CHECK AGAINST DELIVERY. CEO Address Postmedia Network Canada Corp. Annual Meeting of Shareholders January 11, 2012

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1 CEO Address Postmedia Network Canada Corp. Annual Meeting of Shareholders January 11, 2012 Forward-Looking Information This presentation may include information that is forward-looking information under applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of By their nature, forward-looking information and statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These risks and uncertainties include, among others, competition from other newspapers and alternative forms of media; the effect of economic conditions on advertising revenue; the ability of the Company to build out its digital media and online businesses; the failure to maintain current print and online newspaper readership and circulation levels; the realization of anticipated cost savings; possible damage to the reputation of the Company s brands or trademarks; possible labor disruptions; possible environmental liabilities, litigation and pension plan obligations; fluctuations in foreign exchange rates and the prices of newsprint and other commodities. For a complete list of our risk factors please refer to the section entitled Risk Factors contained in our annual management s discussion and analysis for the year ended August 31, 2011 and the period ended August 31, Although the Company bases such information and statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates may differ materially from any such information and statements in this press release. Given these risks and uncertainties, undue reliance should not be placed on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statements. Other than as required by law, the Company does not undertake, and specifically declines, any obligation to update such information or statements or to publicly announce the results of any revisions to any such information or statements. Thank you Mr. Chairman and good afternoon everyone. Mr. Chairman, members of the Board, shareholders. I would like to personally welcome you to the first Annual Meeting of Shareholders of Postmedia Network Canada Corp. as a public company. It has been a busy 18 months since Postmedia Network was formed. We have faced both challenges and successes along the way. I would like to personally thank our Board and the management team at Postmedia. This company emerged from the CCAA process as a brand new company. 1

2 As its new CEO the members of this board were and continue to be invaluable to me. Their expertise and generous support, guidance and insight have helped to shape this company and set our course for success. We have a unique and exceptional Board at Postmedia with expertise ranging from newspaper publishing, broadcast media and telco industries to finance, real estate and government sectors as well as from digital media and advertising. A real cross-section of incredible talent that I believe to be unparalleled in Canadian public companies. In our first full year, we have achieved significant transformation and cost reductions more than we believed we could have in such a relatively short period of time. This past year has been one of unpredictable economic pressures. We look back on a year that, although not as difficult as our industry peers in the US, still sees us coming short of the mark on some key metrics. Through modest digital revenue growth, cost management and implementation of transformation projects in Fiscal 2011, we delivered better operating profit than the previous year. Print advertising revenue continues to decline and most industry analysts remain unsure of how much of the fall-off is economic and how much is structural in the media industry. What is known for sure is that both factors are playing roles. The world economy, especially the European economic situation, will play a role in the year ahead. Political leaders have warned that 2012 will be tough going. At the same time, the media world is changing. It used to be that newspapers set the timing, tone and agenda for all news reported. Radio and television were quick to rip-nread getting their content directly from our newspapers. Journalists in our industry prepared and at great cost to their outlets the content that other media helped themselves to for FREE. However now, in the digital world, things have changed dramatically. Newspapers no longer dictate when the public receives the news. Prime Time is all the time and news is generally digital, first. Our content is still read by broadcasters but is also now scraped and posted to a multitude of digital platforms. In an effort to curb scraping, several U.S. groups have banded together to form a joint venture in order to police this pilfering in a similar way that the music industry addresses rights management. 2

3 News happens every minute of every day. It is now presented and consumed whenever the reader wants it, wherever they decide to receive it, and on any device of their choosing instantly. Newspapers, in the past, have always been considered the kings of content. In order for that to continue they must be visible in print, on the web, and on any other device that is with us today, or yet to be invented. We marked some important milestones in Fiscal In April, we completed a refinancing of our term loan resulting in reduced interest payments and more relaxed covenants. On June 14, Postmedia Network Canada Corp. began trading on the TSX. We had stated from the outset that we fully intended to maintain our Canadian newspaper status under the Canadian Income Tax Act and we achieved that goal by having our shares listed on the TSX within one year of the formation of our company. Although typically a public listing comes with an offering of shares to the public, we did not issue new shares at the time but chose just to list our existing shares on the TSX. Advertisers in our newspapers could then be assured of the continued deductibility of their Canadian advertising expenditures, and that was our primary goal. No newspaper in Canada can survive in any city without presenting local news...no matter who owns it. A foreign owner that does not present hyper-local news as quickly as a local owner will quickly fail. It is hard for me to believe anyone could differ with that opinion. Huffington Post, for example, knows that if they wish to attract Canadian visitors they too will have to provide local Canadian content. In Canada there are only a few major newspaper companies today. Any further shrinkage whether by merger or acquisition would significantly impact stakeholders. We have seen over the last forty years that new players (including National Post and others) coming to the marketplace enhance competition and make the entire industry better. With everyone competing for readers and advertisers, quality and value goes up. It is those stakeholders readers and advertisers who end up being the big winners. Yet in this new world total digital advertising revenue in Canada has now surpassed total print newspaper ad revenue. 3

4 It is interesting to point out that of the $2.2 billion of internet advertising expenditure in Canada, nearly half of that is going to several huge non-canadian owned companies including Google, Yahoo!, Facebook, and Microsoft. These foreign-owned entities operate under no fixed rules in Canada. There are no laws that inhibit the way they do business here. Google has become a dominant player in local digital advertising in this country with minimal sales or content investments in Canada. The big question is why do we keep antiquated ownership rules in place? I believe that most Canadians appreciate that competition creates better products, lower prices, and in our industry more news content with diverse opinions. In a free enterprise society, competition means a stronger industry. The Government of Canada is contemplating easing foreign ownership restrictions in the telecommunications sector as a result of the Globalive/Wind decision. It is rumoured that there may be consideration of the broadcast sector too. It seems to makes sense that they consider the standing of newspaper publishing industry in this regard as well. Other milestones in Fiscal 2011 include the sale of some of our Western properties. On November 30 th, we completed a transaction with Glacier Media, selling the Times Colonist newspaper in Victoria along with 2 other Vancouver Island daily newspapers and 20 weekly and biweekly BC-based community publications. The purchase price of $86.5 million, Canadian, has been applied directly to paying down our corporate debt. The lowering of our overall debt means lower interest payments. It also means that, over time, we will have greater flexibility with respect to future investment. We also made strides on our digital first path, launching newspaper apps on a number of platforms including ipad, iphone and Android. We acquired a small internet company Sprouter Inc. an acquisition that links us more closely to the digital start-up community and innovation in this space. We also forged a relationship with accelerator programs at MaRS in Toronto and we will continue to connect with and support innovation in this space. As we look ahead, we know that as an industry, the business model is changing. It is for that reason transformation plays such a predominant part of this company s strategy. Simply put, the success of our company in the years ahead will be measured by metrics different from those of years past. 4

5 As I have said many times, and still strongly believe, newspapers printed newspapers will be around for a long time. But I also know that circulation is changing. Readership is up in Canada which seems to indicate that Canadians are still very committed to reading their news in print. We continue to move forward, leading the way in some areas including our experimentation with digital pay models. We spend many millions of dollars assembling reliable and authentic news. The public has, for decades, been prepared to pay for it whether at the newsstand or to have it delivered directly to their doorstep. For some reason though if we put it inside their office on a desktop or deliver onto a home office laptop or a tablet in their living room, there seems to be a reluctance to ask them to pay for it. It doesn t make a lot of sense to me or others. It certainly doesn t make business sense. And solving this paradox must become part of our future if we are to be successful. While readership in Canada is stable, paid print circulation is declining. Audiences are looking for more ways to engage with our content and the future may have us offering more of a blended-platform subscription model than we see today. Advertisers too are looking for greater strategic results from the campaigns they launch and the ways audiences engage with their messages. This past year, we launched the first phase of a paid content pilot using a metered model for access to our digital content. The plan for the New Year is to continue a strategic, phased, roll-out taking the learnings we have generated so far, to help frame the plan for the next markets. As we entered into our second year of operation which began in September, we worked toward redesigning the executive structure at Postmedia Network to best address our current business realities and meet our strategic objectives. And we undertook an extensive search to find the best people to fill key roles at Postmedia. Today, we announced the appointment of two senior executives: Jeffrey Haar, who attended his first Board meeting today as our new Executive Vice President of Legal and General Counsel, Welcome Jeffrey. Jeffrey joins us from his most recent role as Senior Vice President, Legal Affairs and Corporate Secretary at Brookfield Asset Management. He has an impressive track record in the U.S. and Canada and has content development expertise too having served as a senior editor of the University of Toronto Faculty of Law Review. 5

6 Simon Jennings will be joining us at the end of this month in the newly created role of Chief Revenue and Digital Officer. Simon joins us from Torstar Digital, most recently as its Executive Vice President and President of Olive Media. We are excited to have wooed Simon to the Postmedia family and this critically important portfolio. I expect you ll be hearing a lot more as Simon turns his attention to growing revenue development strategies and digital initiatives at Postmedia. In restructuring the executive team at Postmedia, we also announced today that Wayne Parrish becomes Chief Operating Officer. Wayne will continue to oversee Postmedia s transformation and business development and will now oversee Postmedia s newspaper operations, too. With the critical importance of aligning our people resources to our business results, I am also making the change of promoting Michelle Hall to Executive Vice President of Human Resources and she will report directly to me. Our Strategy for the year ahead encompasses four strategic imperatives: Audience Development Customer Development Content & Product Development And People Development Audience Development is about attracting high value audiences to all of our platforms and developing the insights about our audiences that will help shape our product development and client offerings. Customer Development means working closely and Working in collaboration with our advertisers to offer smarter solutions that leverage all of our current and developing platforms. When we talk about Content and Product Development we must first and foremost talk about journalism. It is at the core of what we do at Postmedia and what we have always done, through our brands that reach back two centuries. We continue to add to our stable of editorial stars. Andrew Coyne, national affairs, and Matthew Fisher, international affairs, are the latest appointees to the Postmedia News Service. 6

7 Andrew Coyne is one of the most respected and known political writers and commentators in Canada. A National Post original, Andrew was most recently with MacLean s Magazine. Matthew Fisher is an award winning foreign correspondent who has, over the course of his career, travelled to 158 countries and has covered 14 wars, spending much of the past 8 years in Afghanistan travelling there 24 times and staying for months at a time. They join a strong group of marquee columnists assembled from both outside and inside Postmedia, starting with Christie Blatchford, considered by many to be one of the best journalists in the country. Covering federal politics in Ottawa are award-winning columnists Stephen Maher, former Ottawa bureau chief for the Halifax Chronicle Herald, and Michael Den Tandt, most recently national columnist and Comment Editor for Sun Media. In Sports we have long-time staff columnist Cam Cole from the Vancouver Sun and Bruce Arthur from National Post and TSN filing stories for the chain. Our journalism stars will elevate the quality of all of our content across print and digital brands. Our People everyone across Postmedia Network are tasked with delivering results every day. Meeting and exceeding the objectives of our business strategy is linked to our success as a company. We are committed to celebrating and recognizing a culture of collaboration, innovation and transformation. Ladies and Gentlemen, our ongoing focus on transforming this company into a media company of the future and delivering the quality products that our audiences and advertisers expect from us will be our continued commitment in the year ahead. I would like to thank you, our shareholders for your ongoing support of our company. I would now like to turn the meeting back over to the Chairman of our Board. Mr. Chairman 7