Canwest hurting
The most interesting thing about the fourth-quarter results released by Canwest — with a shocking $1.02 billion loss — is that the newspaper division is making good money, albeit less than last year. Newspapers in the former…
The most interesting thing about the fourth-quarter results released by Canwest — with a shocking $1.02 billion loss — is that the newspaper division is making good money, albeit less than last year.
Newspapers in the former Southam/Hollinger chain are apparently doing just fine despite the recent economic upheaval: Canwest reported operating profit of $54-million on revenue of $300-million in its newspaper division. (The company reported a 13 per cent increase in operating profit, to $558-million.) The source of the company’s troubles is the massive debt the Aspers took on in their buying sprees. John Partridge reported in the Globe and Mail, “Most of the company’s debt was assumed to buy Conrad Black’s Canadian newspaper empire in 2000, and, last year, Alliance Atlantis Communications Corp.’s stable of specialty channels.”
In announcing the quarterly results Canwest chief executive officer Leonard Asper once again blamed Canada’s regulatory forces for the company’s troubles. Noted the Globe: “Mr. Asper also cited what he called an “unbalanced regulatory framework” for Canadian conventional TV broadcasters and increased competition from specialty TV and non-traditional media.” In the previous Canwest release of Nov. 12 that announced Canwest would eliminate the livings of 560 human beings, five per cent of its work force — Canwest titled its news release “Canwest Streamlines Operations” — Asper targeted the CRTC for failing to do as CanWest wishes. He said then that assorted Canwest initiatives “have helped us manage costs and reduce our workforce. However, the current environment requires that we go further – especially in light of the CRTC’s failure to adequately recognize the structural issues facing conventional broadcasters.” (The underscore and bolding is mine.)
But wait. Media in Canada has one of the most concentrated ownership structures in the developed world. Even the free-marketing U.S., even when it was ruled by neoconservatives, had more controls than Canada on its media to ensure industry competition. Unlike the U.S., Canada allows huge companies like CanWest to own television stations, daily newspapers, a “national” newspaper and community newspapers all in one market. (In the southwestern corner of B.C., Canwest holdings approach monopoly-status.)
I have some questions in response to Asper’s perennial complaints about Canadian regulation. Could it be better for journalism, for media in general, for informed people in a democratic system, for the economy and even for the businesses themselves, to have smaller units in real competition? Could we all be better off if we had a wider range of independent sources of information? Would Canada profit from a quality media not subject to overwhelming control by one family, one board of directors, and to the financial troubles of any one corporate behemoth?
Some answers were attempted, and remain fresh, in The Report on the Canadian News Media by a Senate committee in 2006. The report was the result of the committee’s cross-Canada tour asking questions, with a mandate to “examine and report on the current state of Canadian media industries, emerging trends and developments in these industries; the media’s role, rights, and responsibilities in Canadian society; and current and appropriate future policies …”
Canwest shares at the time of this posting were selling on the Toronto Stock Exchange for 72 pennies, compared to a 52-week high of $7.50.
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