Most of the major farm publications in Western Canada will soon be owned by a single company.
Glacier Ventures International Corp. of Vancouver, which owns the Western Producer, is buying Farm Business Communications from Agricore United.
FBC’s agricultural publications include the Manitoba Co-operator, Grainews, Country Guide, Canola Guide and Canadian Cattlemen.
Financial terms of the deal, which is expected to close by the end of September, were not released.
GVIC spokesperson John Collison said the company has no plans to make changes to the operations, content or management of the newly acquired newspapers and magazines.
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The FBC publications and the Western Producer will continue to compete, he added, and farmers will still have the same choices as to which papers they subscribe to, where they get their news and how they spend their advertising dollars.
“We see them as being quite complimentary as businesses and continuing to operate totally independently,” Collison said.
“What we have to do is maintain that independence to maintain the strength of their product.”
Pat Bell, head of the school of journalism at the University of Regina, said that while she wasn’t familiar with the details of this transaction, concentration of ownership in the media is always cause for concern.
“It’s certainly a healthier thing when there are a variety of owners providing a variety of perspectives,” she said.
However, Collison said that shouldn’t be an issue in this case, partly because GVIC has no role in determining the editorial content of its publications and partly because they aren’t really doing the same thing.
“They are different businesses with different focuses,” he said, adding each has its own philosophy in terms of content, advertising and marketing.
The Producer is a newspaper with a broad regional focus, covers a wide range of topics and presents readers with a diverse package of news and information.
The FBC publications tend to be more like trade magazines, he said, targetted to specific groups of producers with an emphasis on technical and instructional information.
The exception to that is the Co-operator, which is more like the Producer in content, although it concentrates on Manitoba news.
“Whether there is something the two organizations decide they could do together in some small way is really up to the publishers,” Collison said.
He also sees no problems in owning a number of competing businesses, expressing confidence that they can all continue to be profitable.
“I think everyone can come out ahead because they are marketing different products,” he said.
Grainews has a circulation of about 31,000, Country Guide 25,000, Cattlemen 19,000 and the Co-operator 13,000, according to the Canadian Circulations Audit Board.
The federal competition bureau has reviewed ownership concentration in previous sales and mergers of media companies, but Collision said he doesn’t expect it will be interested in this sale.
“This is a very small deal for them.”
In Agricore United’s financial statements for the year ended Oct. 31, 2002, FBC reported earnings before interest, taxes, depreciation and amortization of $1.7 million on gross revenues of $11.2 million. It’s expected to do about the same this year.
GVIC, which publishes a number of newspapers, magazines and technical and business manuals, reported earnings before interest and taxes of $3.3 million on revenues of $27.5 million and net profit of $226,000 for the fiscal year ended Dec. 31, 2002.
Collison said GVIC first approached AU about the possibility of buying FBC not long after it bought the Western Producer from Saskatchewan Wheat Pool in January 2002.
David Carefoot, AU’s vice-president of corporate finance, said the grain company had not been trying to sell its publishing operations and emphasized the sale does not indicate the company is trying to raise money by divesting itself of assets.
He was uncertain how investors would react to the news.
AU’s public shares had been trading around $7.50 on the Toronto Stock Exchange throughout July, before declining in the first couple weeks of August. After hitting a low of $6.10 on the day the FBC sale was announced, they climbed back to close at $6.35 the following day.
Shares in Glacier, which had been trading at around $1.30 in the week before the announcement, jumped to $1.40 the next day.
Bell said one positive aspect for the publications that have been sold is that they will no longer be owned by an agricultural corporation, which should improve their credibility as objective sources of information.
“There should be an advantage there.”
Barb Glen, managing editor of the Western Producer, said that has proved to be the case since GVIC bought the newspaper.
“The ability to be objective has been enhanced by having an owner that isn’t a player in western Canadian agriculture,” she said, adding the paper has received comments to that effect from its readers.
And she said the new owner has not gotten involved in the newspaper’s editorial content or news coverage.
Collison said the purchase of FBC indicates that GVIC continues to have confidence in the future of the agricultural economy in Western Canada.
“It’s been tough, but it will come back,” he said. “And sometimes the times to get in are when things are a little bit tougher.”
