1. Since I've been challenged by @a_picazo, I'll explain why I'm wary of PostMedia proposal that Canadian gov't should subidize newspapers
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Replying to @HeerJeet
2. In principle since I'm a statist, I have no objections to governments wanting to shore up troubled industries like newspapers.
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Replying to @HeerJeet
3. Sweden & Denmark both have newspaper subsidies, so there's definitely a model to be followed.
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Replying to @HeerJeet
4. But there are special circumstances in the Canadian case. PostMedia proposal is here:https://www.buzzfeed.com/paulmcleod/canadas-largest-newspaper-chain-wants-ottawa-subsidize-newsp?utm_term=.jveNydEbXN#.eq2Gyxl4zG …
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Replying to @HeerJeet
5. The vast majority of Canadian newspapers are owned by one company (PostMedia), itself owned by an American hedge fund.
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Replying to @HeerJeet
6. The current problems of PostMedia are not just the generic ones of newspaper industry but also due to a series of bad business decisions
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Replying to @HeerJeet
7. In a nutshell: Postmedia's problems are an onerous debt structure so that even its profitable papers are being leeched to service debt.
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Replying to @HeerJeet
8. Because Canadian newspaper industry so highly concentrated in Postmedia, we have a too big to fail problem & moral hazard problem.
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Replying to @HeerJeet
9. In theory, proposals would benefit all Canadian newspapers. But because of concentration, it's a de facto bailout of one company.
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Replying to @HeerJeet
Why not make a bailout conditional on divestment of local papers similar to conditions subsequent to a merger review?
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I'd leave the details up to people who understand the economics better than I do!
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