Editors hunched over their desks throughout The Canadian Press newsroom in downtown Toronto command an army of reporters and strategize with bureaus across the country. All around, flashes and blasts of light and noise radiate from televisions tuned to CBC, CNN and Sportsnet. The sounds of snapping computer keys and shrieking phones clutter the air. Yet, in the office at the back of the room, all is quiet. The TV is on mute. A telephone and a BlackBerry sit silently on the desk. Beside them stands a series of quote cards from Sun Tzu’s The Art of War. The office, the desk and the cards belong to Scott White, editor-in-chief of CP, a news agency owned by some 100 paid-circulation newspapers, that, as members, submit and share content for a fee. Colleagues tease their boss for showcasing the cards, but White calls the sixth century BC masterpiece “the world’s greatest strategic thinking book,” and often dwells on Tzu’s lessons when he’s contemplating the challenges CP faces.

 To describe them, White uses a phrase you won’t find in Tzu’s writing: “Yet another fucking thing.” First on that list is the impending departure of Canada’s biggest newspaper publisher, CanWest Global Communications Corp. Last summer, it gave CP the requisite one year’s notice to pull its 10 daily city papers—including the Ottawa Citizen, The Vancouver Sun and the Calgary Herald — out of the co-operative. As a result, CP stands to lose $4.6 million, just under 10 per cent of its annual budget. This is the biggest assault on the organization since 1996, when Southam Inc. threatened to pull out its newspapers (now, ironically, owned by CanWest) and bury CP.

Though Southam backed down, it took massive restructuring and staff cuts to quell the complaints. Over a decade later, the co-operative is still around, but fighting more battles. As newspapers suffer from dwindling circulation numbers, CP is saddled with the task of staying affordable for its member-owners without cutting services. Meanwhile, demands have increased, both from newspapers and CP’s newest generation of customers, online news outlets, which have unique needs like multimedia content and Internet-friendly formatting. But staff numbers at CP haven’t recovered since the Southam incident, remaining lower than they were before the cuts. Over-exerted reporters are now all-in-one journalists, on the hook for copy, audio and photographs. Add in the expected loss of CanWest’s regional content and CP is spread even thinner across Canada. The list of looming obstacles keeps getting longer.

CP has, however, survived its share of conflicts since it was founded in 1917. And White insists the co-op has a store of defences, including new revenue streams, to ensure its next victories. “It’s not like we didn’t see this coming,” he says of CanWest’s departure and the consequences. “We’re ready, and we will be ready.”

With newspapers, broadcasters and online outlets fighting for the same audience, the news industry in Canada has become a battleground. CP’s co-operative structure, bringing together all these opposing forces, creates a volatile reality for the organization. “The notion of journalistic camaraderie is long, long gone,” says Gerry Nott, editor-in-chief of the CanWest News Service. “If you don’t think this is about outright, straight, hard, cutthroat competition, then you’re wrong.”

The declaration of war between CP and CanWest came early last year in the form of a strategic review report. The document, based on about five months of internal discussions at CP, revealed a gross division in outlook for the co-operative. CanWest stood at odds with the rest of the members, calling for a pared-down CP, with less focus on original content and a completely overhauled structure that would offer “à la carte pricing,” allowing CanWest to pick and choose which material it would buy. Currently, members have only two options when it comes to receiving content from the wire — NewsStream, meant for small or medium-sized papers, and Datafile, the enhanced CP service, which provides about 40 per cent more material. Neither of the services satisfied CanWest’s desire for less CP content. As Nott explains, much of it is redundant for his organization, which has papers covering all of Canada, except the East Coast. “We didn’t want to pay for what I’d describe as a fire-hose feed,” he says. It’s the same fundamental problem Southam had with CP a decade ago.

CanWest also took issue with CP’s return news exchange, the foundation of its co-operative structure. The system requires that members submit their news stories and photos (features, exclusives and related photographs are exempt) to the service, with coverage areas defined geographically. CP then rewrites the copy and distributes it on the wire, but only to papers and broadcasters outside the originating zone, and never online. CanWest, however, didn’t want to share its content with competitors, arguing it contributed more to the co-operative than it used. It was particularly irked by how the system functions in Vancouver, where The Globe and Mail’s city section rivals CanWest-owned dailies The Province and the Vancouver Sun. Because the Globe’s return news area is limited to the Greater Toronto Area, it receives member contributed content from every other market, despite being a national paper. As Nott illustrates, if a ferry sank in the harbour and the Vancouver Sun had a photograph of it going down, it is bound by CP bylaws to submit the picture to the co-operative. The Globe could then, in theory, use the picture for its cover in the Vancouver market—but CanWest’s own National Post couldn’t, as it’s not a CP member (it dropped out in 2004 to save costs), nor could the Province, which is restricted from seeing the Vancouver Sun’s content because the two share a commercial market. When CanWest’s complaints didn’t spark any immediate action, it asked to leave the return news service. CP refused the request. “That was a point of departure for us,” says Nott. With CP reluctant to meet its demands for change throughout the strategic review process, CanWest felt it had no choice but to break ranks.

Even the members sticking with CP are calling for changes. As demand for online news content increases, these papers want CP to become a “multimedia, multiplatform” news agency, according to the strategic review report. Eric Morrison, CP’s president, says that its member newspapers have become much more than print entities. “We would’ve had the Toronto Sun newspaper as a client 10 years ago, and now we have [Sun owner] Quebecor, which has TV and Internet presences” as well. This change has CP struggling to file stories faster while also providing video clips so that its members can compete in a news world increasingly dominated by the likes of AOL Canada and Rogers Yahoo!. Meanwhile, CP has to satisfy the demands of these lucrative online outlets without the help of its member newspapers. Since CP keeps return news off the Internet, websites can only use copy generated by the collective’s reporters.

The Internet poses another challenge to CP in the form of news accessibility. International and national content, CP’s primary product for newspapers, is available to readers 24/7 online. Nott suggests that, as a result, dailies will need stories that are more relevant to their local markets instead of CP’s multiregional content. “[Newspapers] need to drill down locally so deeply to maintain their relevancy in their community that a lot of the traditional kinds of content CP went to great lengths to provide has less value,” he says. It’s an issue that The Associated Press in the U.S. faces as well, and is tackling head-on. One of its latest initiatives is the creation of a web-based system that will allow member newspapers to seek out regionally significant content—not just local news, but also stories related to companies, industries and other entities relevant to the member’s market. “You have to listen to your customers and develop products that are useful to them,” says AP’s Tom Brettingen. “You have to find ways to become more valuable.”

These demands require more of CP’s staff than ever, but it’s had to keep costs as low as possible for members. That challenge has left little room for growth since the massive cutbacks in 1996. When Hollinger bought out Southam and cancelled the pullout of its papers, there were conditions. Hollinger’s then-owner, Conrad Black, wanted “more service for less money,” he told Maclean’s. After immediately eliminating a quarter of its staff—and putting more work on the desks of those reporters it kept on — CP began a major restructuring process. According to Osprey Media’s Michael Sifton, a former Hollinger executive and now chairman of the CP board, that meant scaling back on the creation of unique and costly material. “Therefore there was less original generation, more refinement and circulation of member content,” he says.

It was a move that’s now creating a serious headache for CP. The fact that it put increased reliance on its member exchange 10 years ago means that the loss of CanWest will leave gaps in coverage areas. Though CP has a Vancouver bureau, it won’t have a member paper providing content from the city when CanWest departs (the same goes for Windsor, which doesn’t even have a bureau). There will also be holes in Saskatchewan, where two CanWest papers, Regina’s Leader-Post and Saskatoon’s The StarPhoenix, cover most of the province for the member exchange. “Sitting here in Toronto, a lot of people think that’s fine,” says Jim Poling Sr., former general manager of CP. “But I can tell you most assuredly, news from down here isn’t the way people are living their lives out there. And that’s how you start getting these great divides in the country—different parts of the country don’t understand each other because they’re not getting a good exchange of the news.”

Filling those gaps will be yet another battle for CP, as its purse strings haven’t slackened in over a decade. While the budget has gone up from $46 million to $48 million, the cooperative would have needed a $10 million increase to keep up with inflation. As a result, hiring has been kept to a minimum. The 250 reporters it does employ are maxed out — at the expense of better journalism. “You can’t be a perfect, full-time French broadcast reporter, English broadcast reporter, English print reporter and photographer,” says Montreal’s Les Perreaux, who covered all these positions on the sandy, war-torn plains of Afghanistan. “You’re always just trying to do the most that you can, but you’re never doing anything to 100 per cent.” Reporters in Canada have been feeling the pressure, too, as their list of responsibilities grows along with demands from CP’s clients and members. Like Perreaux, reporter Tara Brautigam has to provide content for print, online and broadcast—and he’s solely responsible for all of Newfoundland and Labrador. “I have to be on top of a lot more things here, because it’s just myself to cover the entire province,” he says. “It’s like that old Looney Tunes cartoon — water spouts out of one hole in the ground, you cover it and two more holes pop up.”

White’s been aware of the changing, competitive news industry since the tumultuous experience with Southam in 1996. He recalls being angry, and says the event left a deep scar on CP staff. For over a decade, he’s been strategizing, a general preparing his troops for the second attack. “You never forget those days, and it’s been a driving force ever since then,” he says. “We’re not going to fail. We want to succeed. There wasn’t anybody who thought this wave wasn’t going to come again, but we’ve had a long time to get ready for it now.”

CP’s first line of defence is financial stability. Over the past 10 years, it has reversed the ratio of member to non-member revenue— that is, newspaper versus TV, radio stations, etc. In 1996, it was a 60-40 split, with member newspapers carrying the bulk. Today, after expanding its marketing division and selling aggressively, non-members contribute 59 per cent of the cooperative’s annual budget, while members represent just 41 per cent (and, as a result, their annual fees haven’t gone up in 14 years). This means CP is not only less reliant on the declining newspaper industry, but also less reliant on any single source of revenue — such as CanWest. Additionally, because CanWest is slated to leave in July, this year CP will only have to deal with $2.3 million of the $4.6 million loss, says Gerry Arnold, CP’s executive editor. Better still, the 2006 Conservative budget included changes to federally-regulated pension plans. As a result, CP’s annual contributions dropped by about $1 million, further softening the CanWest blow.

CP is also branching out by supplying nontraditional customers, like government agencies and corporations, with news. Last November, CP announced a contract with the Toronto Stock Exchange to create a financial market news service, TSX/CP Equities News, directed at traders and other financial houses that receive TSX data. It’s a joint-branded venture, and is distributed by TSX, but CP has complete editorial control. White says that the service has redefined the way CP staffers cover business; they’ve had to increase their speed even beyond the usual demands of the Internet, as seconds can make a huge difference in the financial world. To that end, CP offers 40- word “Biz Flashes” when news breaks. “Sometimes that’s all the information a trader needs,” White explains. He says TSX/CP will outshine business coverage from Reuters and Bloomberg by providing a distinctly Canadian service; while the other agencies offer immediate coverage for the top 30 companies in the country, White says CP will cover the top 100. The venture will add a decent chunk of revenue, though Arnold won’t say exactly how much.

CP is also diversifying its core product, with an increasing focus on multimedia news. In January, for instance, it created a package examining the individual lives of Robert Pickton’s 26 alleged murder victims. Aside from its unparalleled depth, the project reflected a changing news agency. It provided content purposed for broadcast, print and the Internet. There were feature stories and short radio pieces on each of the victims, but also a broader, 20-minute radio documentary, as well as some video content. The print component is one of CP’s early hopefuls for the 2007 edition of the National Newspaper Awards.

White disagrees with the notion that ease of access to national and international news via the Internet treads on CP’s territory. He believes newspapers will always require news from outside their immediate area, and that CP will always be ready to provide. “No one’s buying a newspaper for the CP content,” he says, admitting that it’s an interest in Vancouver news, for example, that drives sales of the Vancouver Sun. “But they also want to know what else is going on. They would want some non-local stuff, sports or business or whatever. Where are they going to get the rest of their news? That’s the whole beauty of the co-operative,” says White. And while readers could, in theory, seek out all their non-local news online, it would be a massive, unfiltered search for the stories that truly matter. As Kelly Toughill, an assistant professor of journalism at University of King’s College in Halifax and former deputy executive editor at the Toronto Star, argues, few people have the time for that kind of information quest. “CP aggregates the best news every day and offers it to every market,” she says. “The chances that readers are going to go through the Internet and find the interesting stories from every small community is ludicrous. This is what I do for a living, and I don’t even do that.”

As for covering the news gaps left by CanWest’s departure, White says CP has brought back a second correspondent to Saskatchewan (it had cut one to save costs) to cushion the loss. Though it’s looking at enlisting a freelancer to help with coverage in Windsor, White says it’ll also rely on broadcasters to cover short-staffed regions. “We’ve got a lot of ways we can reach out and get the news,” he says. “Not to say that I’m not worried —I am worried— but I’m also confident that we’ll be able to do it.”

For now, one of White’s priorities is experimenting with online video. He thinks that soon most people will seek news online first, and then go to other mediums to complement the information. “As wireless expands, it’s just going to be way easier to access your information that way. People are starting to watch video on these things,” he says, holding up and waving around his BlackBerry to illustrate. White has established the video offerings as an optional add-on for a fee (even from member newspapers’ websites). He’s already purchased more than 50 cameras, certain that his staff will embrace the new opportunity. He knows they can confront the battles ahead.

There are two important terms in The Art of War —the tao and the ch’i,” says White. He explains that the tao refers to the way, or the mission, while the ch’i refers to the spirit, the drive to do better. “People have to know where it is we’re going and have the ch’i, or pride, in their work. And when you get excellent people, why do they stay here? Because they believe in the mission that we’re a not-for-profit company whose job it is to keep Canadians informed. And it’s corny as shit, but there are a lot of people who do believe that.”

Despite his confidence, White doesn’t want to bog down reporters with another responsibility, so he’s letting them test the waters on a voluntary basis with video. “But at the same time, I say, it’s a good thing there’s yet another fucking thing. It’s the time that somebody doesn’t want something from you when you have to worry.”