CanWest’s financial troubles comes from restrictive journalistic practices

by Nick Filmore

Canwest president Leonard Asper says the media overlooks the fact that the company’s businesses are highly profitable. (Ken Gigliotti/Canadian Press/Winnipeg Free Press)

The long-anticipated collapse of the Asper family’s Canwest Global media empire — which included 11 daily newspapers, the Global TV network of 11 stations, 13 specialty TV channels and more than 80 websites — in October 2009 was the latest development in the shameful history of corporate-owned media in Canada.

Canwest and other media corporations claim to care about quality journalism, but they’ve deceived Canadians for decades — censoring news to protect their profits, pandering to the interests of the corporate world, and neglecting to invest adequately in their news operations.

The Aspers have been the worst of a bad lot. In a bid to create one of the world’s largest media companies, Leonard Asper unwisely used every penny of credit he could get his hands on to buy other media companies, including some in Australia and Turkey. But then millions of dollars in advertising left the Canwest TV network and newspapers for the Internet and, at the same time, businesses began to reduce their newspaper ads. So, revenue problems, added to the company’s debt difficulties, created a financial crisis for Canwest. In response, Leonard, in a desperate effort to save the family’s empire, knocked the stuffing out of what already had been largely mediocre news operations across the country, rendering the papers and the TV network bone-bare and demoralizing hundreds of employees.

The Canwest cuts are the largest ever carried out by a corporate media company in Canada. While many people lost their jobs or had their pensions reduced, about 20 top executives received bonuses of about $490,000 on average in addition to their already substantial salaries. The Aspers’ debts include $50-million owed to us — the Canadian taxpayers — as well as payments due to the Canada Media Fund, which was established by the federal government as way to help small, money-losing TV stations.

Poor quality papers and low salaries

Over the years, other “bad boys” have exploited their Canadian media properties instead of investing adequately in their news operations. I know this personally, having spent the first four years of my career writing for three of the worst newspaper companies in the country: the Halifax Chronicle-Herald, the Thomson-owned Charlottetown Guardian, and K.C. Irving’s Telegraph-Journal in Saint John, N.B

I recall the Telegraph-Journal as being a dreadful place to work in the late 1960s. Despite the fact that K.C. was a billionaire and that the company made millions from its near-media monopoly in the province, everyone in the Saint John newsroom was poorly paid. I suspected one editor didn’t make enough to look after his family of five. Most journalists lived in fear of the newspaper’s publisher, Ralph Costello. Every evening, when Costello trudged his way through the newsroom, making his ritual stop to have a sip at the water cooler, the place went totally silent. The paper, void of personality, was often used to either promote or protect the Irving Empire. One night as we were getting ready to publish a photo of a police checkpoint at the New Brunswick-Quebec border, we had to blackout the image of an Irving Oil sign that happened to appear in an upper corner of the photo.

For decades powerful media corporations like the Irvings have decided what news Canadians should read, hear, and see. By reading just about any Canadian daily newspaper it’s not hard to see how the values of corporate-owned media are quite different from the values and interests of the majority of Canadians. Corporate media tend to favor right-wing political ideas, pay a lot of attention to the views of the powerful and rich, but not make a priority of dealing with issues such as income inequality among Canadians or poverty reduction. (How corporate-owned media filters the news to suit their own interests will be dealt with in Part 2 of this series of articles.)

An example of corporate-media priorities: During November, a number of newspapers gave page after page over to business experts chattering about the various burps of the financial markets, while a landmark report that one in 10 Canadian children live in poverty was covered in one story in most papers, with no follow up. When media gives little attention to an issue such as child poverty, they’re abandoning one of their vital roles — helping protect the rights of those in society who are powerless to protect themselves.

Corporate-owned media losing its hold on the public

But times in the media world are changing, and the stranglehold corporate media has had on the news is changing too! Corporate-owned media, particularly the newspaper sector, is struggling financially and is losing readers. At the same time, the Internet is becoming the preferred source of news for a growing number of people. Traditional media — and by this I mean corporate-owned newspapers, TV and radio — are losing millions of dollars in advertising because Internet sites such as craigslist provide free classifieds. And when a newspaper sets up its own website, an ad that sold for $1,000 in its paper brings in only about $100 on the Internet. Then there are the millions of dollars traditional media has lost because of the poor economy.

So far the country has had only one daily newspaper close, the Halifax Daily News, because of economic problems. On the TV side, CTVglobemedia closed its station in Brandon, and Canwest Global closed down operations in Red Deer.

One way that Canwest and Torstar, the corporate owner of The Toronto Star, are going to save money is a little unsavory: They’re firing highly skilled production workers and editors and contracting out their jobs to companies that will pay other workers much lower wages. Almost certainly other papers will do the same thing.

The entire television sector is in flux with the television companies and cable firms fighting over whether cable should pay to carry television signals, and the CRTC seemingly afraid to make a decision for fear it will be overruled by the government. With more specialty channels coming into the mix all the time, and the prospect of a lot more people watching programming directly via the Internet, the three main networks that the public relies on for most of its TV news — CTV, Global and the CBC — are likely to lose viewers, have financial difficulties, and face the prospect of further cuts to their news budgets.

Budget cuts result in poorer quality of news

Because of severe budget cutbacks, most newsrooms across the country are operating with far fewer resources than in the past, and its showing.

A scan of several daily papers reveals a serious shortage of in-dept, thoughtful articles dealing with important issues. There’s weak reporting by inexperienced journalists, gaps in coverage, and a failure to follow up on big stories. At the same time, considerable space is given over to dubious material: page after page is devoted to crime of all sorts, entertainment, fawning profiles of prominent people, U.S. stories written as though we were Americans, and too many “man bites dog” stories. Many weekly newspapers — once a source of interesting, colorful local information — have been snapped up by media corporations, and their unique character has been destroyed.

The quality of much of the country’s TV and radio news reporting has also fallen off. In particular, both CTV and Global national and local TV news programs are loaded with stories picked up from the U.S. networks that are basically “filler” and of little interest to most Canadians. Serious journalism is ignored in favor of “infotainment.” At the CBC, corporation executives turned Newsworld into a hyped, superficial, all-news channel, despite the fact that Canadians already have access to four similar channels. Graham Spry, the father of the CBC, has probably rolled over in his grave more than once because of the deterioration of the once-proud news service.

Will new owners invest adequately in Canwest papers?

Meanwhile, the fate of 10 former Canwest daily papers — which could be considered the backbone of daily journalism across much of the country — is in the hands of creditors who are looking for buyers. Historically, the papers have been vital to the development and well-being of their communities. Included are the Calgary Herald, the Edmonton Journal, the Montreal Gazette, The Ottawa Citizen, the Regina Leader-Post, the Saskatoon StarPhoenix, the Vancouver Province, The Vancouver Sun, the Victoria Times Colonist and The Windsor Star.

The Globe and Mail reported in October that National Post president Paul Godfrey, formerly head of the Sun chain of papers, had secured the support of enough investors to make a bid for several or all of the 10 papers. Torstar, publisher of The Toronto Star, may bid for some of the Ontario papers, so there could be some rival bidding. No matter who acquires the papers, the most important question is whether the diminished economic realities will allow the new owners to restore the papers’ editorial departments to their previous levels of operation.

Circulation drops over the decades

Of all our traditional media, we should be most concerned about the future of daily newspapers because they’re the source of most of our news, even the news that’s available from dozens of Internet sites. Unfortunately, the decline of daily newspapers in Canada is mirrored in their declining circulation. This falling off of sales didn’t coincide with the growth of Internet use — as a matter of fact, it began almost 60 years ago. Research carried out by Kenneth Goldstein of Communications Management Inc. of Winnipeg shows that during the 1950s the number of newspaper subscriptions exceeded the number of Canadian households. Last year, the equivalent of only 35 per cent of households had paid subscriptions.

Roger Parkinson, a former publisher of The Globe and Mail, said in an e-mail exchange that daily papers are in financial trouble because the traditional for-profit media model is broken. He said the costs of newsprint, printing and paper distribution are too expensive in light of the reduced revenue expectations. The papers with the best chance of surviving, Parkinson said, are “very high quality national papers with a thin, high demographic, highly educated audience who want and need specialized, high quality news and analysis, like The New York Times, The Wall Street Journal and The Globe and Mail.”

• Author’s Note: This is the first of a five-part series that will address the need to develop independent media — print, broadcast and Internet-based — in Canada. This first article explores the reasons why traditional media or corporate media — that is, corporate-owned newspapers, TV, and radio — no longer provide reliable news and information to the Canadian public. The next article, to be circulated the week of December 14, will look at how for-profit corporate media have filtered and censored the news for decades. The series will continue in January with articles on why Canada needs news organizations that are independent of the influences of advertising and corporate values, and how independent projects can be started and funded.
• Is your community poorly served by the traditional media? Would you like to become involved in a group to see if an independent media project could be launched? It is hoped that this series of articles will encourage public-minded groups to set up new media projects in their city, town, or region. Interested groups and individuals are invited to send us their comments on the series along with any ideas on how to establish independent media projects. Send your comments to fillmore0274@rogers.com

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