Tag Archives: CanWest

| Media, Navel-gazing

I, for one, welcome our new Postmedia Network Inc. overlords

So, it’s official. At some point during the day on Tuesday, the $1.1-billion deal to purchase the publishing, online and other non-broadcast interests of Canwest Global Communications Corp. was finalized. I, like thousands of others across the country, have a new employer.

Once that happened, changes started happening fast, but they were for the most part cosmetic. Boilerplate notices have been changed (The Gazette’s nameplate on Page A1 now says “a division of Postmedia Network Inc.”, websites say “copyright 2010 Postmedia Network Inc.”), the most noticeable of which is that Canwest News Service, as of about 4pm Tuesday, was officially renamed Postmedia News. Stories from that news service immediately started appearing under that name.

Because the Canwest trademark is under the broadcast side which has been purchased by Shaw, it’s being scrubbed out of every nook and cranny of the publishing side (something few of my colleagues are feeling too upset about). This means changing names of divisions with Canwest in their names, removing references to Canwest to replace them with Postmedia Network, and most likely eventually mean everyone gets new email addresses too, a change many reporters will remember from when @thegazette.southam.ca became @thegazette.canwest.com.

I wish I could tell you of something more substantial behind the scenes, but (a) there isn’t yet that I know about, and (b) if I do know about it, it’s because it’s been announced internally, and you’ll quickly find it reported by other media. Expect announcements soon about new top executives, but I wouldn’t look for any major changes that affect business at the individual newspaper level yet.

One important facet of this whole process is that the former Canwest papers and the Global television network (and other Canwest broadcast interests) are now owned by different companies. So I have no conflict in writing about Global, and no fear of being called into a boss’s office if I point out that they spiced up a news report by adding unrelated footage.

In lieu of fascinating analysis by me, I’ll invite you to read this Financial Post piece about the way Postmedia Network (a company whose name is not to be abbreviated, I’m told) came to be. How the National Post managed to get this kind of information about a company run by the man who was until now CEO of the National Post will remain a mystery…

| Media

Canwest settles with freelancers over copyright lawsuits

This hasn’t gotten a lot of attention outside of the business press, but Canwest has reached multi-million-dollar settlements with freelancers who have sued the company over what they argue are unauthorized uses of their works in electronic databases.

One of the settlements is with Heather Robertson, who leads a rather massive class action lawsuit against a bunch of publishers, and whose case reached the Supreme Court of Canada – and a decision in her favour, which led to the Globe and Mail settling. The case is still pending against other defendants, including ProQuest, Torstar and Rogers.

You can read the Robertson settlement here (PDF).

The other settlement is with a group called the Electronic Rights Defence Committee, which is a group of Gazette freelancers suing Canwest over the same issues, and which had only gotten class-action status last year.

The settlements are valued at $7.5 million and $9 million respectively, but the amount of cash actually distributed will likely come down as Canwest continues to go through restructuring under creditor protection.

The freelancers can thank this process for pushing these ancient cases forward. As the court-appointed monitor overseeing the restructuring put it in his report on the Robertson case (PDF):

The Settlement Agreement greatly reduced a large claim against the LP Entities and the resulting uncertainty to the CCAA Proceeding and facilitated the approval of the Amended AHC Plan by the requisite majority of stakeholders at the Creditors’ Meeting, which approval is vital to the successful restructuring of the LP Entities.

In the Robertson case, the original claim was for $500 million. In the ERDC’s case, $33 million.

Because the restructuring process requires settling outstanding claims, the freelancers’ lawsuits became an issue that it was easier to deal with quickly than fight.

The ERDC estimates it has about 800 writers in its class, which would work out to $11,250 each. This is above the $1,000 limit set for small creditors, which means they would not be getting cash payments in full, but an option for less cash or shares in the new company. The ERDC says it will hold that cash or stock in trust until the distribution is complete.

The settlement also would grant Canwest and its subsidiaries all the rights the freelancers were fighting to protect. In exchange for the cash, Canwest gets rights to use all articles submitted by all freelancers for whatever purpose it wants, including online publication or electronic archiving.

This means one of the primary goals of the ERDC, to render void these we-take-all-your-rights contracts that Canwest and others are forcing new freelancers to sign, will not succeed. Those freelancers who have signed such agreements, allowing Canwest to use their contributions for electronic media, are not considered part of the settlement group.

Players in the ERDC, including chair Mary Soderstrom, have kept quiet (except to announce the deal and promise more later) until the settlement reaches its final approval.

UPDATE (June 28): The ERDC has released a statement:

“We are pleased that freelance writers will eventually receive some compensation for their work used electronically, and that the other side explicitly acknowledges ‘the importance of protection of electronic rights and fair compensation for the electronic dissemination of content’,” said ERDC President Mary Soderstrom. “But we regret strongly that it has taken 13 years to get to this point, and that, because of the protection against creditors proceedings, freelancers will receive amounts much less than the face value of the settlements.”

She added that the ERDC also continues to maintain that contracts which freelancers have been forced to sign with The Gazette and Canwest are unfair.

A slight moral victory, I guess, though kind of empty if Canwest’s freelancing contracts can still demand all these rights at no extra charge.

Those who want to opt out of the class-action settlement have the chance to do so, although I can’t imagine why they would.

| Media

Good news for freelancers

Frozen freelance cheque arrives ... now I can retire!

While many people are up in arms that Canwest asked for – and received – retention payments for top executives while it’s under creditor protection, some good news is also coming for those at the other end of the scale.

Freelancers for The Gazette were resigned to the fact that invoices for work published before Jan. 8 would either not be paid at full price or might never be paid, because as independent contractors the freelancers were considered unsecured creditors after the creditor protection filing (all work done after that is covered under a separate agreement and is being paid as normal).

But recently, I’m told, the court-appointed monitor for Canwest LP has authorized the payment in full of outstanding invoices for freelancers. Many of those freelancers have already reported receiving cheques, and the photo above is one I got last week, covering a tiny bit of work that was frozen from the last invoice.

Meanwhile, on an unrelated note, Le Devoir’s Stéphane Baillargeon talks about the agreement signed between Gesca (which owns La Presse) and the Association des journalistes indépendants du Québec, which covers freelance work done for Gesca.

| TV

Shaw to buy Canwest

The big change for one half of the Canwest empire now has a roadmap: Canwest announced this morning that Shaw Communications would buy a 20% equity interest and 80% controlling interest in Canwest Global once the company emerges from creditor protection.

Coverage at The Globe and Mail (of course, with analysis and more analysis), CBC, Reuters, Canadian Press, Wall Street Journal and Financial Post. Though financial terms won’t be disclosed until after regulatory approval, Shaw is spending at least $65 million on this acquisition.

Canwest Limited Partnership, which owns the National Post, Montreal Gazette, Canada.com and other publishing assets, is unaffected by this. They will still be auctioned off as part of their restructuring.

Corus Cable Empire?

Assuming the deal goes through (and there’s no big reason to believe it won’t), the Shaw family will have control over a worryingly large number of specialty channels in Canada. They have a controlling interest in Corus Entertainment, a company spun off from Shaw to get around a CRTC rule about cable companies owning specialty services – a rule that no longer exists.

Corus owns or has a majority interest in (copy-pasted from Wikipedia):

It also has a 50% share with Astral of the Teletoon channels.

Canwest owns – and Shaw would get:

And the former Alliance Atlantis channels through a deal with Goldman Sachs:

Add to all this minority stakes in mentv, One, Historia and Séries +, and you’ve got a pretty huge specialty empire here, 31 channels. That would put it ahead of CTVglobemedia’s 29 channels, and way ahead of other specialty players Astral Media (9 plus The Movie Network and Super Écran), Quebecor Media (8) and Rogers (6).

It should go without saying that the specialty assets – and not the Global Television Network – are why Shaw is interested in this acquisition.

The release says that Shaw would operate Canwest as a standalone company (instead of, say, just taking its assets and giving them to Corus), but you have to think that some sort of consolidation is going to happen if they can get it past the CRTC.

Another (albeit minor) question is what happens to the few conventional TV stations that Shaw and Corus own. Shaw owns CJBN in Kenora, Ont. (a station with the distinction of being Canada’s lowest-powered non-repeater, at 178 Watts), which is currently a CTV affiliate. Corus, meanwhile, owns CKWS Kingston and CHEX Peterborough in eastern Ontario, both of which carry CBC programming. None of the three stations are in cities with Global stations, so it’s conceivable they could all become Global affiliates or even sold to Canwest and become Global owned and operated stations.

Shaw’s second chance to prove its point

My favourite part of this story comes out of a quote from Canwest chairman Derek Burney (emphasis mine): “We look forward to benefitting from Shaw’s participation in a reinvigorated Canwest, as it is a strong business partner with a proven commitment to the Canadian television broadcasting industry. This significant investment in conventional television should be seen as a big vote of confidence in the industry and its future.”

Of course, Shaw and Canwest have been on the opposite side of the ugly fee-for-carriage debate, with each side spouting half-truths at each other in a bid to scumsuck public support.

Remember those “cable company cash cows”? Funny how useful one of them has suddenly become now that the TV company needs a bailout.

But as much as this is ironic for the Local TV Matters people, it also forces Shaw to prove its point about how conventional television isn’t in need of financial support from cable and satellite companies.

Last year, after Shaw sarcastically offered to buy three stations from CTV for $1, and CTV sarcastically accepted, it later pulled away from the deal, claiming that due dilligence showed the stations were hollowed out shells and work had been outsourced to other stations.

Shaw can’t make that excuse this time. While many Global stations are little more than a newsroom, a couple of editing suites and a green screen, Shaw gets the broadcast centres that control them, and can do with them as they wish.

So will Shaw back down from its tough talk about fee for carriage? Will Canwest pull out of the Local TV Matters group, stuck in the same awkward position as CityTV and TVA where the parent company cares more about protecting cable profits than local television?

We’ll find out within the next few months. (Though by the time Shaw’s acquisition is final, the fee for carriage debate might be over.)

UPDATE: The Financial Post explores a big thorn in the side of this deal: Goldman Sachs, which is still fighting with Canwest over the company that owns the former Alliance Atlantis channels.

| Opinion, TV

Canwest study shows people like Canwest networks

Canwest has released the results of a study that seeks to measure specialty television channels by quality rather than quantity of ratings. Instead of just pure viewer numbers, it seeks to rank networks by how attentive their viewers are, and how likely they are to pay attention to ads.

A cynic might notice that Canwest-owned networks, including Food Network, HGTV, History Television, Showcase (and its sister networks), National Geographic, Mystery TV and TVtropolis, improve their scores under this measurement. Under pure ratings, only one Canwest network (HGTV) comes in the top five, and only three (with History and Showcase) in the top 10. In the other metrics shown, Canwest networks have 2-3 of the top five and 4-6 of the top 10.

That cynic might wonder if Canwest would have released this study if Canwest-owned networks hadn’t fared so well.

| Media, Opinion

Does “Special Information Feature” clearly mean “Advertisement”?

The Sierra Club of Canada is complaining about a series that appeared in Canwest newspapers over the past few weeks sponsored by Shell Canada about the environment and the oil sands in Alberta. (The series also ran in the Toronto Star.)

Coverage by Canadian Press, Fast Forward Weekly, Marketing Magazine.

Shell ad in The Gazette last Saturday

Their complaint is that the advertisement, like most advertorials, tries to pass itself off as news. It’s got headlines and sidebars just like a newspaper page. It’s not obviously trying to sell anything, but instead is presenting information in a journalistic sense. And the word “advertisement” doesn’t appear anywhere.

Instead, it’s described as a “special Canwest information feature on climate change, in partnership with Shell Canada”, lending Canwest’s name (and, presumably, its journalistic integrity) to the advertorial.

What’s interesting to me is that the Sierra Club isn’t complaining to Canwest or to a press council or the Canadian Association of Journalists or Canadian Newspaper Association. Instead, they’re complaining to Advertising Standards Canada.

In other words, they’re not arguing that the newspaper acted unethically. They’re arguing that the advertiser acted unethically, and they’re appealing to the advertiser’s code of ethics.

It really says something, I think, when an advertiser is expected to have better journalistic ethics than a major newspaper chain.

The Sierra Club’s complaint is essentially one about labelling. It’s not labelled as an advertisement or advertorial, but as a “special information feature”, which could mean anything and isn’t clear.

Canwest’s response, to Canadian Press and others, is this:

Canwest communications director Phyllise Gelfand said the stories were printed in a different typeface and laid out in a different style than the rest of the paper. Shell’s “partnership” was referred to at the top of the page.

“That’s enough,” she said. “The average reader would notice the difference.”

I don’t agree. I’m a (former) newspaper editor, and a media critic, and it’s tough for me to understand sometimes what is editorial and what is advertising.

Advertisers and newspaper publishers have come up with all sorts of euphemisms to refer to advertorial content (the word “advertorial” itself, for one). Special information feature. Advertising feature. Marketing feature. Joint venture. Advertising section. Do any of these really clearly say “advertisement” to you, the average reader?

(And the argument about it being in a different typeface holds in print, but not online, where it looks like any other news story except for the byline and the Shell ad)

Of course, if clarity were the goal, it would just come out and say “advertisement”. But the goal isn’t clarity, it’s confusion. It’s for the advertiser to piggyback on the journalistic integrity of the publication and convince readers that the publication somehow endorses what’s being said.

And newspapers are only to happy to comply, sacrificing their integrity bit by bit for short-term financial gain.

| Media

More Canwest news

Since I’m now a former Canwest employee, I guess I don’t have to include that disclaimer anymore.

Some tidbits of news since Canwest’s newspaper arm filed for bankruptcy protection in early January:

The Financial Post, which is owned by Canwest and may be part of a sale (but which isn’t under creditor protection) has a fair picture of what parties might be involved in this asset auction, with pros and cons for each. For most companies, the bottom line seems to be “not interested.”

| Business, Media

Congratulations, you’re an unsecured Canwest creditor

FTI Consulting, one of the groups of lawyers handling Canwest Limited Partnership’s creditor protection filing, has a section on its website devoted to the proceedings. There you can find, among other things, a list of creditors (PDF).

They include, of interest to Montrealers and Gazette followers (in alphabetical order):

  • $253,808.16 to 1001 Dominion Square Management Inc., The Gazette’s landlord
  • $12,726.14 to Agence France-Presse, a newswire
  • $406,505.42 to Amex for corporate credit cards
  • $6,556.34 to the Audit Bureau of Circulations
  • $47,497.80 to Bleu Blanc Rouge, which handles The Gazette’s marketing campaigns
  • $5,213.38 to Bloomberg, another newswire
  • $114,700.77 to the Calgary Flames
  • $74,763.18 to Canada Post
  • $44,237.47 to Canadian Press (even though Canwest no longer uses CP) – listed separately as Canadian Press and The Canadian Press
  • $5,179.91 to CNW for press releases
  • $38,892.90 to Garda for security services
  • $24,035.10 to Getty Images
  • $1 million exactly to GWL Realty Advisors of Edmonton, the largest single non-bank creditor
  • $24,419.64 to Henry’s photo shop
  • $44,100.00 to Ipsos Reid for surveys
  • $21,380.91 to La Presse
  • $22,575.00 to Kleintel, a Montreal-based phone survey company
  • $28,041.92 to Legacy.com, a partner for paid obituaries online
  • $10,450.00 to Loblaws
  • $12,167.94 to the Los Angeles Times – Washington Post, another news service
  • $16,558.62 to Messageries Dynamiques, a Quebecor-owned distribution company
  • $52,783.50 to Microsoft Canada
  • $145,026.49 to the Ministère du revenu du Québec
  • $8,475.66 to the National Newspaper Awards
  • $17,931.06 to Nestle Canada
  • $5,065.31 to New York Times Digital
  • $9,946.29 to the Ontario Press Council
  • $50,400.00 to Orsyp Logiciels, a Montreal-based job schedule software company
  • $90,000.00 to the Régie des alcools, des courses et des jeux
  • $72,930.38 to Rexall Sports Corporation, which owns the Edmonton Oilers
  • $37,153.20 to Rogers Media
  • $34,755.00 to Rogers Publishing
  • $11,841.84 to Saxotech Integrated Mediaware, which is providing a new desktop publishing system for Canwest papers
  • $331,160.57 to Service-Now.com, which … well, it’s anyone’s guess what they actually do.
  • $70,987.96 to Sun Media
  • $15,813.11 to Montreal’s Teleze Inc., a telemarketing company selling Gazette subscriptions
  • $87,499.65 to the Globe and Mail
  • $8,065.02 to New York Times Syndication, yet another news wire
  • $54,485.00 to the Salvation Army in Saskatoon
  • $145,341.3 to Toronto Star Syndication Services and Torstar Syndication Services
  • $10,773.90 to (Chicago) Tribune Media Services
  • $27,151.49 to United Way in Edmonton
  • $6,124.99 to the Winnipeg Free Press
  • $112,481.44 to the Workers’ Compensation Board of British Columbia
  • $15,491.17 to World Entertainment News Network for celebrity gossip
  • $45,986.85 to three radio stations
  • $45,437.84 to four union locals

The list is very long, but two items stand out like a sore thumb because of the extra digits, and those are the ones that really matter in all this:

  • $78,382,191.78 to the syndicate of banks under the senior subordinate credit agreement
  • $449,411,375.34 to senior subordinated notes

That’s (some of) the money Canwest LP owes the banks, and the reason it’s in financial trouble.

What the list doesn’t include, though, are freelancers, those independent contractors who provide stories and photos to newspapers in exchange for a negotiated fee. Most freelancers who did work between mid December and the Jan. 8 filing (and some who did work much earlier than that but weren’t paid or didn’t cash their cheques before the filing) are now grouped in with the paper suppliers, wire services, distributors and anyone else who provides goods and services to the newspapers and websites.

I counted two freelance columnists in The Gazette on the list through their companies:

  • $5,418.00 to L. Ian MacDonald’s Lian Public Affairs Ltd.
  • $9,673.79 to Phil Reimer’s Phil Reimer Communications. He’s Canwest’s travel cruise columnist

Other freelancers, including fine dining columnist Lesley Chesterman, are also out thousands of dollars as a result of this filing. Smaller freelancers (which may include myself, I’m still not sure yet) are out mere hundreds of dollars.

Whether they’ll see any of that money owed depends on how much money is left to give to all the other creditors, and that will depend mostly on the sale price of Canwest LP. The banks have set a floor bid of $950 million, the amount they’re owed for their loans (which means they wouldn’t be paying for the chain but rather exchanging their debt for equity and ownership), but they’re hoping someone will put in a higher bid. The higher the sale price, the more money can go to creditors. But there’s little hope that the price will be high enough to pay 100 cents on the dollar.

That’s very disappointing. The banks won’t fold if they’re out a few hundred million. The wire services aren’t a few thousand dollars from bankruptcy. But some freelancers rely on it as their only source of income, and a few hundred dollars can be the difference between making a rent payment and having an angry landlord.

After Canwest LP filed for creditor protection (not to be confused with bankruptcy, which eliminates debt), it secured so-called debtor-in-posession financing, which allowed it to continue its business. This means that people who did freelance work after Jan. 8 will still get paid (along with other post-filing creditors), as publisher Alan Allnutt explained. That also puts many in a strange position of getting screwed out of payment but still continuing to do business with a company.

If only I understood business, it would all make sense to me.

| Business, In the news, Media, Montreal

I, for one, welcome our new consortium overlords

Over the past few months, rumours had been circulating around the newsroom that some local rich guys were interested in buying a part of the Canwest newspaper chain, including The Gazette.

Today, those rumours prove true. A consortium led by Jerry Grafstein, Raymond Heard and Beryl Wajsman announced it will be submitting a bid to buy The Gazette, the Ottawa Citizen and the National Post, pending due dilligence.

The coverage – Toronto Star, Globe and Mail, CBC, Reuters, Editor & Publisher, Financial Post – all say the same thing, quoting liberally from the news release and saying the three consortium leaders believe in local control of local newspapers.

No price has been mentioned, nor are the other financial backers named.

All three have media cred: Grafstein, a recently retired senator, founded Citytv in Toronto. Heard was managing editor of the Montreal Star and then worked as news director at Global TV in the 80s. Wajsman is the editor of The Suburban and publisher of The Métropolitain. The Globe’s Jane Taber has analysis of their political leanings, in case anyone really cares.

Unions (and unionized employees) look favourably at the central idea of this bid (Lise Lareau of the Canadian Media Guild calls it good news) because it seems to reject a lot of Canwest’s anti-union moves, like centralization and outsourcing, and it’s making all the right noises about local control of local newspapers.

There’s also the unsaid implication that these three care more about respect than profit. (Like sports teams, media outlets tend to be more about ego than the bottom line.)

Looking at Wajsman’s newspapers, there’s at least some reason for optimism. The Suburban is big for a community paper, and while it’s not pure as the white snow, it’s not filled with press releases and it does actually employ journalists. The Métropolitain, meanwhile, is more of a think-tank than anything else, and is clearly not motivated by profit.

But looking at those newspapers also leaves some worried. Wajsman’s editorials are a bit much for even some staunch federalists, and the papers have some clear editorial biases when it comes to things like the Israeli-Palestinian issue (something the Suburban doesn’t have to deal with much but which The Gazette would have to deal with on a daily basis).

Many will also focus on Wajsman’s political past. One person reminded me of his alleged connection to the adscam scandal, others have already created a Facebook group to protest his bid because of his pro-Israel, pro-business, anti-union stances.

Though I disagree with most of what he writes in Suburban editorials (and most of the opinions written in The Métropolitain), I’m tempted to ask how a right-wing, pro-Israel owner will somehow be different than Canwest. And if “progressive anglos” don’t want their paper to fall in his hands, they’re more than welcome to submit a bid of their own.

There are other obstacles to Grafstein and Co.’s plan, even if they have the money. The biggest is that Canwest (and the banks arranging for the chain’s sale) want Canwest Publications sold as a unit. That centralized services include websites, customer service, advertising, page layout and Canwest News Service. Undoing that might be difficult and expensive (but it might also mean hiring more journalists, programmers and copy editors, which would clearly work in my favour).

And there might be other bids. The Globe is convinced Paul Godfrey is putting one together with his own financial backers. Other names being bandied about include Torstar, Quebecor, Transcontinenal, FP Newspapers and that guy Joe at the end of the bar.

| In the news, Media

Newspapers for sale!

CFCF's Paul Karwatsky reports outside the Gazette building (after signing autographs for some teenage girls who happened to pass by)

It wasn’t so much a question of whether, but when.

The hammer came down this morning, as Canwest Limited Partnership, the print and online side of the Canwest empire, joined the television arm in filing for creditor protection.

I can’t really tell you more than has been published by the Globe and Mail (UPDATE: The Globe has more in its Saturday issue), the Toronto Star, BBC, ABC (Associated Press), Bloomberg, Canadian Press, Agence France-Presse, Reuters, QMI, UPI, CBC, CTV, CTV Montreal, Le Devoir, Rue Frontenac, the Wall Street Journal, the New York Times, the Financial Post or the Canwest press release.

The Star also has a copy of CEO Leonard Asper’s memo to employees.

The gist of it is that the newspaper division (including the National Post, though it is not under this creditor protection filing) is up for sale, with the banks getting the ball rolling setting a floor bid. Unlike recent small-market TV station sales that were for a nominal amount, the newspaper chain is expected to fetch decent cash because most of the newspapers are still profitable.

The only question is who has a billion dollars to spare to scoop up an entire newspaper chain (because of how dependent they are on each other for content and services, Canwest is hoping to sell them off as a unit).

In the meantime, while about 50 former employees under salary continuance are getting screwed (none of these people are former Gazette employees), pensions, salaries and expenses continue as normal through a $25-million debtor-in-protection financing. This means employees (including me) still get paid as normal, freelancers still get their invoices processed, and suppliers still get paid for continuing operations. (UPDATE: Some freelancers are being affected by this filing, I’m now told, for bills between mid-December and the filing of Jan. 8.)

In Saturday’s paper, Gazette published Alan Allnutt makes that clear: Operations continue as normal.

Wish I had more juicy details, but they don’t trust me with that kind of information (would you?).

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