Journalism professor warns of cuts to come at Saltwire newspapers after Postmedia purchase

Postmedia's acquisition of Nova Scotia-based newspaper publishing company SaltWire Network is likely to have big implications for its newspapers, warns a journalism professor.

Meanwhile, there are questions about what the sale means for the St. John's Telegram, as the printing press for the newspaper — which has been publishing since 1879 — is not included in the transaction. 

Margot Susca, assistant professor of journalism at American University in Washington, said companies like Postmedia's majority owner, private equity firm Chatham Asset Management, are focused on profit.

"They often use borrowed money to make their deals. They have very little interest in news as a service of democracy. They are looking at profit above all else," Susca told CBC News.

Last week, the Supreme Court of Nova Scotia approved the $1-million Postmedia bid for the insolvent Atlantic newspaper chain SaltWire Network and Halifax Herald Ltd. The sale includes the Telegram.

Private equity firms buy the debt of another company, then another hedge fund firm buys that debt and trade equity shares on the market, she said.

"This is all kind of financial speak to say the real outcome of that ownership is the new firm liquidates assets, closes newsroom and it lays off journalists," she said.

"We've seen that playbook."

Chatham Asset Management owns U.S.-based McClatchy newspaper chain, which includes 30 newspapers. Last year, Susca said, it cut 11 per cent of its editorial staff. Chatham Asset Management also has strong ties to the Republican Party, she said, and pushed their newspaper coverage further to the right.

Susca says she believes layoffs in Atlantic Canadian newspapers will follow the Postmedia acquisition.

"So communities lose that strong