Newsroom cuts to facilitate foreign ownership?

Industry unions and guilds are gathering force to avert the perfect storm.

Takeover hearings, licence renewals, BDU reviews, decisions on the future of the Canadian Television Fund, and six new CRTC commissioners loom on the horizon.

The broadcasting climate is downright volatile, and union leaders don’t want to rock a leaky boat, so they choose their words carefully when speaking to reporters, but their agenda remains clear.

‘A certain amount of consolidation is inevitable, and broadcasters do need it to have the economies of scale and to compete and all that good stuff,’ says Monique Lafontaine, general counsel and director of regulatory affairs at the Directors Guild of Canada.

‘We say the horse is out of the barn. We are consolidated, we are concentrated,’ Lafontaine continues. ‘How do we work with what we have?’

At the CRTC’s Diversity of Voices hearing in September, the unions expressed big-picture concerns about having fewer and fewer broadcaster doors to knock on and a shrinking number of voices to tell Canadians what’s really going on.

Fifty CHUM newsgatherers were axed on the eve of the announcement of CTVglobemedia’s proposed purchase of the broadcaster, and 200 CanWest newsgatherers were more recently pink-slipped across the country under the banner of technological advancement. (CHUM’s Citytv stations were subsequently acquired by Rogers Media.)

According to the Canadian Media Guild and the Communications, Energy and Paperworkers Union of Canada, chopping newsgatherers creates ‘a crisis in local news’ and diminishes voices.

‘Technology is enabling them, for better or worse – I say for worse – to deliver the same newscast across the country,’ says Lise Lareau, president of the CMG. She says that the public will not get that story because of the consolidated landscape.

Peter Murdoch, CEP VP communications, calls it a step onto a slippery slope.

‘We see increasingly the abandonment of local reflection both in terms of local programming and local news, as a cost-saving measure to help pay for the cost of the consolidation,’ says Murdoch.

Both media spokespersons point to a triad of pressures that CanWest is under to slash costs. It has to please its shareholders. It has to service a hefty debt load. And it will have to turn a certain profit by 2011, when its Canadian broadcast assets are carved up with Goldman Sachs as a wrap-up of their joint purchase of Alliance Atlantis. It’s a triple whammy with long-term implications.

‘This isn’t going to be the [last] cut,’ warns Lareau. ‘They’re going to be looking at other ways to save money year after year after year because of the way the deal was structured.’

However, the CanWest takeover must first face the CRTC, which will decide whether the complicated deal defies Canadian broadcasting law.

CanWest’s toughest hurdle will be to convince the regulator that its minority equity interest in the deal does not give U.S. equity firm Goldman Sachs effective control.

The question will be whether American control can be engineered via a Canadian board of directors. The Broadcasting Act stipulates ownership is defined by financial control, not board membership.

Those looking for fireworks need look no further than Nov. 19, the day the CRTC starts hearings on the deal.

The unions will be intervening both individually and collectively under banners like the Coalition of Canadian Audio-Visual Unions and CUPE in Quebec. Some are planning to protest what Murdoch terms CanWest’s ‘abandonment’ of newsgathering in eastern Canada.

Ultimately, the unions see the proposed takeover as a precedent-setting dismantling of foreign control limits on Canadian broadcasters – something that CanWest has long called for.

‘Our greatest concern is that all of this is being orchestrated for foreign ownership,’ Murdoch says.

Lafontaine believes the bigger picture here is that the entire broadcasting industry is up for regulatory review within two years.

The major broadcast licences are up for renewal. A pay, specialty and BDU review is pending. The regulator’s decisions on the CTF review are due in December, and new media hearings are said to be in the wings.

This all happens when the CRTC itself is about to be transformed in the next eight months. Six of the seven full-time commissioners will leave (as their five-year terms expire), and new commissioners will be appointed by the federal government.

Murdoch worries that the current Conservative government is eager to ease foreign ownership restrictions.

Lafontaine is concerned that those appointed may not have ample experience at a time when the CRTC is facing some of the most significant decisions it will ever make.

‘There’ll be a whole new slate of people with quite possibly varying degrees of experience in the broadcast sector,’ says Lafontaine, ‘and they’ll have a very heavy workload ahead of them – serious decisions that will impact our broadcasting system for the next 10 years.’

Adding to the uncertainty is the CRTC’s tough-talking helmer, Konrad von Finckenstein – on the one hand a vocal fan of market forces, and on the other a defender of the cultural imperative.

ACTRA national executive director Stephen Waddell, a frequenter of superlatives, is uncharacteristically understated on this one. He calls these ‘interesting times,’ adding: ‘One hopes they are not going to turn out to be negative or dark times.’