Mediacheck

Do Canada's Newspapers Have a Future?

Canwest's buyers must reinvest in readers to survive. And we must radically rethink how our media is bought and sold.

By Mike Bocking, 24 May 2010, TheTyee.ca

Mike Bocking, CEP Local 2000 president

Mike Bocking, president of CEP Local 2000, 'Media Union of BC.'

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Can a Canadian industry that has been abused for more than 15 years by speculators, incompetents and in some cases, outright thievery, reinvent itself to occupy a meaningful place in a fast-changing media world?

What are the chances the new owners of Canwest's newspapers have the vision to accomplish this?

For obvious reasons, I want to believe in a healthy future for the newspaper industry. My union represents about 2,500 newspaper workers in B.C., from journalists to pressmen, from clerks to sales people and many others. For decades, the industry has been very healthy and has provided very good, meaningful jobs to many people. Newspapers have also been a vital part of the social, political and cultural life of our communities and a key sector of the marketplace.

Certainly there are challenges and opportunities to all media because of the Internet and digital technologies, from books to music to television and to magazines and newspapers. But by far, a greater challenge is to free these cultural industries from the financial and corporate predatorism that has dominated newspapers and television, in particular. The recent sale, or resale, of Canwest newspapers is just another small example of a financial process and economic system that needs to be radically rethought.

Last week, an Ontario Superior Court judge approved the sale of Canwest newspapers to a collection of investment funds. Those newspapers include some of the principal metro dailies in Canada, such as the Ottawa Cititizen, the Montreal Gazette, The National Post, the Calgary Herald, the Edmonton Journal, the Regina Leader-Post and the Saskatoon Star-Phoenix.

The impact will be especially big in B.C., where a majority of our newspapers are a part of this group and include the Vancouver Sun, The Province, the Victoria Times-Colonist and the Nanaimo Daily News. It also includes major community newspapers such as the Vancouver Courier, the North Shore News, the Burnaby Now, the Surrey Now, the Maple Ridge Times and the Abbotsford Times, among others.

The sobering price offered for this huge collection of newspapers was only $1.1 billion, about a third of the $3.2 billion paid by Winnipeg's Israel Asper in 2000. The sticker price shock comes from both ends -- those who are surprised those same newspapers are worth that much less after only 10 years ago and those who think $1.1 billion was way too much to pay. The next highest bid was Torstar, owners of the Toronto Star newspaper, for $800 million. Which raises the obvious question -- is there a future for newspapers, whether in print or online?

Reinvest in readers, reflect their values

I believe there can be a sustainable future for our newspapers, but only if their eventual owners are prepared to renew a commitment to their readers that has been severely compromised.

First, they have to substantially reinvest in content. They have to give readers something to read again. Many newsrooms have been chopped by as much as two thirds since the early 1990s. This has had a profound impact on the quality of news and opinions in your newspaper. At one time, both the Sun and Province had a vast range of beat reporters and columnists -- journalists that were experts in their areas and knew their communities and sources intimately. That provided a strong flow of news, debate and opinion that is largely missing now. Reporters were also routinely delegated to spend weeks on investigative pieces that broke issues wide open and influenced the social, political and economic debates in our province. The larger staff also had greater diversity in the reporters themselves, representing the many strains in our community.

So far, the new president and chief executive officer, Paul Godfrey, has confined himself to saying they intend to increase their Internet presence and to grow digital media advertising revenue from the current 10 per cent to 25 per cent. But if there is no reinvestment in journalism, it will be for naught. Readers are no more likely to read pablum on the Internet than they are in print.

Secondly, they need to reconnect with the values that B.C. citizens have and stop pushing a narrow agenda that does not resonate with many readers. When Conrad Black and David Radler bought these newspapers in the mid-'90s they pushed a strange hard-right ideology of social Darwinism and libertarianism that just doesn't speak to most British Columbians other than a handful of Fraser Insitute groupees. The Aspers continued that strain, which has alienated many former readers, who have fled to other news sources. A corporate media source will never become left-leaning, but a more middle-of-the-road approach that makes greater attempts to report on and invite in a wider range of opinions and debate would enhance their readership. Many readers simply do not see themselves reflected in today's newspapers.

Rein in the pirates (now US-based, mostly)

Finally, the newspapers have to become free of the financial buccaneering that has ravaged their bottom line and which I fear may continue with this new purchase.

But first, a little recent history.

The pirating began when the Southam newspaper chain was bought by Black and Radler in the mid-nineties. These papers were well-staffed and mostly free of debt and served their communities well. Black and Radler proceeded to build their empire of newspapers, some of it with debt, some with other investors' money, but all financed by hacking staff at most of the newspapers they bought.

(They also had a tendancy for helping themselves, which netted them both prison terms in the U.S. Black remains a guest of the U.S. federal prison system).

The next stage was the adroit flipping of the newspapers to the Aspers in 2000 for far too much money, putting a crushing debt on the chain. Those billions of dollars of debt had to be financed, which meant more squeezing of costs and smaller staffs. That resulted, of course, in declining readership when many realized they were getting far less than they had come to expect from their newspaper.

Now we come to last week's sale and the main question: Who are these guys?

They are basically a collection of hedge funds. U.S. hedge funds, for the most part, led by Golden Tree Asset Management of Park Ave., New York City. Your Vancouver Sun, your Abbotsford Times newspaper, and so on, are now U.S.-owned newspapers. This is a shocking development, not only in this industry but in our democracy. We have seen how intrusive previous owners such as the Aspers and before them, Black and Radler, have been in the operations of every newspaper and the opinions and views expressed in them.

The fact that a Canadian newspaper executive, Paul Godfrey, has offered to be the public Canadian face of the new company does not erase the fact that this chain is now financed and controlled by U.S. citizens and institutions. The $925 million loan owed by Canwest to Canada's big five banks has been replaced with a $700 million loan from New York City's JP Morgan bank, along with other notes and credit arrangements involving the hedge funds. (There is also a small participation by Canadian fund TD Newcrest).

'Here for a good time, not a long time'

If there is any silver lining in this, it is that this American ownership might be fleeting by the very nature of these funds. Golden Tree and others are often described in polite company as being investors in distressed situations. Or in more main street terms -- "vulture funds." Their principle role is to provide double-digit returns to their investors by finding and extracting value from entities that others may have missed or been unwilling to extract or find, perhaps because of longer time considerations. They are not about building value. As one financial columnist described them, echoing the 1980s rock band Trooper, "they're here for a good time, not a long time."

Which takes us to what comes next. Godfrey has announced that their plan is to conduct an initial public offering some time in the summer. In other words, they want to sell shares in the company which should expand the ownership, or perhaps give another player the opportunity to take control. It is possible and perhaps likely that the hedge funds may choose to exit the company at that time, pocketing their profits and moving on to the next "distressed situation," whether it is cars, carpets or carehomes. In the meantime, their primary purpose will be to extract as much value (money) as they can before moving on.

This kind of financial adventurism has got to stop. Cultural industries, which includes newspapers, need responsible, long-term, publicly minded ownership. Another model needs to be developed that places public interest ahead of private greed.

What is happening in the Canadian newspaper industry is, of course, not unique. It is a part of the broader economic mess that has been created by a blind faith in an unregulated market and a culture that rewards short-term financial returns over every other measure of value. [Tyee]

Mike Bocking is president of Local 2000 of the Communications, Energy and Paperworkers Union of Canada.

19 Comments:

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  • seth

    2 years ago

    Neocon News

    aka fishwrap

  • CanadianLatitude

    2 years ago

    Can a Canadian industry that

    Can a Canadian industry that has been abused for more than 15 years by speculators, incompetents and in some cases, outright thievery, reinvent itself to occupy a meaningful place in a fast-changing media world?

    What are the chances the new owners of Canwest's newspapers have the vision to accomplish this?

    For obvious reasons, I want to believe in a healthy future for the newspaper industry. My union represents about 2,500 newspaper workers in B.C., from journalists to pressmen, from clerks to sales people and many others. For decades, the industry has been very healthy and has provided very good, meaningful jobs to many people. Newspapers have also been a vital part of the social, political and cultural life of our communities and a key sector of the marketplace.

    Certainly there are challenges and opportunities to all media because of the Internet and digital technologies, from books to music to television and to magazines and newspapers. But by far, a greater challenge is to free these cultural industries from the financial and corporate predatorism that has dominated newspapers and television, in particular. The recent sale, or resale, of Canwest newspapers is just another small example of a financial process and economic system that needs to be radically rethought.

    Last week, an Ontario Superior Court judge approved the sale of Canwest newspapers to a collection of investment funds. Those newspapers include some of the principal metro dailies in Canada, such as the Ottawa Cititizen, the Montreal Gazette, The National Post, the Calgary Herald, the Edmonton Journal, the Regina Leader-Post and the Saskatoon Star-Phoenix.

    The impact will be especially big in B.C., where a majority of our newspapers are a part of this group and include the Vancouver Sun, The Province, the Victoria Times-Colonist and the Nanaimo Daily News. It also includes major community newspapers such as the Vancouver Courier, the North Shore News, the Burnaby Now, the Surrey Now, the Maple Ridge Times and the Abbotsford Times, among others.
    =============

    No loss since they only report some of the news and not all of it and do whatever they can to make Gordo look good.

  • morechatter

    2 years ago

    Canwest Goes Hog Wild

    And goes under as the gravytrain wasn't going to last forever as no one ever considered there could be hard times ahead. Especially since Canwest controlled the message similar to having Basi and Virk send softball messages Canwest stayed away from issues that could cause the Liberals some discomfort as Campbell uses tax payers money to stay on top. This part I like as it looks like Canwest is not the only one who has hit rock bottom and Campbell is going down for the count and taking his sleezy party with him.
    Canwest will not be missed when it comes to delivering the news because it wasn't something the news team was hired to do as the lot drool over doing the Olympics. Small is better and news can't be canned as its still living and has a life of it own. As we can all see and hear for ourselfs as you can't keep a good story down no more than you can keep a news man from the news.

  • morechatter

    2 years ago

    Canwest does Softball News

    And finds itself out of the ball game and its three strikes your out. Do you think Canwest got into the media business or the progaganda business as there is a fine line that I do believe the Aspers have managed to cross. I know, I know the Aspers are not alone when it comes to trying to control the masses as Harper decks the halls at CBC. Message to Harper: Babies don't vote women do.

  • Skywalker

    2 years ago

    I'm glad morechatter brought up the CBC

    I can see the same thing happening on the CBC. The amount of useless chatter on questionable topics always prompts me to wonder if nobody in the world died today. Maybe we don't always want bad news but one gets tired of artsy stuff and the non news on CBC. There really isn't any good hard-hitting political commentary. Even Peter Gzowsky was often more interesting on all issues and he was really diplomatic. More pablum for the masses. I guess Harper is having his way with all the cuts.

    Can't have the public informed.

  • Mooney

    2 years ago

    Nice article

    But there is a mistake. The author writes,
    "The pirating began when the Southam newspaper chain was bought by Black and Radler in the mid-nineties."

    The real pirating leading to the demise of Canadian newspapers happened in the 80's when lyin Brian Mulroney changed the combines act and allowed his buddy Jail Bird Black to buy up and consolidate Canadian newspapers thereby stifling any opinion that was not far right wing. The result was the turning what used to be a healthy Canadian free press of many voices into one of the largest right wing propaganda machines ever.

    I'm glad they're goin broke. I just wish Lyin Brian was in a cell next to his buddy.

    Canada is a weird place. You can get arrested for not wearing a seat belt but you can betray the public interest with impunity.

  • Camero409

    2 years ago

    Do they have a future?

    Unless the MSM actually start reporting news their future is in doubt. Take the two MSM newspapers in BC and all the community newspapers, they report only what the government wants. They cloud the real news with celebrity BS. There isn't a investigative reporter worth the sweat off my armpits. Unless they get real reporters and quit answering to their corporate masters, they will go the way of the dodo bird. And good riddance!

  • Norman Farrell

    2 years ago

    Harper Gov't cut a deal

    agreeing to avoid enforcing rules that prohibit tax deductions for amounts paid for advertising in non-Canadian controlled publications.

    That raised the salvage value of Canwest Newspapers by several hundreds of millions. Favors alway earn favors so what will the Conservative Party get in return. Be certain it will be more partisan bias in the daily papers. The corporate agenda is already in action. It will get worse.

  • Sam Salmon

    2 years ago

    No One Under 30yo Reads Newspapers

    Ergo there is no future in print-none.

  • Salty

    2 years ago

    Newspapers future

    The real question is: do Canwest newspapers have a future after they're taken public? I doubt it. The sale of Canwest had nothing to do with what was good for newspapers or their values, and everything to do with what was good for the banks.

    The internal and external conditions in which newspapers exist won't change. Oh,there'll be new sales and marketing strategies, but editorial will be thought of last like a neglected child. More sales staff will be hired on first rather than editorial. Besides, what Bocking fails to mention is that, while Asper may be gone, the same group of management jackals on whose watch Canwest was thrown over the cliff are still around and still in charge.

    I doubt Canwests's community newspaper division will fare any better. Even if it gets sold to Black Press or Glacier Media it won't be any better off. Both run on the cheap and have bone thin newsrooms as a rule, so forget any investment in content.

    What Mike Bocking is asking for is hopeful and idealistic, and I agree with him in principle.But I also think we've gone past the point of no return into an area where hope and idealism don't exist anymore.

  • DNA

    2 years ago

    Would better content save the newspapers?

    Of course we're all for better content, but would it save the newspapers? I'm not sure. As Internet use continues to grow, I find more people are abandoning the daily newspaper for what they can find online. When it comes to national and international news, there's no doubt one can find better content online than in a metropolitan daily. We still depend upon a paper like The Sun in BC for provincial and some local news... but will that situation continue? I'm not sure. Habits die hard, and I'll probably continue reading print until I die, but my kids don't read a newspaper, and I don't see them changing their habits soon. I think the key for the newspaper is to find a way to dominate the local news scene, in print and online. Will they do that? Can they find the advertising base to do that? I'm not sure they can.

  • working slog

    2 years ago

    The BS & Spin will just get worse @ the Sun/Province & Canwest

    The BS & Spin will just get worse @ the Sun/Province & Canwest

    With Harper's paranoid cabal of neocon goons greasing the take-over of Canwest of the incompetent Aspers, we will have to get used to even greater right-leaning bias in our local papers soon as they start being run by the National Post gang.

    The National Post has, and will always be, nothing more than a cheap rag to carry neo-con rants in Canada and with the recent buy-out of CanWest by this gang of editorial thugs, we can expect that this conservative version of yellow journalism will be parroted in all of these acquired CanWest assets.

    We can only hope that the National Post group and their reputation of right-sided bias and total lack of demographic awareness, will turn all of these papers into the same big money losers that the National Post has been. Then perhaps, with a little luck and persuasion, someone with some journalistic integrity can come in and pick up the pieces.

    Until then, I will not trust or believe a word they print.

  • farmboy

    2 years ago

    Too late

    Sam Salmon has it right. Very few under 30's pick up a newspaper for anything more than hockey stats. The chance of them stumbling onto anything else that would turn them into regular readers is slim indeed. I'm well past 30 and was a daily reader when I was that age but I gave up on the major dailies years ago. If you are tired of house and condo sales pitches and couldn't care less what pack of millionaire's scored more goals or runs than what other pack of millionaire's why would you bother? The little bits of shallow and often slanted reporting are downright frustrating and as noted in the article, commentary that doesn't resonate with anyone beyond the walls of the Fraser Institute. Those big dailies will lurch along in time to the financial pelvic thrusts of their new Wall Street owners for a while yet. In a few years, when us boomers tire of looking for people we know in the obits, they'll be left chasing the budgerigar market.

  • zalm

    2 years ago

    My sympathies, Mike

    Your members are indeed toast. I can see no future for them. May I suggest that the union continue to look to alternative strategies to employ your members in enterprises that do have a future, and that more equitably represent their interests, whether they be alternative media or at least in entertainment, which supposedly nets a profit.

    Union pension funds are always looking for good investments in socially-equitable enterprises....

  • circle A

    2 years ago

    Fish wrap!

    absolute garbage cover to cover. canwest ,globe,black press,torstar,i have not spent 1 cent on this trash in 15 years. there`s plenty of real journalism to be found on the net, free of charge! and of course tyee.

  • Advocate7

    2 years ago

    Important Stories Neglected by the MSM and the Tyee

    I agree with Camero409. The MSM tends to do "pump pieces" for business sectors and disguises them as news stories that anyone with half a brain can see through. The T-C and Sun's regular "pump pieces" for real estate developers are good examples. They discredit the credibility of both the newspaper and the reporter. Even the Tyee is not immune to this. It has been almost 2 years since the Tyee has done a story on strata issues or other problems experienced by home owners even after it was spoon fed story ideas and potential contacts. This makes it appear that the Tyee has an "agenda" that excludes the concerns of home owners.

  • MontyM

    2 years ago

    Be careful what you wish for

    How is it that so many of you deem our dailies to be trash, and the reporters "not worth the sweat off your armpits" when you claim you don't read them?

    In fact, the excellent work being done by so many of those reporters (Kim Bolan, Denise Ryan, Douglas Todd to name a few) -- considering the cuts and limitations they have been forced to work with -- is astonishing. A quick look at the '09 Jack Webster awards shows they are still hitting the issues and getting recognized for it.

    With very rare exceptions (like The Tyee), this emaciated version of the mainstream media is still preferable to the ignorant drivel and misinformation that flourishes online.

    The current model of free content is clearly not sustainable. If old media does fail, and the lack of adequate revenue to pay educated, trained and ethical reporters leaves you with only the crap that's out there now, do not be surprised if you find yourself eating your own words.

  • circle A

    2 years ago

    what a joke!

    webster awards, a bunch of corporate suckholes patting each other on the back.

  • MontyM

    2 years ago

    Really?

    I wouldn't categorize The Tyee that way; it was a finalist in the print categories.

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