Business

Down to the wire

Southam threatens to quit the national news agency

D’ARCY JENISH July 8 1996
Business

Down to the wire

Southam threatens to quit the national news agency

D’ARCY JENISH July 8 1996

Down to the wire

Business

Southam threatens to quit the national news agency

Three years after his retirement, Peter Buckley reflects fondly on a long and rewarding career with The Canadian Press, the country’s national news-gathering agency. In more than four decades as a CP reporter and editor, Buckley, 62, covered major stories across Canada and from more than two dozen other countries. CP, he says, is “one of the great unsung resources of this country, an essential service for keeping Canadians informed about what’s going on in Canada and around the world.” But the days when the wire service routinely covered everything from foreign wars to provincial legislatures appear to be numbered. Last week, Toronto-based Southam Inc., the country’s largest newspaper chain, threatened to pull out of CP on Dec. 31, a move that would save Southam $7.2 million a year in membership fees but would severely wound, and perhaps kill, the 79-year-old agency. “CP is in a definite state of crisis,” David Jolley, the news service’s president, said following the Southam decision. “Right now, it’s life or death.”

The prospect of CP’s demise is the latest sign of upheaval in a season of turmoil for the Canadian newspaper industry. In the past

12 months, while other major players have been reducing their holdings, Montreal-born press baron Conrad Black has increased his portfolio of Canadian dailies to 58 from 12, representing 42 per cent of the country’s daily circulation. His most stunning move was his decision in May to acquire control of Southam, which publishes the Montreal Gazette, The Ottawa Citizen, The Vancouver Sun and 17 other dailies. Already he has declared his intention to streamline management and cut expenses. But as criticism mounted last week of Southam’s threat to leave CP—Prime Minister Jean Chrétien even expressed his concern while attending the G-7 summit in France—Black insisted that he has no desire to bury the wire service. “We want Canadian Press to survive,” he said from his office at The Daily Telegraph in London, the flagship of a growing international publishing empire.

That said, Black left no doubt of his desire to see major changes at CP, which is owned jointly by the 88 dailies that subscribe to its services. ‘We certainly share a great deal of the concerns of Southam management about Canadian Press and about how to get more service for less money,” he said, “but we want it done in a way that preserves Canadian Press in some sort of reformed version.” While Black sounded diplomatic, his chief lieutenant, Hollinger Inc. president David Radler, delivered a much blunter message. “CP management has got a six-month sentence,” he said of the agency, which employs 360 people full time and has an annual budget of $46 million. “They better come up with a solution.”

I WHO PAYS FOR CP!

From Radler’s perspective, far too much of CP’s coverage duplius cates material already generated by Hollinger and Southam dailies " and Southam’s own news service. CP, for example, maintains a 38-member parliamentary bureau while Southam News has 20 peoi pie in its Ottawa office. The Citizen, The Gazette and several other I Southam dailies also have correspondents on Parliament Hill. I Moreover, CP distributes more material—about 350 stories a day— ^ than its client newspapers need. “How many stories can the Prince Rupert Daily News use?” Radler asks rhetorically. “The smaller papers don’t require the volume of news coming through the CP wire.”

The Hollinger president insists that he is not trying to dictate the future of Canada’s only national, bilingual wire service. He says Hollinger and Southam will allow 1996 contributions toThe CP management to develop a Canadian Press, in millions restructuring plan and will

then decide, before the end of the year, whether it meets their needs. Gordon Fisher, Southam’s vice-president for editorial, adds that CP has already drafted a proposal that would cut the chain’s costs for 1997 almost in half, to

about $4 million. “I can see that a relationship can continue,” he said. “The notion that Southam is out to kill CP is ludicrous.”

Meantime, Southam plans to expand its own news service—subject to Black’s approval—in order to reduce its dependence on CP copy. Besides its Ottawa bureau, Southam News has five foreign correspondents, one each in London, Washington, Moscow, Hong Kong and Cairo. The agency also has reporters in Vancouver, Toronto and Montreal. Kirk LaPointe, the service’s editor, says that Southam intends to reactivate a Halifax bureau, add columnists in Toronto and Ottawa and hire a roving Ontario correspondent. The company also plans to increase the sharing of news and feature material among newspapers within the chain.

That planned expansion, coupled with Southam’s six-month ulti-

matum to CP, has created enormous uncertainty for wire service employees across the country. “As you can imagine, people are very worried,” said CP’s Halifax bureau chief, Dean Beeby. “They have families, mortgages and commitments, and they wonder whether they are going to have jobs on Jan. 1, 1997.” The result, says Gerry Arnold, CP’s Ottawa bureau chief, is widespread anxiety—and anger. “People are very frustrated,” he said. “Only one thing is certain. The status quo is off the table.”

Ultimately, newspaper subscribers could be among the biggest losers in the drive for savings and efficiency. Eliminating or dramatically downsizing CP could seriously impede the flow of news from one part of the country to another. Beeby, for one, notes that Southam does not own a newspaper in Atlantic Canada and will be attempting to cover the region with one correspondent. CP, by contrast, employs nine print journalists in the region. “You have four provinces that are essentially a blank on the Southam map,” he said. “It’s not clear to anyone here how they are going to fill it.” (One option—already hinted at by Black—would be to combine the resources of Southam and Hollinger, which owns seven papers in Atlantic Canada.)

The pressure on CP to cut spending may also affect the timeliness of material that appears in Canadian newspapers. CP staffers worry that, in future, they will no longer be filing original stories to meet the deadlines of newspapers in six different time zones. Instead, their role could be reduced to processing stories sent in by member newspapers. And experience has shown that newspapers rarely submit stories to CP in time to meet the requirements of papers elsewhere in the country. “People want to know about the news when it happens,” said Arnold, “not when someone gets around to writing a story at 7 o’clock at night. For speed and accuracy, I don’t think anyone in the country can compare to us.” Newspaper executives outside Black’s empire were also reeling at the prospect of having to cover national and international news

without a steady flow of CP copy. “What CP provides us, most fundamentally, is eyes and ears across the country that are alert for 20 hours a day in about seven or eight different cities,” said Colin MacKenzie, managing editor of The Globe and Mail in Toronto. “That’s going to be very hard to replace.” Others went further. “I don’t know what we would do without the news service,” said Michael Bembridge, publisher of the Moncton TimesTranscript. ‘We can’t survive « as a newspaper without nasi tional and international news. I Our readers demand it.”

I CP veterans such as BuckI ley, who was general news editor at the time of his retirement in 1993, note that the organization has been through periods of growth and contraction in the past. Historically, its fortunes have been tied to the profits of member newspapers. But Black’s emergence as the kingpin of Canada’s print media— and the newspaper owner most capable of surviving without a national wire service—may have changed the equation forever. ‘We’re at Southam’s mercy,” says Bembridge. “They can almost dictate what the service is going to be.” In Bembridge’s view, Southam’s new controlling shareholder is prepared to kill CP if he fails to get the results he wants. “It sounds like CPs obituary is being written,” he adds. “Conrad Black and company will determine whether it gets published.”

D’ARCY JENISH