Feel-good story for the day: Sales drop at Toronto Star publisher; staff decry cost cuts

(Reuters) – A grim newspaper advertising market continued to hit revenue at Torstar Corp, publisher of Canada’s largest-circulation daily paper, in the first quarter, the company said on Wednesday as its journalists mounted a protest against cost-cutting measures.

In its quest for cash, Torstar said last week it would sell its Harlequin romance-novel publishing business to News Corp for C$455 million ($418 million). The sale helped reassure investors who have worried that the company’s dividend payout is unsustainable, but it leaves Torstar more reliant on a turnaround in its media business.

The softer revenue number for the media business – which publishes the Toronto Star and a string of regional and commuter newspapers and is Torstar’s largest unit – was offset by cost cuts that improved margins, RBC Capital Markets analysts Haran Posner and Drew McReynolds wrote in a note.