News Analysis

Media 'Convergence' Underscores the Need for the Working Class to Build Its Own Press

In what has been described as the biggest media deal in Canadian history, CanWest Global Communications Corp. announced July 31 that it was buying almost all of Hollinger Inc.'s Canadian assets for $3.5 billion. Included in the purchase price is 50 percent of The National Post, ownership of 13 major English language daily newspapers, 136 daily and weekly newspapers and shoppers in smaller communities, 85 trade publications and directories in the Southam Magazine and Information Group, and all of the Hollinger and Southam Internet properties. The major dailies acquired by CanWest under the deal are: The Halifax Daily News, The Regina Leader Post, The Telegram, (St. John's), The Star Phoenix, (Saskatoon), The Guardian, (Charlottetown), The Calgary Herald, The Montreal Gazette, The Edmonton Journal, The Ottawa Citizen, The Vancouver Sun, The Windsor Star, The Province, (Vancouver) and The Times Colonist, (Victoria).

CanWest will pay cash of $2.2 billion and approximately $600 million in the form of 24.3 million Non-Voting Shares valued at $25 per share and 2.7million Multiple Voting Preferred Shares at a premium of $3.75 over the price of non-voting shares. As well, the vendors will take back a 10-year subordinated debenture in the amount of $700 million. Financing for the transaction was underwritten by a consortium co-led by the Canadian Imperial Bank of Commerce and the Bank of Nova Scotia.

The transaction will see Hollinger acquire a 15 percent share and just under a 6 percent voting interest in CanWest. Two Hollinger executives, including Conrad Black, will join the expanded 11 person CanWest Board. The transaction is subject to regulatory approval, including by the Canadian Competition Bureau, to which application for approval has already been made. As well, during their next license renewals, CanWest's Canadian television broadcasting properties "will seek to reassure the Canadian Radio-television and Telecommunications Commission (CRTC) that this transaction will, in no way, diminish the diversity of Canadian voices, choices and editorial opinion in the interpretation of Canadian and international news and information to Canadians."

According to CanWest Chairman Israel Asper, "The merger is a giant step forward in securing a bright future for a vibrant and independent Canadian media sector. It's also a great day for Canadian journalists, who will have more opportunities than ever before to tell Canadian stories to Canadians across the country."

CanWest owns, operates and/or holds substantial interests in conventional television, specialty cable channels and radio in Canada, New Zealand, Australia, Ireland, and the United Kingdom. The Company's program production and distribution division and interactive media division operate in several countries throughout the world. CanWest is trumpeting the benefit of this deal for its shareholders, and CanWest stock, which had been holding steady in recent months, jumped almost 20 percent following the announcement. So it is clear who wins with this deal.

It is also clear that now, more than ever, the working class needs to build its own press. It is not possible that the media barons, whose sole aim is maximum profit, will address the questions the working class is grappling with. For that we must build our own press in defense of our own interests.