September 2nd, 2010
Today letters went out to employees at the Victoria Times Colonist, Vancouver Sun and The Province announcing buyouts.
Over the past week Postmedia has been cutting jobs at its newspapers across Canada. Positions have been chopped at the Calgary Herald and Edmonton Journal.
Below is the text of the letter from Kevin Bent to PNG employees. The company has not provided us with any other details.
“Pacific Newspaper Group announces that we will be accepting applications for the Voluntary Staff Reduction Plan (VSRP).
“As our Company emerges from CCAA protection in an economy that remains volatile, we must continue to find ways to serve our readers and advertisers in more cost-effective ways while we continue to transform our business.
“Eligible employees for consideration for the VSRP are regular full time or regular part time employees who are covered by Part “A” (Former Guild) of the Collective Agreement.
“The VSRP terms and conditions are outlined in the Collective Agreement. The basic provisions are 6 weeks pay per year of service to a maximum of $150,000.
“Applications will be accepted up until 5PM Friday September 17th. Application forms and a Frequently Asked Questions document are attached or can be obtained from the Human Resources Department.
“Offers to those employees making application will be at the sole discretion of the Pacific
Newspaper Group, subject to VSRP parameters regarding classification and seniority. PNG Human Resources are contacting the CEP Local 2000 to establish a plan oversight committee further to the plan provisions.
“Prior to any offers being extended, PNG will assess operational and staffing needs, financial considerations, the timing of departures and the number of applicants. Those being accepted for the VSRP at this time should expect to have their employment cease prior to October 31st, 2010.
“Any questions about this plan may be directed to your Department Manager or the Human Resources Department.”
Please check this website for further information.
Gary Engler
Posted in Blog, Canwest |
June 11th, 2010
Here’s wishing at least one business reporter would ask some questions about the deal to buy Canwest newspapers, rather than simply repeating what’s in company press releases.
On Wednesday, less than 24 hours before creditors were supposed to get together to approve a court-sanctioned deal, the meeting was postponed and late Thursday night it was announced that the buyers have “proposed amendments to the composition of their funding commitment.”
The spin? This is good news because the Ad Hoc Committee of 9.25% bondholders had “tweaked” their offer to reduce the debt burden of the new company. While the unsecured creditors proposed share in the new company falls from 45% to 32.5% (the mostly U.S.-based hedge funds get 67.5%) under the reorganized offer, this too, we are told, is good news because less debt means the new company will be worth more.
But, here are some questions that should be asked, given the circumstances:
“You’ve decided to restructure the deal so the new company has less debt. Does this mean you were having trouble selling the previous plan to investors?”
And: “Is your decision to alter your original plan, at least in part, due to the uncertain conditions in the world financial markets?”
We know, for example that last week Porter Airlines cancelled its planned initial public offering (IPO), citing poor market conditions.
“What effect will the uncertain market have on the planned IPO for the new newspaper company? Is it possible that you may back out of this proposed deal if the IPO market remains flat?”
Yes, one of the main players in the proposed deal, Steven Shapiro, a founder of Golden Tree Asset Management was quoted as saying “‘it’s way too early’ to think about an exit” which suggests the U.S.-based hedge funds are contemplating operating the newspapers for some time. But how can they do that? After all, there are laws in Canada that require newspapers to be Canadian owned.
“Has the federal government changed the laws that require Canadian ownership of newspapers? If not, how do these U.S. based hedge funds plan to get around those laws? Will the Harper government simply ignore the law? Will the Liberals, NDP and Bloc go along with that?”
Oh so many questions and very few answers.
Gary Engler
Posted in Blog, Canwest |
May 26th, 2010
The sale of Canwest’s newspapers, approved in principle last week by a bankruptcy judge in Toronto, to an ad hoc committee of bondholders, mostly based in the USA, does little to reassure 1,700 members of Canada’s largest media union who work for the chain.
“In fact this proposed sale under the creditor protection process may be no solution at all to the debt woes that got Canwest into bankruptcy protection in the first place,” says Peter Murdoch, Vice-President, Media, of the Communications, Energy and Paperworkers Union of Canada.
Under the deal, the new company will be saddled with $700 million in loans from US banks. Plus there are other credit arrangements with US hedge funds that will raise the debt load higher.
Murdoch points to media reports that a $400 million loan being used to partially finance the purchase will pay extremely high interest rates, in effect replacing debt that got Canwest into trouble with another mess of junk bonds.
“It doesn’t add up,” he says. “Torstar, with over a hundred years in this business, thought Canwest papers were worth $800 million, but financiers with no newspaper experience will pay $1.1 billion. We fear our members, other employees and the Canadians who rely on these newspapers to keep them informed will ultimately pay the price of yet more financial risk taking.
“And we have laws in place to protect Canadian ownership of critical cultural industries, including newspapers. Can the laws simply be ignored because the current government doesn’t believe in them?
“This proposed sale seems to satisfy the self-interest of banks, Wall Street hedge funds and other creditors, but what about the journalists, sales staff, press operators and others who will be left working for a company that still has very high debt levels and is controlled by Wall Street hedge funds?”
CEP National Office press release
Posted in Blog, Canwest |
March 30th, 2010
Screw the workers and look after ourselves! This seems to be the motto that Canwest senior managers live by, as judged by their actions in the current Companies’ Creditors Arrangement Act (CCAA) proceedings.
Not content with the original $3.4 million worth of incentives for 24 senior managers (half paid out last December) to remain at their jobs, plus an additional $1.2 million in “special arrangements” for Dennis Skulsky and another unnamed senior manager at the National Post, last week the court was asked to approve even more payments. The reason? The work these senior managers do is critical to the company, their workload has gone up and their already high salaries are just not enough incentive to keep them on the job. They just might (gasp) quit, unless they get more money!
So what did the court do upon hearing this sad tale of executive woe? It approved an additional $1.3 million in incentive payments for the original 24 senior managers, plus three more who have now also been deemed worthy.
Who are these 27 senior managers? We don’t know because the court documents keep their names and individual payments secret. What we can say is that certain senior Canwest corporate types are beneficiaries of the CCAA system’s bias towards rewarding select executives for their plain-to-see failure (after all the company is in bankruptcy protection).
And we do know for sure that Local 2000 and Local 525 members who work at College Printers are not among the lucky few getting bonuses for continuing to do their jobs. In fact, there is a very real possibility that the 100-plus union members will not even get what their contracts say they are supposed to get when the plant shuts down at the end of September. This is because under the current CCAA system, companies may legally avoid paying severance, just as they can legally stop making up shortfalls in pension plans.
Our union asked certain Canwest execs to tell the court-appointed monitor that there was a good business case to be made for guaranteeing the severance payments at College Printers. After all, the Canwest-owned printing plant does have a contract with the Globe and Mail to print the B.C. edition of that paper until Sept. 30, 2010. Wouldn’t you think that makes essential the people who do the actual work of printing the paper?
Not according to the company’s letter that was sent to the court-appointed monitor. (It made it seem like the union was twisting the company’s arm even to write a letter.) Not according to the CCAA system.
According to the system, it’s okay to screw workers out of what’s in their supposedly legally binding contract. Not only that, the system says give the money, and more, to 27 already highly paid executives instead of the workers.
The lesson? I’d say it’s time we changed the system.
Gary Engler
Posted in Blog, Canwest |
March 12th, 2010
So now that we have some idea of who is interested in buying Canwest’s newspapers which one of the bidders should we, the employees, be cheering for?
According to news reports “about” six companies or consortiums have submitted expressions of interest in the first stage of the sale process as outlined in the Companies’ Creditors Arrangement Act (CCAA) proceedings. A committee of secured creditors is supposed to decide by next week which bidders, if any, move onto the second stage of the process.
One consortium is said to involve Gail and Leonard Asper. Paul Godfrey, current head of the National Post apparently has the financial backing of Onex and the Alberta Investment Management Corp. (AIMCO), which manages public sector pension funds. Two other companies familiar to Local 2000 members, Glacier Media and Black Press are also said to have made expressions of interest. Details about other interested parties have not yet been revealed.
According to the Financial Post the initial bids are mostly less than the $950 million “floor” that the banks, led by Bank of Nova Scotia, said they wanted.
But, “everyone is convinced that the creditors will take cash in a bid that’s less than the stalking horse bid,” a source close to the sale told the Financial Post. “It’s a matter of time and the question is when.”
While the number of interested bidders is good news for those of us employed by Canwest’s 11 dailies and 35 weeklies — showing that at least some investors think the newspaper industry has a future — we must be careful what we wish for.
Our self-interest is to have a new owner who is committed to the long-term health of the newspapers we work for. And this means investing in quality journalism, which in the long run will be what determines the viability of the entire industry. Citizens, institutions, companies, political parties and especially democracy all require “the news” that we provide better than any other sector of the media.
Sure, it takes more than reporters and editors to produce a paper — at Local 2000 we represent sales people, press operators, mailers, accountants, clerical staff, janitors and others — but we want a new owner who understands quality journalism is our core product. We want a new owner who understands that you get what you pay for in journalism. Gathering the news requires people to spend time talking, reading, interviewing and connecting dots before even beginning to produce a story. Of course, this comes at a price. But the price will be much higher — throwing away your investment — if your plan is to continue chopping costs.
Our newspapers are at a crossroads. We can head in a direction that makes us irrelevant or we can focus on what we know makes us essential — gathering the news — and thrive in the age of changing technology.
I’m cheering for the bidder or bidders who get this.
Gary Engler
Posted in Blog, Canwest |
February 2nd, 2010
The restructuring process, including finding a buyer(s), for Canwest newspapers gets more curious with every filing of new material to the court-appointed monitor’s website.
So far this week, a reading of the new documents reveals a nasty power struggle between important financial interests who are secured creditors and no-less important financial interests who are unsecured creditors — with Leonard Asper apparently on the losing side. There are also hints of soap-opera-like betrayals at the senior management level and other indications of dissent at the top.
While the court ruled today that secured creditors (primarily Canada’s big five banks) will not have a formal veto over bids and also added a week to the first round of the bidding process, the anger of unsecured creditors jumps off the pages of their submissions to the court. They did not want Canwest to enter CCAA and neither did Leonard Asper. For a taste of the comments by unsecured creditors see our story about developments yesterday. For the Asper angle download and read his Jan. 4, 2010 letter here Asper letter (195).
As for betrayal at the top, download and read former Ottawa Citizen publisher Russell Mills’ affidavit about how he and other retired Canwest executives had their pensions slashed here Mills letter (364).
Reading this and two other former senior executives’ affidavits must suggest to current senior managers just how far loyalty to the company gets them.
For me the whole CCAA process is yet another reminder of the importance of union solidarity. We need to look after each other as best we can, because the system can be pretty cruel.
Gary Engler
Posted in Blog, Canwest |
January 22nd, 2010
“What’s going to happen next?” remains the hottest topic of conversation among Canwest employees two weeks after the company’s newspaper division entered creditor protection.
Here’s what we do know:
The big Canadian banks that, in effect, are currently running the company because of the debts owed them, have made an offer of $925-$950 million for “substantially all” the newspapers, websites, printing plants, etc.
A process has begun that solicits “expressions of interest” in Canwest newspaper assets.
One expression of interest that has been reported is for the Montreal Gazette, Ottawa Citizen and National Post and no other papers. The public faces of this expression made many comments about local ownership, community connections and the problems of chains, opinions that we have expressed for many years.
Canwest spokespersons, on the other hand, have talked about the desirability of all the newspapers staying together as part of one national advertising selling organization. However, we do know that these Canwest spokespersons are unlikely to wield much influence in the ultimate decisions regarding who buys what. The bottom line will be most important to those with the real power in this process, which are the banks.
For example, it may make sense to sell off all the big city dailies to one buyer; Windsor, Victoria, Nanaimo and Alberni to others and weeklies to yet another. This or some variation may produce the biggest aggregate offer.
Debt, or more precisely the lack thereof, remains the key to the success of this process, at least from the point of view of those of us who are employed producing newspapers, large and small. It is in our self-interest that whoever buys the whole, or pieces, of Canwest’s newspaper empire owe as little as possible, so that we do not end up in the same situation a few years down the road.
We have another six weeks to go, according to the CCAA plan, before we may know all those who have expressed interest in purchasing assets.
Regardless of the outcome of this process, all the Canwest assets may not find buyers. For example, what will happen to College Printers, which prints the Globe and Mail for the B.C. market and many of the Canwest Lower Mainland community papers, but which the company has announced will close on Sept. 30, 2010? Will a buyer be found that wants to keep the plant open, at least through Sept. 30? If not, what happens to Local 2000 and Local 525 members who will be owed severance and vacation pay?
How Canwest, the banks, the court monitor and the judge treat our most vulnerable members will be an important factor in shaping our union’s strategy in this CCAA supervised sale process. Will the banks wage war on our members, forcing us to respond in kind? Or will there be room for good will, sitting down to talk and trust?
The next few weeks will be interesting.
Gary Engler
Posted in Blog, Canwest |
January 7th, 2010
However one characterizes it — criminal or just the way the capitalist system works — Hollinger’s last chapter is a fitting end for the newspaper empire once run by convicted felons Conrad Black and David Radler.
In this end to the story of what was once the dominant newspaper chain in Canada, controlled by Lord Black of Crossharbour who currently resides in a Florida prison, $43 million is “diverted” from the pockets of retired workers to shareholders and no one (so far) goes to jail.
Here’s the short version of what happened:
In July 2000, Canwest purchased most of the Canadian newspapers once owned by Hollinger, but as part of the deal Hollinger continued to pay for pensions and benefits for those former employees who had already retired and all payments for people then on long-term disability.
In January 2006 Hollinger sold the rest of its assets to the company now known as Glacier Media. Once the sale was completed Hollinger had no ongoing business activity.
However, it continued to administer post-employment, post-retirement and pension benefits for approximately 3,000 former employees of the Southam/Hollinger newspaper chain. At that time Hollinger had assets of well over $150 million to pay for its responsibilities to retirees and disabled employees.
On December 10, 2009 Hollinger (as Hollinger Canadian Publishing Holdings Co.) filed for protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA) claiming liabilities of $94.4 million and assets of $32.6 million.
What caused Hollinger’s assets to shrink from over $150 million to $32.6 million in less than four years?
On Nov. 1, 2006, Hollinger loaned its parent, the Sun-Times Company, $50 million (US).
Hollinger held $48.2 million (US) in Asset Backed Commercial Paper (ABCP) when the market froze in August 2007. According to court documents $28 million (US) of these were sold for $21 million (US) and of the remaining $20.2 million (US), $7.1 million (Can.) may be recovered.
In January 2008, the Sun-Times Company was notified by the IRS (U.S. taxman) that it had reassessed the company’s tax bill in light of the fraudulent activity of Conrad Black and David Radler. The Sun-Times now owed hundreds of millions of dollars in back taxes. It was widely speculated at the time that the company would be forced into bankruptcy. (It did file for bankruptcy protection on March 31, 2009.)
Despite this, in October 2008, Hollinger made a dividend payment to its shareholders of $43 million.
“Hollinger paid out $43 million to its shareholders at a time when it should have been apparent that this would have an adverse impact on the rights and entitlements of retirees,” said Peter Murdoch, vice-president media for the Communications, Energy and Paperworkers Union of Canada CEP.
Documents filed in the Hollinger CCAA proceedings just before Christmas show that this $43 million dividend was issued on the basis that Hollinger had sufficient remaining assets to satisfy all of its obligations, including its obligations to Southam/Hollinger retirees. However, Hollinger’s single biggest “asset” was the $50 million (US) loan made to its parent company, the Sun-Times Company, which would prove worthless a few months later upon the Sun-Times bankruptcy filing in the U.S.
“The timing of these transactions raise serious questions that require investigation,” said Murdoch. “It is unconscionable that a company which should have seen the writing on the wall decided to pay off its shareholders and thereafter abandoned its pensioners. If it isn’t illegal, it should be.”
Gary Engler
Posted in Blog, Canwest |
November 30th, 2009
The suspense is killing us. When will Canwest’s publishing side enter creditor protection?
Soon seems to be the consensus. It’s not a question of if, but when — that seems certain. Still, we’re dying to know more about what’s happening behind the scenes. While we’ve learned to live with the uncertainty, we’re desperate for answers.
Who will end up owners of the Canwest newspapers? Will the dailies be sold off together or in pieces? What happens to the B.C. weeklies and small dailies? Does the announced closing of College Printers next September mean Canwest already has a plan for its papers printed there? What happens to Canwest News Service and other integrated operations if the chain is broken up? If a buyer(s) pay(s) too much and therefore takes on a pile of debt will we be back in the same spot a few years from now?
Show us the deal(s), so we can get on with our lives!
Since no one is talking, we’ve taken to looking for signs. Certainly the headlines about Canwest’s latest financial results do suggest a story.
Here’s the CBC: Canwest revenues, profit slump. Toronto Sun: Canwest revenue, profits spiral downward. Canadian Press: Canwest Global posts fourth-quarter loss on weak advertising revenues. Reuters: Canwest posts drop in revenue, operating profit.
But on the Canwest-owned Canada.com website: Canwest reports quarterly operating profit of $52 million.
Perhaps the positive spin suggests Canwest is still trying for a higher price.
And Leonard Asper’s message to employees this morning certainly strikes a “glass-half-full” outlook:
“Publishing too has made strides under difficult conditions. I know that it continues to be tough sledding but I can see signs of the economy starting to stir and I know the work that has been done to position Publishing to take advantage at the local level and nationally. Two areas that really struggled last year – the real estate sector and the auto sector – have shown some improvement from the last quarter.”
We hope the spin is just as positive come next round of bargaining.
***
What would you get if you crossed Rupert Murdoch and Conrad Black?
We may soon find out.
Lachlan Murdoch, the elder son of Rupert, is reported to be close to buying U.S. trade magazines including the music and entertainment industry bibles Billboard and the Hollywood Reporter.
His company, Illyria, is interested in the bulk of Nielsen Business Media in partnership with a newly created investment team that includes a nephew of Conrad Black, according to the Financial Times.
Pluribus Capital Management brings together James Finkelstein, the publisher of Washington insider newspaper The Hill; Matthew Doull, a former publisher of Wired and Black’s nephew; and George Green, the former publisher of Hearst International.
***
Despite some doomsayers, the printed newspaper seems very much alive, in London at least. According to the The Guardian, a group of unknown investors is planning to launch a new freesheet, the London Weekly. About 250,000 copies will be distributed twice weekly, on Fridays and Saturdays, outside rail and tube stations.
No launch date is confirmed, although there are rumours in the industry that it could appear in February. An online holding page states that the London Weekly website will go live on 20 December.
A press package prepared for potential advertisers says that publisher Global Publishing Group has raised more then £5.5m to launch the title, along with a website and online radio station and TV channel.
A detailed rate card says a full-page ad in the paper will be priced at £5,250 and a double-page spread at £9,291.
Gary Engler
Posted in Blog, Canwest |
October 30th, 2009
“Welcome. Make yourself at home.” While those are your words, you’re thinking: Okay they’re family, but they’re losers who act like they know it all. Have I bought enough beer? I really can’t afford this. Why does the National Post have to stay with us?
Pardon the rest of Canwest newspaper employees for feeling more than a little leery about the prospect of the National Post returning to the financial embrace of “the LP Entities” — as the lawyers and company executives currently dining at the Michelin three star establishment named CCAA refer to our employers.
Sure we’re glad that 277 Post employees will keep their jobs for at least a while longer. But how will this affect us?
In the court documents filed (http://cfcanada.fticonsulting.com/cmi/) as part of the Companies Creditors Arrangement Act proceedings, we learn that the National Post has “had an EBITA loss of $20.3 million, $16.3 million, $13.1 million and $12.7 million, respectively” from 2005-08 and is projected to have had a further loss of $9.3 in the 12 months ending August 31, 2009. In 2001 the Post lost $60 million. Over seven years NP has been bailed out to the tune of $139.1 million.
How can these sorts of losses possibly be good for the financial health of the “LP Entities” that include 12 dailies and 22 non-daily newspapers? In the past year, the 5,400 people working for these publications, including over 1,200 members of CEP Local 2000, have been asked/told to cut wages, to give up promised increases, and to make other concessions because not enough profit is currently being made. Adding in the National Post’s losses can only make matters worse.
(It is not only the operating losses that are being taken on, but also the National Post pension plan, which had a winding-up deficiency of $1.6 million as of December 2006. In addition, the “LP Entities” will take on up to $6.3 million in assumed liabilities and make a cash payment of between $2 and $2.5 million.)
Despite a management assertion, in court documents, that “closure of the National Post would increase the LP Entities’ cost burden by approximately $14 million in the fiscal year ending August 31, 2010,” the numbers just do not add up to good news for the vast majority of Canwest newspaper employees.
Instead, the real story is that creditors have been convinced they will get a bigger return on their investment in Canwest debt if the National Post is part of the package of newspapers to be sold. Their plan is to sell a “national network” of newspapers to investors who have been convinced by “convergence” logic similar to what got Canwest in trouble in the first place.
The idea that there are “synergies” in owning a chain of national newspapers anchored by a “flagship” national paper still sounds good to some, despite its actual dismal history.
In reality this form of ownership and operation is a failed experiment. It treated a chain of newspapers like a television network, where the same programs run on every station at the same time. But newspapers are not the same as television, where central buying of content made by Toronto or Montreal or Vancouver or Hollywood studios makes sense.
People buy and read local newspapers to get local news collected by journalists who are members of their community.
The truth is newspapers work best when they reflect the communities in which they operate. People want well-written, unique local news and an editorial slant that champions diverse viewpoints. Not reheated, bland “infotainment” from a “news service” with a narrow political agenda.
Victoria is not Vancouver, which is not Calgary, which is not Edmonton, which is not Regina or even Saskatoon, which are not Windsor or Ottawa, which are definitely not Montreal. Each has its unique politics, culture and sense of itself when looking into a mirror. Successful newspapers reflect that uniqueness.
The best thing that could happen as Canwest disappears through “restructuring” is local ownership. We need news outlets that communities feel belong to them. That’s what we should be fighting for. That’s what makes economic sense, especially in the age of the World Wide Web, when getting news you can’t get anywhere else is the only way to stand out.
The employees of Canwest have their jobs on the line as the corporate restructuring takes place. If the hedge funds, executives and lawyers get it wrong, it is ultimately the employees and the communities they serve who will pay the price.
We owe to ourselves to speak up.
Gary Engler
Posted in Blog, Canwest |
