Convergence
JOUR 350
The News and Media Business

Week 9

Cross-media ownership
•	Trudeau government placed restrictions on cross-media ownership in 1982
•	After concerns expressed by Kent Commission
•	OIC revoked by Mulroney government in 1985
•	Canada world leader in concentration of press ownership during 1980s, ’90s

Convergence hits U.S. media
•	AOL-Time Warner merger Jan. 2000
•	Internet start-up America Online
•	swallowed media giant formed in 1990
•	largest corporate merger in history
•	worth US$160 billion
•	magazine, book publishing
•	cable TV (CNN, TNT, HBO, WB)
•	film studios, music labels
•	signaled wave of media convergence

Convergence comes to Canada
•	Feb. 2000 Bell Canada Enterprises (BCE) takes over CTV for $2.3 billion 
•	partners with Globe and Mail in Sept.
•	as Bell Globemedia 
•	July 2000 CanWest Global buys Southam newspapers 
•	13 metro dailies and 130 smaller titles
•	from Hollinger Inc. for $3.5 billion
•	estimated $100 million in savings/year
•	by combining newsgathering operations 

The biggest deal of all
•	Quebecor largest newspaper publisher in Quebec
•	took over Toronto Sun chain 
•	15 metro dailies and more than 100 community newspapers 
•	outbid Rogers for Groupe Videotron 
•	Quebec cable giant included TVA, province’s largest television network
•	deal worth $5.4 billion

Largest media firms in Canada
					    Revenue (millions)
						2003        2002
Bell Globemedia		2,734	2,176
CanWest Global		1,897	1,821
Quebecor				1,217	1,173
Torstar  				  894   	  832
Rogers  				  845   	  785

Convergence concerns
•	CRTC approved BCE-CTV deal pending hearings
•	shares placed in trust
•	hearings pending when Globe and Mail deal announced
•	but Thomson took only 29.9 percent of new Bell Globemedia
•	thus did not require prior CRTC approval

Public Benefits
•	CRTC had since late 1980s required a fund=10% of media takeovers 
•	be set aside for worthy initiatives
•	usually programming
•	BCE-CTV deal approved after $230-million package proposed
•	including $2.5 million endowed chair in convergence at Ryerson 
•	and $3.5 million for Canadian Media Research Consortium (CMRC)

CRTC licence renewal hearings
•	CTV, Global licenses up April 2001
•	applied for renewal for 8 more years
•	convergence becomes a hot topic
•	CRTC calls for “code of conduct”
•	consumer groups call for “firewall”
•	between newspaper, TV newsgathering
•	similar to what Quebecor had proposed
•	for approval of TVA takeover

National networks refuse code
•	CanWest, CTV call witnesses to testify to benefits of convergence
•	including academics from York, UBC
•	Fred Fletcher, York: “potential for greater journalistic competition”
•	Donna Logan of UBC went further
•	networks threaten legal challenge if code of separation imposed
•	licenses renewed without code

Continued convergence concern
•	International Federation of Journalists expresses concern over CRTC ruling
•	CTV president Trina McQueen promises “bigger pot of information”
•	more international coverage, investigative reporting 
•	due to the combined newsgathering resources 

CanWest campaign against CBC
•	Owner Izzy Asper wrote newspaper column in February 2002
•	called CBC a “waste of public funds”
•	and a “huge bureaucracy” of “overpaid, underworked executives” 
•	criticism of the CBC became a regular feature of CanWest newspapers
•	including charges of pro-Palestinian bias 

Opposition calls for inquiry
•	David Asper column criticizing media coverage of Shawinigate
•	published just before CRTC hearings
•	opposition parties unite in demand for media inquiry by Parliament
•	Copps had already struck Lincoln committee to study broadcasting
•	added media ownership to mandate 

Lincoln committee
•	Headed by Montreal MP Clifford Lincoln
•	“Ours is not a race against convergence. We’re going to lose that race. . . . We’ve got to find out what the impact is”
•	Televised hearings held across country in spring of 2002 
•	report issued mid-June 2003 

Our Cultural Sovereignty 
•	872-page report subtitled The Second Century Of Canadian Broadcasting 
•	called “the most comprehensive review of Canadian broadcasting in 20 years” 
•	made 97 recommendations, including: 
•	moratorium on new broadcast licenses
•	for companies that also own newspapers pending a government review of the issue 
•	Continue restrictions on foreign ownership 
•	Increased funding for CBC

The “Black News Hole” 
•	critics noted report coverage sparse
•	Toronto Star columnist Antonia Zerbisias: it “virtually fell into a black news hole” 
•	Playback magazine called it the “under-reported” report 
•	Vancouver Sun ran story as a 71-word “business brief” 
•	headlined “More cash for CBC recommended” 

The American Parallel
•	Federal Communications Commission
•	headed by Michael Powell
•	began hearings in late 2002 
•	on rule changes to media ownership
•	including lifting 1975 ban on cross-media ownership in local markets 
•	hearings, debate hardly covered
•	Pew survey found 72% of Americans had heard “nothing at all” about it

News Blackout  
•	American Journalism Review did content analysis of coverage 
•	found most newspapers and stations they owned barely mentioned the issue 
•	bi-partisan coalition formed at grassroots level to oppose the change
•	organized through the Internet
•	failed to prevent them
•	but legal challenge succeeded