Can a seventy-six-year-old news service make itself relevant to the newspapers of the nineties? Should it even try?
“If CP didn’t exist, we’d have to create it.” That’s the traditional view of fans of Canadian Press, Canada’s only national news-exchange cooperative. After 76 years in business, CP can certainly be called an institution in Canadian journalism. But in the newspaper world of the nineties, it’s threatening to become a misfit.
CP is a nonprofit agency with a membership of 100 daily newspapers in Canada. It generates original spot-news stories, features and analysis pieces for its member papers; edits and exchanges stories among papers; distributes copy from foreign news agencies; and also operates a radio and TV service called Broadcast News. The problem is that many newspapers, having been hit hard by the recession, are less willing to pay forCP’s full range of services. Some are revamping their editorial makeups to rely less on the kind of spot news that is CP’s traditional forte. And two of Canada’s large newspaper chains have started up their own internal news-exchange networks. All of which leaves Canadian Press struggling to find a strong footing in the contemporary Canadian news business.
“We are really coming to a crossroads, and I am not optimistic about what will happen,” says Michael Bernard, unit branch director of the Canadian Wire Service Guild. “The worst scenario is that we will be reduced to a rewrite service. We could be an organization half our size.” Last year, in fact, 22 positions were eliminated at CP and BN through attrition-just the second set of permanent layoffs in the company’s history.
What fuels Bernard’s concern right now is a review that CP is conducting of its own services. Last September its board set up something called the Fundamental Committee, which aims to study and assess what newspapers want from CP. The committee, with representati ves from the Southam, Thomson and Sun chains and several independents, expects to report this summer. CP president Keith Kincaid hopes its influence will be felt in the 1994 budget, to be set this September. If Kincaid is nervous about the process, his words don’t betray him. “When the committee meets, they all cross their hearts and point to heaven that they’re going to maintain CP,” he says.
This optimism is shared by Hunter George, vice president and director of editorial development for the Thomson newspapers, who says Bernard’s worst-case scenario won’t be realized. “This is not an exercise in cutting bodies,” he says. “The purpose of the committee is to put the horse back in front of the cart.” What he means is that the committee must work with CP to determine what services it can best provide and what it might abandon. For his part, George says: “There’s one thing that CP can do better than everybody else, and that’s distribute spot news across the country at the drop of a hat.”
With newspapers such as The Globe and Mail taking a decided step away from spot news in favour of analysis, will CP’s focus catapult it toward obsolescence? Peter Desbarats, dean of journalism at the University of Western Ontario, has mixed views on that critical question. “Canadian Press still provides a certain amount of background and political copy and I think major organizations like Southam and the CBC really regard that coverage as superfluous,” he says. “But major organizations are still concerned about missing that big story from that out-ofthe-way spot. The fact that Canadian Press still exists means that newspapers still need something like it.” On this point Kincaid argues: “There may be a greater trend towards features and analysis but at the same time papers want to cover hard news that they can’t ignore.”
Some newspapers, however, have come to the view that they’d rather risk missing the occasional big story than pay CP an annual fee for the right to publish material that largely doesn’t serve their interests. Sterling Newspapers, the British Columbia-based Hollinger subsidiary, dropped its annual $500,000 commitment to CP services for its eight newspapers three years ago, opting instead to focus more on local news coverage and use other news agencies such as the Los Angeles Times/Washington Post and Reuters for foreign coverage. The Nelson Daily News was one of the Sterling papers to shift emphasis to local news. Vern Shaull, the publisher, says the move met with little reader resistance. “Our readers don’t care a whole lot about national and international stories except for the first paragraph and the headline,” he says. Kincaid counters that other papers may differ. “What satisfies one paper is not necessarily what the other ones want. It’s a mixed bag.”
Even so, given the way CP’s fees are structured, Sterling Newspapers is not alone in questioning whether CP is offering fair value to all its members. CP, which drew $22 million of its $52 million budget from basic member fees in 1992, charges its member papers an amount based on each newspaper’s circulation for the right to publish all CP copy available to it during a given year. Fees don’t increase in direct proportion to circulation increases, but on a complex sliding scale that grants larger-circulation papers a kind of volume discount. Put simply, the larger a paper’s total circulation, the less it pays in terms of its cost per thousand of circulation. This has led Thomson Newspapers, which owns many more small papers than Southam does, to complain of bias in the system. Thomson’s Hunter George says his chain comprises only 21 per cent of CP membership but pays 27 per cent of the fees a situation he wants rectified.
Canadian Press can’t afford to ignore such concerns these days because it no longer enjoys monopoly power in the news-exchange business. Many of the larger papers that make up the CP cooperative belong to the Southam chain, which established its own satellite exchange network in 1990. In December 1991, Canada’s largest daily, The Toronto Star, joined the network to exchange major domestic and international stories. Though the Southam network lacks CP’s access to smaller population centres where spot news is often made, it can generate its own analysis, business and feature stories. So it’s no wonder that Southam, which paid about $8 million in CP fees in 1992, would rather see a more bare-bones CP.
Meanwhile, Thomson Newspapers, which owns 40 dailies across Canada, mostly small, has also started up its own internal network, which aims to produce 7,500 Canadian stories, features and columns in 1993. Although Thomson uses CP for only about 20 per cent of its stories, it would still hate to lose the service in its current form. With so many major chains disputing CP’s best role, is an economically sound compromise possible? Kincaid thinks so. “The cooperative has had to compromise since 1917 and we’ll be looking at compromises forever.”
Forever is a long time, according to Chris Cobb, an Ottawa Citizen media writer who’s studied and written about CP’s role in newsgathering. He figures that the Southam network poses a real threat. “If you take the Southam network the way it stands today it’s easy to fantasize about what it could become-a competitive service to Canadian Press. The technology exists, and the will outside Southam exists.”
Southam has wooed such independent papers as The London Free Press into joining its network, which includes seven domestic bureaus and the largest stable of foreign correspondents of any Canadian news organization. CP, by contrast, is reducing its foreign coverage, having closed its New York bureau in 1990 and its Moscow bureau last January. “One of the major problems with Canadian Press is that it never did develop its eye on the world,” says Peter Desbarats. “Because of CP’s heavy reliance on The Associated Press for international coverage, and because some of CP’s major clients such as The Toronto Star, the Globe and the CBC have their own correspondents, members don’t want that duplication.”
Unit branch director Bernard adds that the growth of the Southam network and advances in telecommunications technologies mean that “suddenly we have people contemplating doing what we’ve been doing for 75 years for a hell of a lot less.” However, Russ Mills, former president of the Southam Newspaper Group and now publisher of The Ottawa Citizen, says Southam would not relinquish its commitment to CP. “We have enough unity problems in this country as it is,” Mills says. “Communication is probably the main thing that ties this country together. There are only two things that go all across Canada and that’s CP and the CBC, and at this time in our country’s history we will continue to need both.”
Mills does concede that CP’s role will change as the Southam network evolves. As money gets tighter at member papers, they’ll want an outside service that allows them to target their spending more precisely. “I guess where it’s heading is CP becoming more of a cafeteria-style service where people will choose what they want.”
In fact, CP has already made a move in that direction. Last September, its board decided to split CP’s service into two tiers: the first provides hard news and news features; the second adds an optional package of staff-written soft news and analysis. Members who take only the first tier receive a small discount on their fee assessment. Kincaid says members are 70 per cent committed to the optional packages, which went into effect in January on a one-year trial basis. And he doesn’t expect the new system to decrease revenues significantly. In the big picture, whether or not Southam should compete head-to-head with CP depends on whether the question is considered in economic or journalistic terms. Taking the economic view, Hunter George says Southam will never try to rival CP because there’s no room for two general news services in the Canadian market. “This is an age when General Motors is eliminating duplication and IBM is reshaping itself. You’ve got organizations everywhere finding ways not to duplicate themselves, not to reinvent the wheel. Why would you want to duplicate a service that can be provided more efficiently by a cooperative?”
In journalistic terms, Tim Creery says there’s plenty of room for two general services. He directed research for the Kent Royal Commission on Newspapers in the early eighties, and concluded that ownership in the news industry should be much more diversified. He’s yet to change his mind. “I still think it’s troubling that there is only one news agency,” he says. “I think Southam is a welcome alternative. At least it provides a different account of things from different reporters who belong to a different outfit.”
Do Southam and Thomson secretly have plans to build up their own services and allow Canadian Press to go out of business? If they do, you won’t hear it from them. Executives at the two chains are not being poker-faced about CP’s future, insists Mills; it’s just that they don’t know what to predict. He says that CP’s future is tied closely to how well the newspaper industry recovers from the recession. “If newspapers come out of the recession and get some of the strength that we had before, then we’ll be able to afford a lot of things, including cr. If we don’t, we’ll have to make some tough decisions.”
Meanwhile, CP is showing signs of coming unglued. Last year’s layoffs followed some bad financial news. In September of 1991, GP’s board of directors, made up of 18 publishers, elected to freeze rates for CP and BN members for the first time in four decades, translating into a loss of $882,000 in anticipated revenues for 1992. CP also lost another $233,000 in fees in the same year because of declines in circulation of member papers. The budget for 1993 again froze fees, resulting in a projected loss of $400,000, an amount which drastically affects CP’s editotial spending. For all such news, Kincaid says that many people overlook one possible outcome of the Fundamental Committee’s review of CP’s activities: “They could decide to maintain the status quo. That’s a very real possibility.”
The prestige and history that CP has built up since the Russian Revolution in 1917 may not carry it safely through the lean and mean age of journalism in the last decade of the twentieth century. Status quo or not, CP faces tough times and plenty of scrutiny.
As Peter Desbarats points out, the cooperative can’t enjoy the luxuties of a monopoly anymore. “Papers are getting down to negative practical arguments about CP. They don’t ask ‘What can it give us?’ but ‘What will we miss without it?'”