Publishing / Permanent Press = Pacific Press
April 02nd, 2008
Once upon a time, there was a city with three competing daily newspapers. That city was Vancouver. It was a lot smaller than it is now, and advertising revenue was, in total, a lot thinner than it is now. Today, with three times the population of those halcyon days in the early Fifties, Vancouver has only two dailies and they’re both owned by CanWest Global, which also controls BCTV. The diversity of social and political views represented by the old Sun, a feisty, small ‘l’ liberal paper, and its rival, the Tory Province, has been replaced by something called “convergence.” Convergence is a buzzword for cost-efficiencies and economies of scale in the news and entertainment business. Read: fewer stories and less variety of editorial content. Read: central planning of the news.
What happened? In his ambitious study of the newspaper business in post-war Vancouver, Pacific Press: The Unauthorized Story of Vancouver’s Newspaper Monopoly (New Star $39), Marc Edge sets out to provide the answer. It’s a big, vibrant, interesting book full of vignettes of newsroom rivalry and corporate drama, but the tale it lays out is a depressing illustration of market forces left to accomplish what market forces will without the guiding hand of regulation. That unregulated markets tend to produce monopolies and price-fixing rather than cut-throat competition was a seminal insight of Karl Marx, certainly one of the handful of Marxist analyses that has stood the test of history. The most astonishing thing about the Pacific Press monopoly was that, through most of its history, it threatened to be a money losing proposition for one if not both parties to the arrangement.
Pacific Press as an entity originated in 1957 when Southam Newspaper chain general manager, St. Clair Balfour, made the owner of the Vancouver Sun, Don Cromie, an offer he couldn’t refuse. Fierce competition between Cromie’s Sun and Southam’s Province had gradually been eroding the Province’s market share. Following a pattern common in many city markets, the second-place paper was inexorably losing ground to the front runner in a battle for advertising dollars. Advertisers simply preferred the larger circulation vehicle. The Province was in trouble, but Cromie feared the chain’s deep pockets might give it the staying power to best The Sun in an all-out advertising war. Balfour flew from Southam’s headquarters in Toronto to make his offer: an amalgamated printing and production arrangement that would see profits and costs split equally between the two papers. He sweetened the offer with almost four million dollars cash (worth more than ten times that today) to offset The Sun’s greater profitability. Cromie accepted.
The arrangement wasn’t new. It had already become a trend in many American cities, where anti-trust laws eventually had to be amended to make special exemption for newspapers in order to accommodate what was, in fact, a fait accompli. The arguments used in the US were echoed in Canada when the Restrictive Trade Practices Commission investigated the deal. By amalgamating production facilities, Cromie and Southam asserted, the two companies were actually guaranteeing diversity of news in the Vancouver market. This was because the agreement carefully stipulated the papers remain strictly independent of each other in the publishing field. Without such an agreement, corporate spokesmen testified before the Commission, one of the papers would likely fold, leaving the city with a more onerous type of monopoly.
The critics fulminated—but Canada’s anti-combines laws had never been strong. The Commission recommended legislation preventing the partnership from becoming a publishing as well as a production monopoly, but, predictably, that legislation was never enacted. Ironically, the provisions of the Pacific Press agreement, which saddled the smaller circulation Province with an equal share of production costs (thereby causing it to have a higher overhead per issue than its rival), and distributed the money-making The Sun’s profits equally to the money-losing Province, in the end caused grief to both papers. Management was also extremely unwieldy – with separate publishers negotiating in tandem with a single production management team against a single shop of printers and pressmen and two sets of journalists, all united in a Joint Council of unions. Equally predictably, distrust, rumour and turf wars abounded. And in the seventies, the heyday of labour militancy in BC, there were ruinous strikes, accusations of lock-out, exorbitant wage demands, even—fed by chronic problems at Pacific Press—the appearance and disappearance of rival dailies, some of them created by union members to augment their strike pay.
With the logic of tragic inevitability Edge records the corporate response to these difficulties. The upstart FP group had the money to buy the Sun from Don Cromie and his family in 1963, after which neither Vancouver paper was locally owned. FP in turn was bought by the larger Thomson chain in 1980. Thomson’s approach to the business was to cut costs, cut staff, cut editorial independence. It also reached a deal the same year to close the Ottawa Journal and sell the Sun to Southam, while Southam closed its money-loser in Winnipeg, The Tribune. Now Southam owned both of Vancouver’s dailies outright, and the situation the Restrictive Trade Practices Commission had warned about in 1957—a publication and production monopoly—had come to pass. The Trudeau government once again called in the would-be regulators and set up a Royal Commission on concentration of newspaper ownership called the Kent Commission.
Its fate at the hands of federal legislators is covered in the book. In the United States, which tends to boast of having stronger anti-trust laws than Canada, newspaper monopolies are the rule in many cities as a result of legislation sponsored by President Richard Nixon. Nixon, in turn, Edge notes with delicious irony, considering his subsequent behaviour and fate, “received the highest percentage of endorsement of any candidate [for the presidency] in modern times.” In Vancouver, the struggling Southam chain fell to Conrad Black’s Hollinger Corporation in 1992. Black in turn sold to CanWest in 2000.
With each change of corporate master more assets fell under the sway of one owner—TV stations and weekly newspapers as well as the dailies. And also with each change came more ruthless business practices, which, Edge explains, placed “marketing” values above editorial content and curtailed journalistic independence. This growth of corporate culture at the expense of the journalistic culture it was supplanting is one of Edge’s major themes. Unsurprisingly, what editorial content there was in both the Sun and the Province also became, over the same period, more business-oriented, less friendly to social welfare and interventionist measures. The present editor of the Sun is a professed libertarian—in other words, a laissez-faire capitalist. The competitive spirit still lives—if only in the minds of corporate monopolists and their employees!
Pacific Press tells what is journalistically referred to as a ‘troubling’ story. I have given only the barest idea of a complex and densely written book. There are some fine portraits of journalists and their managers along the way – the irrepressible Allan Fotheringham, who once aspired to edit the Sun, the extremist, Doug Collins, whose ego was bigger than the papers he worked for, the exquisitely civilized and diplomatic Stuart Keate, long time publisher of the Sun. Edge tells a story that needed to be told, if only, as he says in his introduction, to bring to public attention a situation in which our most precious asset in a democracy, freedom of speech, has been allowed to dwindle into the care of centralized decision-makers pursuing their own very narrow goals.
While not particularly friendly to unions or to the distortions of sensible business practice that recalcitrant unions like the pressmen can cause, Pacific Press provides compelling evidence for the view that the markets for mass media behave very much like financial markets as described by George Soros in his new book, On Globalization (Public Affairs $20). “Left to their own devices,” Soros writes, they “are liable to extremes and eventually break down.” What we have in Vancouver is a breakdown of the mass market for free speech.
Edge’s book is an extended and unapologetic editorial on the current philosophical scam that everything will be better as soon as the government leaves it alone. Like its equally cheesy rival, the notion that everything under the sun should be controlled by the people as embodied in their government, perhaps assisted by instant electronic referenda (or, for that matter by god as embodied in his mullahs), this scam is inevitably cover for some breathtakingly bad business. Marc Edge is a voice for those who think sanity and good business lie somewhere in the middle, where compromise and clear talking, not programmatic and hypocritical dogma, are to be found. The first and last question Edge asks his readers is, Why did our democracy fail to protect itself from the competing freedom of enterprises with massive capital resources to spend in the pursuit of their very separate and not necessarily compatible interests? Good question, indeed. A good part of the answer has to be that the organs of public debate are increasingly a monopoly of those (inherently undemocratic) business interests.
Essay Date: 2002