Will political backlash over Bell Media cuts spark a policy pivot?
Media | Mitch Diamantopoulos
“For the day when some conjunction of circumstances creates a will for change; that day belongs to those who have practical ideas ready.” —Tom Kent, Chair of the Royal Commission on Newspapers
The largest mass layoffs in three decades at Bell Canada Enterprises Inc. (BCE) last week set the conglomerate on a collision course with Ottawa. Along with sparking coffee row debates over taxpayer support for the company, the layoffs and cancelled CTV news programs should also prompt a wider conversation about targeting media reforms to better arrest journalism’s decline.
The firestorm started Thursday, Feb. 8, when CTV’s parent company abruptly ended noon hour newscasts on all CTV stations outside Toronto. Also cut were weekend news programs at six and 11 p.m. on all CTV and CTV2 stations outside Ottawa, Toronto and Montreal. The multi-media, entertainment, sports, and telecommunications giant also cancelled CTV’s investigative reporting program W5 after a 58-year run and plans to sell off 45 of its 106 regional radio stations.
Following another round of layoffs in June, when BCE eliminated six per cent of jobs and either closed or sold nine radio stations, last week’s cuts will push another 4,800 — or nine per cent of BCE employees — out of work.
BCE’s cuts prompted a swift backlash. The company, after all, posted a $2.3 billion profit at the end of last year and its dividend payments trended steadily upward over the last decade.
“This is absolutely devastating news for thousands of workers and their families,” said Unifor National President Lana Payne. “Adding insult to injury, the company is conducting this mass layoff while increasing dividends to shareholders and buying back shares.”
The company blamed Ottawa and the Canadian Radio-television and Telecommunications Commission, citing slow progress in updating the Broadcast Act (Bill C-11) and introducing The Online News Act (Bill C-18).
Payne dismissed this rationale “as a smokescreen to justify the company’s actions”. Bill C-11 became law in April. Bill C-18 followed in June.
Even politicians overcame their usual reluctance to antagonize the media barons who shape their public image and electoral prospects. Federal Heritage Minister Pascale St-Onge scolded BCE — which, St. Onge said, will save $40 million per year in annual licensing fee relief from Canadians — for its duplicity.
BC Premier David Eby went further. Accusing the conglomerate of bleeding newsrooms dry to maximize shareholder profits, he compared BCE to “corporate vampires”. “Shame on you,” he said.
Not to be outdone, Justin Trudeau departed from prime ministerial decorum by declaring himself to be “pissed off” and “furious” about the “garbage decision”.
Doing Business With Scorpions
There is no doubt the BCE cuts are very bad news, and not just for the families who lost a breadwinner last week. The reduced frequency of CTV newscasts and the cancellation of the network’s flagship investigative reporting program W-5 will only further impoverish citizens’ knowledge about public affairs at a time when journalism’s decline is already alarming.
Yet what’s most surprising is that anyone was surprised.
The public betrayal imputed to BCE reminds of the fable of the scorpion and the frog. It goes something like this: unable to swim, a scorpion asks a frog to carry it across a river. The frog is wary of being stung but the scorpion points out they would both drown if it did. The frog is persuaded but halfway across the scorpion stings the frog anyhow. This seals their fates. When the frog asks the scorpion why, it replies ‘It’s in my nature’.
For the public to be surprised at being stung by a scorpion, after carrying it through a turbulent economic period, is to miss the point that it is a scorpion.
The BCE board of directors and its shareholders are not likely to be persuaded by high-minded moral appeals to spare workers’ livelihoods, protect community cohesion or defend the country’s democratic vitality when there’s money to be made. No one has less incentive to see the error in his ways than BCE’s CEO Mirko Bibic, who pocketed over $13.5 million in compensation in 2022.
Bibic’s annual haul could pay 250 rookie journalists a $54,000 annual salary.
Not since the Royal Commission on Newspapers in 1980 have the nation’s political class so dramatically crossed swords with media owners in public. That Commission was launched after the abrupt closure of dailies in Ottawa and Winnipeg reduced both cities to one-paper towns. Chaired by Tom Kent, he concluded then that media concentration had already reached “monstrous” levels. It was “clearly and directly contrary to the public interest.”
In the wake of the Kent Commission’s defeat, deregulation prevailed. An orgy of debt-leveraged mergers and acquisitions increased media concentration, and downsizing newsrooms became a ‘best practice’ for a new breed of vulture capitalists, corporate takeover specialists, and hardball managers.
Pioneering The Art of Newsroom Vandalism
Vindicating Kent’s warning that trends would reach the “monopolistic extreme” if left unchecked, Conrad Black’s Hollinger Inc. was allowed to buy all five Saskatchewan dailies on Dec. 19, 1995.
Faced with no competition, what happened next was predictable.
On Black Saturday, March 2, 1996, Leader-Post staff were summoned to an information session. 89 were fired that day, about a quarter of the workforce. That included 17 pink slips in the newsroom.
A similar fate met their StarPhoenix colleagues in Saskatoon.
Asset-stripping was the new formula for modernizing Canadian media: cut staff, and the range and quality of reporting, to boost profits.
When asked how Sterling newspapers, Hollinger’s Canadian division, made acquisition decisions, Hollinger president and CEO David Radler put it bluntly: “we’d visit the offices of each prospective property at night and count the desks. That would tell us how many people worked there. From our experience at Sherbrooke, we realized that if a place had, say, 42 desks, we’d only need 30. We knew a dozen people would be leaving the payroll even though we hadn’t seen their faces yet.”
Clearly, North Americans’ reliance on investor-owned media has not stemmed journalism’s decline. Instead, the unfettered pursuit of shareholder returns has encouraged a cost-cutting race to the bottom as hedge funds and venture capitalists buy media properties at deep discounts, slash staff to squeeze out higher profit margins, and then discard them when more profitable investment opportunities beckon. There’s a reason it’s become cliché to declare that business model broken.
While Ottawa has made important first steps to stabilize news outlets and protect journalist jobs, it also learned last week that offering incentives to scorpions won’t change their nature. Monetizing journalism’s crisis through shrewd lobbying, some have clearly used the leverage of public concern to boost dividends rather than expand news coverage. The latest round of Bell layoffs just serves as a particularly scandalous reminder of what can happen to the interests of the democratic many when too much media power rests with the wealthy few.
Clearly, more imaginative reforms are necessary. Preferably, those reforms don’t hinge exclusively on the goodwill of scorpions.
News Deserts Ahead?
Without significantly different public policy interventions, Canadian journalism is likely to follow U.S. trends. A 2022 study by the Medill School at Northwestern University found that about 2,500 U.S. dailies and weeklies have closed since 2005, reducing an increasing number of regions to news deserts.
If Conrad Black is the ghost of free-market journalism past, and BCE’s CEO Mirko Bibic is the ghost of free-market journalism present, then the faceless hedge-fund managers transforming vast swaths of the U.S. into local news deserts are the ghosts of free-market journalism’s future. As a study led by April Lindgren at Toronto Metropolitan University’s School of Journalism found, 29 Canadian community newspapers and seven radio stations closed in 2023 alone.
It might be unthinkable to imagine Regina (pop. 250 k) without a daily newspaper, just as it was unthinkable to our neighbours in Moose Jaw (pop. 34k) when the Times Herald folded in 2017 or Kamloops This Week (pop. 100k) folded in October. But it was also unthinkable in 1929 that Saskatchewan’s capital would one day have only one daily. It was equally unthinkable that the Leader Post’s Monday print edition would be phased out, or that the newsroom would one day be permanently closed with the entire staff working remotely. The elimination of CTV newscasts at noon and on weekends was also unthinkable until last week. In the salvage yard that is the news industry, we’re learning not to take anything for granted. But these are not easy lessons.
While both Canadian news production and media policymaking are in a state of chaotic flux, at least one thing should now be clear after last week: too much media power in this country has been allowed to concentrate in too few hands for far too long, and without democratic accountability. Abuse of monopoly media power should therefore anger but not astound us.
Building Journalism Back Better?
BCE’s broken promises aren’t likely to make the defence of journalism a ballot-box issue in the next federal election. The company appears to be banking on being further rewarded by tax cuts and other concessions from the public purse if the Conservatives form the next federal government — as polls presently suggest they will.
However, the potential for BCE’s hubris to backfire is considerable. Forget the tarnished brand, Ottawa’s reluctance to extend further assistance, and the audience share they risk losing as Canadians are inconvenienced or disaffected by the cuts. Ironically, and despite waging a decades-long campaign to erode Canadians’ support for public broadcasting, BCE has now also made a more persuasive case for robustly reinvesting in CBC/Radio Canada than its staunchest advocates.
Clearly something needs to be done to backfill for the faltering private system. Expanding public broadcasting’s news scope is the fastest, fit-for-purpose way for Ottawa to do that. Clearly BCE won’t let CTV do it.
But Ottawa should not stop by reversing recently announced cuts and rebuilding CBC/Radio Canada. That nationwide bulwark against news commercialization and eroding trust in journalism from the top-down needs to be complemented by support to community-driven initiatives that resist commercialization and rebuild trust from the bottom-up.
Once stung by venomous and unpredictable scorpions, Canadians should now turn toward smaller, but more helpful, frogs.
A Different Media is Possible
Although their modest, local efforts don’t grab headlines, some Canadian communities are taking effective direct action to salvage their local news outlets and stem the spread of information poverty and news deserts.
For example, Victoria’s CHEK TV was slated for closure when CanWest failed to attract a buyer in 2009. That would have left Victoria with only one TV station. A worker-led buyout saved that operation, which continues to operate independently.
Worker-led rescues also saved a group of six regional dailies in Québec in the wake of their parent company’s bankruptcy in 2019. With 450 Groupe Capitales Médias jobs on the line, the staff at Le Soleil, La Voix de l’Est, Le Quotidien, Le Nouvelliste, La Tribune, and Le Droit each formed multi-stakeholder co-operatives — including readers and supporting organizational members — to save their jobs and local news service. They also set up a 2nd-tier co-operative to deliver human resource, business planning, and technology support to the six member co-ops. This Coopérative nationale de l’information indépendante (CN2i) consortium raised $2.5 million in memberships from the six communities. Another $21 million was invested by the Province and funds managed by two provincial trade union federations, the Desjardins credit union system, and the provincial social economy movement.
While Covid struck shortly after the co-op conversion and forced CN2i to pivot to digital-first publication (with print editions on Saturday only) and lay off 100 staff, this model intervention nevertheless saved the remaining 350 jobs.
Compared to a $40 million annual gift in licencing relief to BCE for which the public was repaid with drastic reductions in news service, the CN2i story provides a dramatic example of what’s possible when concerted technical and financial assistance gives media workers and communities the tools they need to resist encroaching news deserts. For example, Canadian taxpayer’s annual gift to BCE could pay the salaries of an additional 740 newsroom rookies.
Ottawa can also foster this kind of community-based media innovation by legislating the right to stage worker buy-outs or co-operative conversions in the case of newsroom closure threats.
New Ownership Models
An emerging global sector of news co-operatives illustrates the potential for innovative media ownership models. For instance, Prairie Dog and Planet S aren’t the only media outlets owned by their workers. In fact, worker co-operatives publish the second most-read weeklies in France and Uruguay. Co-operatives also publish significant daily newspapers in Rome (il manifesto, est. 1969), Berlin (Die Tageszeitung, est. 1978), Mexico (La Jornada, est. 1984), Montevideo (La Diaria, est. 2006) and Athens (Efimerida ton Syntakton, est. 2012). With the demonstrated ability to scale-up, and to draw support from community, trade union and co-operative movements, these examples also illustrate that a different media is possible.
In the U.S., an outsized philanthropic establishment has helped drive about 425 non-profit news outlets now in operation. Unfortunately, only about a dozen registered journalism organizations in Canada can issue charitable tax receipts for donations. Nevertheless, the YMCA of Greater Toronto, Toronto Foundation, and United Way of Greater Toronto all stepped up to support non-profit online publication The Local. Given that Toronto is arguably the country’s most over-serviced news market, there’s clearly a role for community foundations to play in giving communities the tools they need to expand the non-profit and co-operative media sectors in the rest of the country.
By earmarking a percentage of their annual advertising budgets for community-based media, provincial and municipal governments and community-based organizations can also help keep those funds circulating locally, creating jobs, and protecting sustainable local journalism.
Presently neglected, under-resourced and under-developed, this emerging community sector harnesses the interests of reporters and their communities to fill gaps that investors will not and the state should not. Community media can expand viewpoint diversity, and create opportunities to train and employ the next generation of talent for an evolving media environment.
Since all ownership models have their limitations and strengths, a strong media system should be defined by a structural pluralism that includes news co-operatives and non-profits. Success elsewhere demonstrates that this third media sector can be scaled-up to backfill for commercial journalism’s decline. Canada’s emerging independent sector has even recently boot-strapped a lobby to advance that work, Press Forward.
They, of course, face an uphill battle. For a very long time, lobbyists for the too-big-to-fail media have had Ottawa’s ear. The corporate media sector makes big promises for systemic fixes that are simpler and faster than developing the community-based media sector. However, Canadians have repeatedly discovered the hard way that quick fixes may prove illusory.
Last week we were reminded that, when public and private interests diverge, it’s the public that often gets short-changed. Like BCE, investor-owned media will be routinely motivated by market logic to take Ottawa’s tax breaks and subsidies today, lay reporters off tomorrow, and pay out handsome shareholder dividends the day after.
That’s why it’s important to ask what media development potential may lie dormant in Canadian communities’ non-profit and co-operative sectors as we tackle the democratic reconstruction of journalism. Of course, this country’s community media sector is relatively small, isolated, and late blooming. These social enterprises must navigate rapid technological change and turbulent markets. There will be wins and losses.
But it’s worth asking the $40 million question: would our annual gift in licensing fee relief to BCE be better used by independent, community-based media — who we can trust to invest those funds in local jobs and strengthening local news production? ◆