Tuesday, March 10, 2009

Maclean’s is the real threat

Having just heard from newly-neocon Maclean’s magazine that they are declining to publish my response to a particularly execrable opinion piece by Andrew Coyne, I suppose I will have to publish it myself. Thanks heavens for the blogosphere. Now, will anyone notice?

Dear Editor,

Andrew Coyne sets up a classic false dichotomy in arguing against broadcasting regulation in the age of the Internet. ("The CRTC isn’t just a nuisance now, it’s a real threat," Feb. 25.) By framing the "conundrum at the heart of CanCon" as between two alternatives only – "was it about art, or was it about politics?" – he conveniently omits a third possibility that better justifies what he would remove. Canadian content regulations have always been more about preserving our culture, which is continuously at risk of being drowned out by the cacaphonous American media machine next door. Of course Canadians have no valid claim to producing better art than anyone else, but we do by definition produce better Canadian culture. Or, at least, we will as long as Canadian artists are allowed to flourish without being subjected to the type of deregulation Coyne urges. As for his contention that politics are behind CanCon, Coyne might be right. The
historical motive he ascribes to Canadian artists – "to instill the proper feelings of loyalty to the Canadian nation-state in its citizens . . . because that was where the money was" – is cynical in the extreme, however.

Marc Edge
Department of Mass Communication
Sam Houston State University
Huntsville, Texas

A, E! IOU? Call their bluff!

A couple of commentators with considerable insight into the Canadian television industry recently hit the nail right on the head about the CTV and CanWest Global networks cutting back at and threatening to close down local stations. According to Globe and Mail TV critic John Doyle, the moves are “part of a strategy to force a radical redrawing of the Canadian TV landscape.” People still watch TV, noted Doyle – lots of them. It’s just that in an economic downturn advertising revenues drop, making for a short-term imbalance with expenses. In good times, to paraphrase Lord Thomson, TV stations are a licence to print money. “The television industry is not in crisis,” Doyle pointed out. “The economy is in crisis.” Retired BCTV reporter Harvey Oberfeld agreed in a particularly pointed blog post, equating the local programming cuts and threats to close stations with “blackmail attempts or extortion theatrics.”

What CTV and CanWest have done is equivalent to cutting off a hostage’s ear or finger and sending it to the CRTC as a message, warning that unless they get what they want, the hostage takers will exact even more . . . maybe kill off their captives. In this case the captives are their Canadian television channels. They would never do it. It’s all a farce aimed at scaring the CRTC into acquiescence.
The networks, MEthinks, want to take full advantage of their short-term pain to ensure even more long-term gain once the economy recovers. They would like nothing more than to have their obligations to provide Canadian content reduced so they could spend even more on Hollywood programming already carried on the U.S. networks. That’s the part of the Canadian television model that’s “broken.” Our domestic networks (with the obvious exception of the CBC) don’t even want it to be Canadian. At least the CRTC has apparently cottoned on to that fact and has even bruited forcing the networks to spend as much on Cancon as they do on Americon.

The networks also want the CRTC to reconsider (for yet a THIRD time) its plea for money from the cable companies to carry their signals. The CRTC has twice nixed this boondoggle, known as “fee for carriage,” which would see the networks add 50 cents to cable bills for each over-the-air channel carried on cable, which could add up to about $10 for some subscribers. But with their licence renewal hearings upcoming, the networks are pulling out all the stops in pleading poverty and cutting back on local programming to put political pressure on the CRTC.

Last but not least, CTV and CanWest Global are hoping to use this opportunity to also revisit the CRTC’s refusal to allow them to merge their newspaper and television newsrooms in order to save more money by cutting even more jobs. The CRTC drew the line at this aspect of “convergence” at the last licence renewal hearings in 2001, shortly after CTV partnered with the Globe and Mail and CanWest Global gobbled up the Southam newspaper chain from now-jailbird Conrad Black. The feds insisted the networks maintain separate “news management structures” in their print and TV operations, but now the networks want to also have that requirement overturned on the basis of economic necessity.

CanWest CEO Leonard Asper himself admitted recently in a memo to employees that the company is still very profitable. Its problem is its heavy debt load assumed in acquiring the Southam chain and, more recently, a baker’s dozen specialty cable channels from Alliance Atlantis. With the recession, not only have revenues dropped, but so has the company’s stock price (I know, because I’m now a CanWest shareholder), boosting its debt-to-equity ratio above acceptable levels and making its lenders nervous. “These businesses are strong,” Asper assured CanWest staff as media reports of its imminent demise swirled. “They will continue to operate.”
In all the media coverage what is often overlooked is that Canwest's businesses are highly profitable and generate well over $500-million a year in operating profits. Our issue is that in this recession, those profits have been reduced by a serious downturn in revenue so our "mortgage" is too high for our lenders liking.
I always tell my students that the stock market is less a thermometer that takes the temperature of a company than a barometer that responds to indications of what might happen to it in the future. Media companies always get hit first and hardest in a recession because investors realize that advertising is the first discretionary expense to go. They’re always the first to bounce back at any sign of recovery, too. CanWest is in a double bind because the market seems to strongly disapprove of the Asper heirs expensively using the media empire left to them by their late father Izzy to further his political agenda and extend it globally. They not only prompted a public relations disaster by imposing a strong neoliberal and pro-Israel viewpoint on their Canadian media holdings, they have also invested in dubious foreign adventures. They bought the hawkish but money-losing New Republic magazine in the U.S. a couple of years ago (which they recently sold back to its former owner at an undisclosed but doubtless bargain price) and have also expanded into the Middle East by acquiring radio stations in Turkey. With economic storm clouds on the horizon, CanWest also declined recently to unload its majority ownership of Network TEN in Australia, which may turn out to be the misstep that takes CanWest down, or at least Asper family control of it.

CTV and CanWest are threatening to close down their subsidiary networks, alphabetized respectively as A and E!, if the CRTC does not give in to their demands. I say the CRTC should call their bluff. If the big networks don’t want those station licences any more or are not prepared to live up to the promises they made to get them, let them turn them back in. I’m sure the CRTC would find more than a few willing takers at their usual price. Which is, of course, free.