Changes to news media support package welcome, but more needed, advocates warn - iPolitics.ca | Canada News Media
Connect with us

Media

Changes to news media support package welcome, but more needed, advocates warn – iPolitics.ca

Published

4 years ago

 on


News media advocates say changes to the government’s $595-million support package won’t be enough to help the industry weather the COVID-19 pandemic.

Bob Cox, publisher of the Winnipeg Free Press, said he welcomes long-awaited changes to the government’s nearly two-year old financial assistance plan, as problems in the original draft made it unworkable and stalled funding that was supposed to begin in January 2019. But, he said the program was created for an economic landscape where publishers could also rely on advertising revenue, which has since been decimated by the coronavirus pandemic.

READ MORE: News media industry’s troubles intensify during COVID-19 pandemic

“We’ve got an old problem fixed, but we’ve actually got to talk about a new one already,” he said in an interview with iPolitics Monday. 

Cox said revenue at the Winnipeg Free Press has fallen over 30 per cent since mid-March, and he’s heard revenue dropping 40 per cent elsewhere in the industry. 

“Unless you’re a company that relies entirely on readers for your revenue, you’re in a lot of trouble,” he said. 

A release from the Department of Finance on Friday said adjustments to the media sector’s tax measures would ensure they achieve their “initial objectives.” The changes include include allowing news publishers and media organizations that receive support through the Aid to Publishers grant of the Canada Periodical Fund to qualify for the Canadian journalism labour tax credit, as well as enabling the Canadian journalist labour tax credit to be allocated to active members of a qualifying journalism organization that is a partnership, among others. 

Cox previously told iPolitics his corporation was unable to receive funding from the media bailout because it’s a partnership — a business operation between two or more individuals who share management and profits — and it has no way of receiving the tax credit as partnerships don’t file tax returns.

While he said it’s “fantastic” the government is making these changes, he stressed that media organizations are surviving in the pandemic because of the federal government’s emergency wage subsidy program, which pays back 75 per cent of an employee’s wage. 

In contrast, the media hiring credit, known officially as the Journalism Labour Tax Credit, allows Qualified Canadian Journalism Organizations (QCJOs) to apply for a 25 per cent refundable tax credit for salaries or wages of eligible newsroom employees from Jan. 1, 2019 onward. The credit is subject to a cap of $55,000, for a maximum tax credit of $13,750 per employee.

While this could have significantly helped the industry before the coronavirus crisis, Cox said industry players don’t think advertising revenue will return for at least a year after the pandemic, if at all, and the 25 per cent credit simply won’t be enough to offset this loss. 

‘That’s not enough so save news media in the predicament we’re currently in,” he said. “Longer term, there are bigger programs that have been created by COVID,” he said.

Ed Greenspon, president and CEO of the Public Policy Forum, a non-profit that examines policy issues, and the former Globe and Mail Ottawa bureau chief, said the industry has lost two thirds of its revenue since the 2008-09 financial crisis. 

A report from Statista found that advertising revenue for the newspaper industry stood at $3.43 billion in 2003, just a few years before the financial crisis, but more than halved to $1.63 billion by 2018.

“This is an industry that can’t weather a recession,” Greenspon added. “It’s too close to the edge already.”

Greenspon said the federal government’s efforts are best spent fixing the program, rather than designing a new one, noting how long it takes to create an effective policy framework.

He said the government should start by paying out the media tax credit money from 2019 “and get it out the door very quickly” so companies can address a lack of cash flow. He also said the government could start paying out the 2020 money early to help sustain media organizations, noting these changes won’t cost the government more than what’s already been promised to the journalism sector. 

Cox also said the slow flow of funding from the federal government to the industry hasn’t yet been addressed, and would like to see the money from 2019 paid out quickly. 

“That’s what really matters, and there’s this whole question of urgency which still is not addressed,” he said. “That’s what I’d really like to see.”

Camille Gagné-Raynauld, press secretary for Heritage Minister Steven Guilbeault, said  the government is aware the coronavirus pandemic is having a significant impact on Canada’s news media. She said the government has announced adjustments to the journalism tax credits to ensure the measures align with policy intent and help news organizations engage in original written news content.

“Our primary goal with these adjustments is to provide journalistic organizations with greater certainty towards the continuity of their activities and the means to plan ahead for their future,” she said in an emailed statement to iPolitics.  “Our government remains committed to supporting our newsrooms while respecting the core principle of journalistic independence.”

Another potential boost to the sector, Greenspon said, would be for the government to adjust the subscription tax credit from 15 per cent to 50 per cent, even if on a temporary basis. The credit encourages Canadians to subscribe to a media outlet by offering a 15 per cent non-refundable personal income tax credit for digital news subscription costs paid to a QCJO, from anytime after 2019 to before 2025.

Greenspon said increasing the credit might actually encourage people to make a decision to pay for journalism at a time when the industry needs it, but also when people need to stay informed. As the program currently stands, he said 15 per cent is “too low a number to change behaviour.”

Greenspon said it’s likely there will be a bigger solution needed after the five-year tax credit programs ends.

He recommended the federal government create a levy on advertising sales by distributors, referring to platforms like Facebook, Google, and Twitter. He said the levy could be a mechanism to fund organizations who are creating journalistic content, paid for by those who profit from this work but are not investing in it. 

He said a similar program already exists, pointing to the five per cent fee cable and satellite companies contribute to the Canadian Media Fund. 

“We’ve crossed that bridge, philosophically, many years ago in Canada,” he added.

Greenspon said it’s important to make the levy principle-based, rather than just taxing Facebook and Google. He also said the solution would be much better than for democracy and public perception, because publishers wouldn’t be beholden to the government, but would be funded through a private-player to private-player system.

Cox also said the industry needs a solution aside from the nearly $600-million media bailout.

“The conversation is now, what bigger program is needed for news media, to try and save news media in Canada,” he said. 

This article has been updated with a comment from Heritage Minister Steven Guilbeault’s office.

This article has been updated to remove a comment which incorrectly stated that the tax credits would no longer apply just to written journalism.

Let’s block ads! (Why?)



Source link

Related Topics:
Continue Reading

Media

Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

Published

3 weeks ago

 on

August 23, 2024

By

Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

Source link

Continue Reading

Media

Arizona man accused of social media threats to Trump is arrested

Published

3 weeks ago

 on

August 23, 2024

By

Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

Continue Reading

Media

Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

Published

3 weeks ago

 on

August 20, 2024

By

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

Continue Reading

Trending

Exit mobile version