Postmedia today announced a new strategic partnership with digital financial company Mogo that will see it provide a minimum of $50 million in advertising value over the next three years.
The deal includes an option for an additional two years with mutual agreement, and will provide Mogo – which operates a series of millennial focused financial products including MogoMoney loans up to $35,000, the Mojo Platinum Prepaid Visa Card and upcoming products including MogoMortgage – with access to its various products including the National Post, Toronto Sun, Ottawa Citizen, 24hrs and websites including Canada.com, driving.ca and Canoe.com.
According to Postmedia, the deal will “significantly increase” Mogo’s brand awareness and reach via its more than 200 properties, 8.3 million weekly print readers and 12.8 million average monthly digital users to its digital properties.
The incentive-laden deal sees Mogo agreeing to pay Postmedia a performance-based revenue share equal to 4% of its existing revenues and 11% of incremental revenues (subject to certain adjustments), while Mogo has also issued Postmedia rights to acquire approximately 1.2 million shares over the next five years for $2.96 per share.
The deal was announced with Postmedia still under heavy fire for a series of layoffs that gutted the newsrooms of several major newspapers across the country. The company also announced its intention to merge newsrooms in several major markets including Calgary and Ottawa.
Postmedia has been slammed in negative coverage of the announcement, with the president of the union representing Postmedia employees saying that the Trudeau government needs to take a look at the state of Canadian news media.
Announcing the deal with Mogo, Postmedia president and CEO Paul Godfrey said that the company is on a “transformative journey,” and that the new strategic partnership with Mogo represents an “important step forward” that could be replicated in other advertising sectors.
“Because of the innovative structure of this agreement, our interests are aligned an Postmedia shares in Mogo’s success,” said Godfrey. “We are highly motivated to accelerate their growth.”
Acknowledging that the traditional media industry is “significantly disrupted,” Postmedia’s chief commercial officer Andrew MacLeod said that conundrum for Postmedia is that it has its largest audience ever, but it challenged to monetize it.
MacLeod called the deal with Mogo a “strategic collaboration” with the potential to accelerate both parties business objectives: Amplifying Mogo’s customer acquisition objectives, brand awareness and new product promotion, while bolstering Postmedia’s development of “innovative monetization strategies.”
