critics. For instance, Tom Muench, who is working in Richmond Hill as a city councilor, stated that newspapers are crucial in ensuring that there is a healthy democracy. Therefore, this is giving him a pause when he sees that a prominent newspaper chain has to be financially obliged to an outside company to survive in the industry. Muench wrote an email to CBC News saying that he thinks that if a casino popped up in communities like half a year ago, many local papers owned by Torstar would have written a concerned local story.

Muench is also wondering how these newspapers would have reported about that story if other types of businesses would have decided to launch online gambling operations. He was asking that if the federal government lifted and gave the media support with its tax money and online casinos, then how people can be sure that they will have a firm, independent media/news industry.