Saturday, September 11, 2010

CTV sale means fallout for Canadian newspapers

Not the most political story here, but it could have implications for the strength of two of Canada's leading newspapers. Yesterday saw the big news that Bell was buying CTV and splitting the Globe off from CTV Globemedia. The big focus in television coverage was on Bell and its drive for content for the new technology era, ramping up cell phone and digital offerings and such. Exciting, flashy stuff but the newspaper fallout might be pretty significant too.

The Thomson family is regaining its majority ownership in the Globe and while it's hard to say what it'll mean for sure, the reporting on it suggests strong sentiments coming from the new (old) owners:
The Thomson family, Canada’s most enduring media dynasty and the controlling shareholder of global information provider Thomson Reuters Plc, has a long history with The Globe. The family first owned the newspaper in 1980, and Woodbridge chairman David Thomson told Globe employees on Friday of the deep affection his family has long held for the newspaper and their commitment to investing in the paper’s future.

He remembered how The Globe was central to conversations he had with his grandfather, Roy Thomson, when he was a child.

“The pleasure for me is immense today,” he said, referring to the paper as the “soul” of his family. “The Globe really matters to the family. We are now ready to put teams together to innovate and implement. We are the premier content provider in this country and we only seek to become better.”
There's an editorial today speaking of the commitment to editorial independence that was reiterated by David Thomson on Friday to the staff. The Globe is moving back to publishing ownership, away from the television angle. It's probably a neutral swap in terms of financial backing from the new majority owners, Thomson himself is said to be worth about $19 billion and Thomson Reuters, outside of its recession earnings, seems like the type of company a newspaper would want to be affiliated with these days! Tremendous information resources, sources, expanding into a profitable legal database world too.

Secondly, the Bell/CTV move means good financial news for the Toronto Star as well. Torstar, the parent corporation, gets a bundle by selling their stake in CTVglobemedia, about $345 million. This is being viewed as freeing to Torstar:
Mr. Holland said the money will be used to pay down Torstar’s debt, a move that another analyst said on Friday would be “absolutely the right move.”

“It was a drag on [Torstar’s] earnings,” said one media analyst, speaking on condition of anonymity. “I think a lot of analysts didn’t give a lot of value to [the investment].”

“It’s tremendously positive. It’s a stake that was purchased some time ago in a different media environment,” the analyst said.

Analysts suggested that, once saddled with less debt, the company could look at raising its dividend, and may focus on investing in digital media assets that complement the business more than television assets did.
Did two of Canada's leading newspapers just get stronger as a result of yesterday's big TV deal? Hard to say, but it will be interesting to watch now to see what, if any, changes do come down the pike with them. With all the newspapers in trouble around the world, struggling in a digital media era, the health of two of Canada's leading print media voices is worth watching. If there is indeed a bit of positive fallout from this transaction, all the better for Canada's democratic health and the role the media plays in fostering it.