Big Media News Blues
Then Canada’s dominant urban dailies, titles like the Ottawa Citizen and the Calgary Herald, endured two painful changes of ownership.
Editorial and managerial upheavals brought on by Conrad Black (1996-2000) and Canwest’s Asper family (2000-2010) widened old fault lines and cracked open new ones.
It was this fractured landscape that produced the journalistic malpractice we chronicle in these web pages.
Consider these anomalies in the context of any Journalism 101 textbook:
A journalist who openly boasts about his “conflict of interest” with one of Canada’s sleaziest political backroom operators.
A newspaper chain whose editors and lawyers handle anonymous sources in breach of both the basic codes of journalism and precedents set by the Supreme Court of Canada.
A bankrupt media group scooped up by vulture capitalists, who spurn the opportunity of a fresh beginning by republishing an article that had been subject to litigation against the previous owners for two full years.
The seeds of this dysfunction were sewn during Conrad Black’s takeover of the Southam chain in 1996. Black steered the group’s major daily newspapers sharply to the right, but overreached his ambitions with the costly launch of a new countrywide flagship, the National Post, in 1998.
Black cashed out to Canwest’s Asper family in a two-stage transaction in 2000 and 2001. Politically the Aspers picked up where Black left off, gradually gnawing away at their newspapers’ editorial independence before going spectacularly bankrupt in 2009.
Today, Canada’s biggest newspaper group is owned almost entirely by foreign hedge funds, led by GoldenTree Asset Management of New York.
Under the unlikely moniker Postmedia Network Inc., this consortium of brokers and speculators is well on the way to landing our country’s major dailies exactly where the Aspers left them: as distressed assets, looking for a saviour.
The reason? Too much debt: the former Canwest creditors borrowed some $950 million of the $1.1 billion they paid for the bankrupt chain.
What looked like a bargain in July of 2010 became a crushing burden by the end of the year. Ad sales have been slow to recover from recessionary lows, while circulation revenue has fallen.
Add to that the cost of servicing the debt to their Manhattan bankers, and Postmedia’s first-quarter profits bled down to just $5.6 million, compared with $61.8 million a year earlier under bankruptcy-bound Canwest.
As a result, staffers at Postmedia’s newspapers report that cutbacks are biting deeper, with casual workers in newsrooms recently having their duties reduced by one day a week. Cuts to full time employees now appear likely.
Meantime the clock is ticking on Postmedia’s board of directors. They’re mainly financiers who contrived the highly leveraged acquisition in the hope of turning a quick profit by way of a public stock offering.
But that IPO remains little more than a twinkle in the eyes of Postmedia chairman Paul Godfrey, who was forced last summer to delay the market offering until August of this year at the earliest.
Undeniably, the media malaise known as concentration of ownership has led to chaos.
As you navigate these pages, decide for yourself how Big Media News Blues affects our way of life in Canada.
From out team’s perspective, as we battle them in open Court, the management and lawyers of our biggest newspaper chain behave as though truth and integrity are expendable.
They appear to believe that if covert links with political figures sell newspapers and mouse clicks, then conflict of interest is not such a bad thing.
We beg to differ. Just watch us.