It is a rule that the rich have to follow. They are taught that you always pay yourself first. It is how they stay rich. Take the situation of Chief Executive Officer Paul Godfrey at Postmedia. The company loses hundreds of millions of dollars every year and the stock is in the toilet. If the company was any more leveraged, the fulcrum would be left behind.
But CEO Godfrey and his inner circle still get their bonuses. Paul took home his one and a half million or so this year from a company that he acquired out of bankruptcy with a very large chunk of American hedge fund money. His promise was to slash costs and salaries to profitability. He is still a long way from that objective.
The recent and highly-leveraged acquisition of the English-language assets of Sun Media has not produced his promised reduction in the fiscal bleeding. The leveraged buyout from Karl Péladeau’s Quebecor for just $316 million was a good deal until you realize that it added another $650 million to Postmedia’s already massive debt.
Maybe that is all you need in business today. Nobody denies that Paul Godfrey has chutzpah but with his added hubris, you would think he would look for better challenges. He might have lost his friend Stephen Harper in Ottawa despite his forcing all of his newspapers to endorse the Conservatives but he has embraced Barrie Ontario’s own Patrick Brown as though he were a long lost son. His next ambition could be to make that boy Premier of Ontario.
Mind you the question of making Patrick Brown palatable to Ontario voters might be far more of a challenge than even Paul Godfrey can handle. As you have noticed lately, the lad only speaks occasionally but he does have a decent hair cut, an expensive suit and the proper accessories. At least Patrick no longer looks like a sow’s ear.
But the concern is that Paul Godfrey’s house of cards at Postmedia is working on constantly diminishing returns. If Paul keeps paying himself and his henchmen while still paying the vigorish to the American hedge funds, he will ride that gravy train right into what Lord Connie Black recently referred to as his own end zone. And as other writers have noted, Paul is no wunderkind in the newspaper business. He is barely in the mainstream of Canadian politics. Maybe at 76 it is time for him to take his millions and retire to some warm place in the sun.
The newspaper business is no longer for people who love the smell of newsprint. Paul was always a manipulator and never an innovator. As a retiree, he could just carp about things like the rest of us.
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Copyright 2015 © Peter Lowry
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