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The Globe and Mail

CanWest and the future of Canadian journalism

Carleton Journalism professor Chris Waddell

Bill Grimshaw

On Tuesday, Canada's largest media empire took its first step toward a historic breakup, as debt-laden CanWest Global Communications Corp. sought court protection from creditors to shelter some of its most crucial assets.

It was a move the company's chief executive officer, Leonard Asper, tried desperately to avoid over the past year, agonizing in private that the business founded by his late father, Izzy Asper, 35 years ago would be forever tainted by the stigma of a filing aimed at staving off bankruptcy.

The restructuring, which includes the National Post newspaper and the Global Television network, will now lead to what would be the biggest sale of media assets the country has ever seen, including the potential selloff of a national newspaper chain and the auction of a major television network.

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How will CanWest's restructuring change the Canadian media landscape?

Christopher Waddell, associate professor and director of the Carleton school of Journalism and Communication, took reader questions in a live discussion. Thank you to everyone who participated.

  • Read through the discussion as it appeared live using our CoveritLive tool below, or scroll down to read through the questions and answers.

Professor Waddell is the first occupant of the school's Carty Chair in Business and Financial Journalism, the first chair of its kind in Canada.

His career highlights include serving as CBC Television's parliamentary bureau chief in Ottawa, and various positions at The Globe and Mail, including ROB reporter, Ottawa bureau chief and national editor. In his journalism career, he has won two National Newspaper Awards for business reporting, and programs he supervised at CBC Television won six Gemini awards for television excellence.

<iframe src="" scrolling="no" height="650px" width="600px" frameBorder ="0" ><a href="" >How will CanWest's restructuring affect the Canadian media landscape?</a></iframe>

Questions and answers

Claire Neary, Chris, some of our readers have been posting their thoughts in our comments area, and many have touched on the general decline in advertising many newspapers and media organizations have faced over the past year. How much of an effect do you think this had on CanWest's bankruptcy protection filing and how do you think it may affect the company's restructuring?

Christopher Waddell: Certainly everyone in the media world has seen advertising income fall sharply with the recession but this isn't the first recession we have had and it won't be the last. Ads revenue will recover as the economy regains steam. The problem this time is that no one knows how much of the television audience and newspaper readership will leave for the Internet so it is difficult to know how advertising will be priced in the future as it is based on audience levels. It is equally hard to predict how much and if media companies will be able to make money on the Internet as they can't at the moment. In the short term the recession didn't help CanWest but it's is also true when you are so heavily in debt you have little flexibility to respond to new or unexpected developments.

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Jay: What will CanWest's bankruptcy mean for The Canadian Press, Canada's national wire service. Could new owners start taking more of their product?

Christopher Waddell: That's a very interesting question. CanWest pulled out of Canadian Press several years ago and it has hurt CanWest badly as it misses some news in Canada and has no access to Associated Press material from the US, as AP has an exchange agreement with CP. There were already rumours that CanWest was going to do an election-only deal with CP to get access to its copy if we had had a federal election this fall. I would suspect the two separate companies that will likely emerge from this - a broadcaster and a newspaper company may each have an interest in striking arrangements with Canadian Press if for no other reason than to provide copy for their web sites.

Sean: Any chance this will lead to the individual newspapers being sold off to different owners?

Christopher Waddell: Yes I think that is possible but only as a second stage. The most likely scenario at the moment would be to combine the National Post with the other newspapers in a newspaper group that would then be either sold to a group of private investors or listed on the market through an IPO. One scenario could be that the new newspaper group owners decide they want to keep the National Post, Montreal Gazette, Ottawa Citizen, Edmonton Journal, Calgary Herald and Vancouver Sun giving the company a presence in almost all the major English-language markets. In such a world, the Windsor Star, Saskatoon Star-Phoenix, Regina Leader-Post and maybe even the Vancouver Province could be seen as expendable and sold to raise money to reduce newspaper group debts.

Claire Neary, A couple of readers have asked about the fate of the National Post and how that fate could affect other Canadian newspapers like The Globe and Mail. What are your thoughts?

Christopher Waddell: I would be very surprised if the National Post did not survive. Without the Post, the newspaper group would have no access to the Toronto market which is a very large and important advertising market. Without Toronto an advertiser really isn't placing a national ad. At the same time the Financial Post has already been integrated into CanWest papers as a couple of pages in each paper's business section every day. That gives the newspaper group an ability to sell national ads that reach more readers than an ad in the Report on Business and I suspect that will be a key marketing strategy of the newspaper group.

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John: Is there enough online revenue out there to sustain the news rooms of newspapers like the CanWest papers?

Christopher Waddell: Not right now. That's the big challenge everyone in the media is facing. Outside of the Wall Street Journal and the Financial Times no one has been successful at charging for access to web sites but that's the direction media owners would like to go. Rupert Murdoch of News Corp. has already said that's how he wants to go and others are busy developing models for online subscriptions, micro-payments for stories etc. I don't think anyone believe that online advertising can support online news the way that print advertising has supported newspapers for decades. The challenge is figuring out how much the public will pay for what. It would be fascinating for different news organizations to launch different approaches and see what does and doesn't work.

Claire Neary, Any idea what those approaches might involve?

Christopher Waddell: Sure, it could be everything from getting a certain number of articles for free every month then paying something for a few more and more for more after that to subscriptions, to a mixed model that may lead to producing a paper only online some days and in print and online on others (no Monday papers for instance which except for weekend sports are pretty thin on content), to charging a monthly or annual subscription. It may also involve different delivery means - the Kindle once it is allowed in Canada or other forms of electronic readers, subscriptions to headline services. There is a tremendous range of technology out there for reading text - it comes down to the imagination of other producing the material in how they want to market it.

Karen: There's been some buzz in the freelance world about what this will mean for the health of Canada's media landscape. Do you think this is a precursor to de-conglomeration? If so, what effect do you think that could have on the swath of laid-off reporters/editors who are currently looking for work?

Christopher Waddell: I think de-conglomeration is a possibility and would be a welcome change if it happened. For almost a decade now the media world has been caught up in convergence - the belief that the same material can be produced by a small number of journalists for distribution across the television, print and Internet operations all owned by the same company. That's proven to be an almost complete disaster for everyone involved to the point where it is impossible to identify any benefits that came from convergence. De-conglomeration (if that's a word) presents possibilities for more employment but that likely won't come for a while. Independent owners of newspapers or television stations, should they emerge, will likely be very cautious with spending initially until they decide what print-broadcast-Internet mixture model best serves their audience and they see some stability in their operation and the economy.

Claire Neary: Aside from employment prospects and balance sheets, what kinds of effects do you think de-conglomeration might have on the quality of journalism produced in Canada?

Christopher Waddell: The public is best served with more rather than less competition. The more voices out there on any given issue the wider range of opinion the public receives. The more reporters and news organization chasing a story the more likely it is that the story will be advanced by someone finding out something that others don't know. Conglomeration has also forced a degree of homogeneity on media in Canada that prevents it from reflecting the communities in which they are located and operate. For instance all CanWest newspaper websites are identical. Global, CTV and CBC local newscasts all look identical and operate to identical formulas regardless of the community in which they are located. As a result viewers and readers see less and less of what is distinctive about their community in their newspaper or newscasts and that has had led to declines in audience and readership. More independent ownership of the media significantly heightens the potential for more competition and also means more potential for innovation, experimentation and willingness to take risks at a time when the media, which is traditionally very conservative, desperately needs an infusion of new thinking.

Sean: To add to Claire's question: Has there been any buzz among insiders about using this as an opportunity to craft an entire new strategy for the daily newspaper? I'm thinking of tabloid-sized European papers with radical layouts and designs, or the trend to developing "hyperlocal" content rather than trying to cover everything.

Christopher Waddell: That's an example of the innovation or experimentation I was talking about that so far hasn't happened here. Some papers are playing around with hyper-local web sites linked to their papers as a way of trying to figure out how to re-engage local readers with a mixture of paper and web. Conglomerates aren't known for being fast on their feet or for being innovative. Some of the innovation and experimentation these days has jumped directly to the web such as The Tyee in Vancouver with others contemplating similar projects but in those cases mostly they are thinking of going directly to the web as it saves so much in paper, production and distribution costs.

Joe: If things are so uncertain for journalists these days because of the lack of revenue online then what are you telling your students? It doesn't make sense for somebody to go into journalism right now does it? Certainly CanWest or any other media organization won't be hiring any time soon ... I know you don't want to discourage students but please be realistic in your answer.

Klaus: Based on everything currently going on what would be your advice to a recent journalism school graduate looking to succeed in the world of Canadian media?

Christopher Waddell: I think there are great opportunities in journalism even if these are difficult times. I think people are still willing to pay for information that helps them make decisions in their daily lives about their welfare, their families, their retirement and investments, the state of and problems in their communities and so on. At the same time the equipment needed to produce journalism whether print or broadcast has never been cheaper to buy, easily to use, lighter to transport and communications from anywhere to anywhere has never been easier or cheaper. All those things tell me that journalism has a future. At the moment we are in a period of uncertainty but if you had told people a few years ago that record labels like Arts and Crafts in Toronto or bands like Metric and others could do well outside the traditional structure of powerful record labels and the music industry no one would have believed you. Similarly no one in the traditional music industry thought digital music could ever be made to pay until iTunes came along. I think there will always be a place, whether in journalism or somewhere else, for people who can write, present information in written, visual or oral forms, can interview people, can take complicated issues and can explain them in terms non-experts can understand, can impose order and structure on a set of random facts and pieces of information and can meet a deadline in doing it. That what we hope our journalism students can do when they graduate and I think there is a huge market for those skills in journalism and lots of other occupations and will continue to be for many years to come.

Joe: But in this period of transformation the odds of landing a job in journalism are slim correct? Until media companies figure out a way to get paid for online content ... Is the future just to fragmented? Will it all be about micro payments. Big general news rooms will be dead no? Except for the Globe and NY Times. Your thoughts?

Christopher Waddell: This is a time of considerable uncertainty and upheaval so I wouldn't want to make predictions such as big news rooms will be dead. This is a great climate for someone to come up with new ideas and approaches that combine information and technology in a different way. media companies are unwilling to commit to full time jobs for many people entering the business - preferring to put them on contract or some sort of casual relationship. That may change as the economy improves or as the future becomes a little clearer. In the meantime some students who want to be journalists are exploring the world of freelancing (which is tough) and often leaving Canada to do it.

Kevin McColl: Do you see Torstar trying to make a bid giving them a national chain?

Michael T.: What are the chances of the Toronto Star buying some of the Ontario papers?

Christopher Waddell: There could be two Torstar possibilities - the Windsor Star if the newspaper group decides to sell it and some of CanWest's community papers which presumably Metroland - the Star's community division - might try to buy. I don't think the newspaper group would consider selling the Ottawa Citizen. I know this sounds silly to say considering their complete lack of action or interest in the past (other than commissioning endless studies that have sat on shelves) but at some point might federal government policy be concerned about concentration of ownership. Don't forget Torstar owns a significant chunk of CTVGlobemedia. The other issue of course is that Torstar would incur additional debt to do it at a time when lenders may see media acquisitions to be more risky than in the past if for no other reason than it seems likely that the days of 20-30 per cent profit margins for media firms are history.

Ivan: What impact, if any, will the CanWest situation have specifically on CTVGlobemedia?

Christopher Waddell: I don't think it will have any immediate impact. Global TV should remain as a competitor to CTV and a strong one particularly in western Canada and I certainly hope we don't revert to one national newspaper.

Jim Bulgosi: At one time Moses Znaimer was trying to build a national network with the A channels City. Rogers wanted to buy some of it and was denied. Global was building a national channel with some gaps across the country. Will there ever be a third truly national network in this country?

Christopher Waddell: Probably not. The real focus these days is in specialty channels distributed over cable or satellite and in pay per view. That's where profit margins are still large and in the case of specialty channels owners have a steady stream of revenue from subscribers. Even in the US three over the air networks are having their troubles these days.

BC Reader: And what about the dozen or so CanWest community papers in the Lower Mainland of BC? They appear to be making money - no drop in paper sizes over the past few years - yet there's rarely any mention of their existence in these restructuring/bankruptcy stories.

Christopher Waddell: True enough. It is possible that they could be bundled together and sold to a separate owner or group of owners similar to the Black papers (not Conrad) now in British Columbia. Weekly and community newspapers have generally been less seriously affected by the advertising downturn and Internet competition than large metropolitan papers which could make them an attractive investment for someone.

Doug: Hello. A sidestep from the economic/financial questions: the Globe's own Lawrence Martin has pointed out that Canadian mass market print media (with the possible exception of the Toronto Star) are editorially tilted to the right, and often do not either give credit to the NDP or approach issues and stories from a left-of-centre perspective (by that I mean taking issues the left considers important seriously, not adopting a leftish bias on the news pages. The Guardian might be considered an example.) Anyway, my question is: do you see any potential owner or ownership group that might provide a broader viewpoint by the CanWest papers?

Christopher Waddell: That's always possible. It depends on who is out there who may want to purchase the group of papers or individual newspapers should they be put on the market. The Guardian is a bit unique in its operation as it is owned by a trust. Generally most papers tend to be owned by very well-off individuals or corporations neither of whom have much of a history of left-wing thinking. At various points in the past there were musing about the trade union moving owning its own media outlet but that hasn't really gone anywhere. If I could rephrase your question slightly I think there is a potential for a broader range of viewpoints being expressed by former CanWest papers should they be in the hands of a series of different owners but how those views may be placed on a left-right spectrum is impossible to predict without knowing who will own them. Individual ownership would give each paper a greater chance to reflect the views of their own community than sometimes exists in a chain.

Jeff: I think this is great news, and I echo your thoughts about Canadians having access to diverging points of view, rather than the homogeneous news that we currently receive. My main concern is with news coverage on the international stage - we currently are getting only a certain spin based on where the media companies' allegiances lie. What are your thoughts on coverage of international news as a result of the breaking up of massive conglomerates?

Christopher Waddell: I would like to think there would be a revival of Canadians covering the world for Canadians but in truth that's probably not likely particularly if newspapers are individually owned. However if there is more competition out there one organization may decide that its future lies in international news and so focuses more on that than local news. It's hard to predict who may see what niche and decide to try to take advantage of it. One problem though is that the Internet gives news readers access to news from so many places around the world in real time that news organizations would have to think hard about what they could provide that readers would think is distinctive enough to make it worth the cost of doing it.

Nicola: How will this affect local newspapers? What was wrong with the strategy of buying up many papers?

Christopher Waddell: It depends what you define as local. If you mean community papers or weeklies, probably not much impact. The problem in buying up many papers is that it has been followed by layoffs and consolidation that has generally meant papers have fewer reporters, more centrally designed and controlled packages of information are given to them and there is less flexibility for individual publishers and editors to make news and management decisions to shape each paper's content to the local community and to cover local stories and issues. Readers notice that and they stop reading.

Patrick: What is your opinion regarding what the fate of the Global Television Network will be? Will they continue to air American programming into the foreseeable future or do you believe that the US studios will pull their shows from Global?

Guest: I'm interested to know what is the predicted outcome of the two CanWest Canadian television groups as a result of the recent filings, and potential subsequent actions: 1) the Global TV network group and 2) the newer, digital specialty channel group bought from Alliance Atlantis, which is not part of the filing.

Alberta Reader: Who are the most likely players in your mind that would interested in the broadcast assets if the Global Television Network and Specialties were to be broken up?

Christopher Waddell: The US studios won't pull their shows from Canada unless CTV, Global and CBC stop paying for them. In fact some argue that the financial difficulties the over the air networks currently face is in part the result of paying too much for US programming. I would guess the Global network will stay pretty much the same and the specialty channels could be sold either individually or as a group to one of the other specialty players in Canada but I have no inside ideas on who might be buyers in either case. The one thing I do know is that foreign ownership restrictions currently prevent non-Canadians from buying the television assets. I don't think those foreign ownership restrictions benefit Canada so would hope that they be dropped,. If we are concerned about ensuring we have Canadian content, regulate content and then enforce the regulations, don't pretend we are ensuring content through ownership.

Jane: What role do you think social media (Twitter, Facebook, FlickR) will play in the future of Canadian media?

Christopher Waddell: They are already playing a role in a lot of fascinating ways - everything from tipping news organizations off to stories and events to undermining the ability of the legal system to protect the identities of young offenders, of victims of crimes or to maintain publication bans. They also become a way for the public to contribute to the media and to challenge it. Figuring out how to use social media is one part of the Internet-print-broadcast balance that everyone is trying to find at the moment. I don't think anyone has it yet.

Claire Neary, Any final thoughts, Christopher?

Christopher Waddell: Only that this is going to take some time to work out and some of our assumptions at the moment will turn out to be wrong. The only certainly is that CanWest won't continue as the conglomerate it has been to date. I hope the result is more widespread ownership of the media in Canada, more competition, more surprises in content and a recognition of how wrong-headed and detrimental to public discourse the whole conglomerate-concentrated-converged approach to media ownership has been.

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