Canadian Press Wire Service Well Prepared If CanWest Pulls Out

By: Mark Fitzgerald

At the Canadian Press? annual meeting in Halifax this spring, members put the finishing touches on a detailed strategic plan and listened as CFO David Ross assure them that its finances were strong enough to handle any unpleasant economic surprise. The first challenge to CP came just weeks later, as Canada?s biggest newspaper chain, CanWest Global Communications Corp., served notice that it may pull out of the wire service by next June.

But while the withdrawal of Gannett Co. or Tribune Co. might be a disaster for the Associated Press, CP looks well prepared to handle the loss of CanWest?s 11 dailies and U.S. $4.13 million annual contribution, if it comes to that.

Under CP bylaws, members must give notice in June to leave the cooperative by the next summer. In a statement, CanWest says it has made no final decision on leaving CP. ?We?d prefer if they stayed, but it?s certainly a manageable situation for us if they go,? CP Eric Morrison tells E&P by phone from Toronto.

CP?s confidence — almost diffidence — about the CanWest announcement reflects the enormous changes that the agency has implemented in recent years. For one thing, newspapers now account for just 40% of CP?s revenue, compared to 60% about a decade ago. CanWest?s payments, while substantial, amount to just 9% of total revenue, Morrison says.

The lion?s share of CP revenue now comes from what it calls ?commercial accounts,? everything from selling content to broadcasters and Web sites to internal feeds for government agencies and private businesses. Like AP, CP is also now in the ad-delivery business.

All that is only going to expand, says Morrison, with the adoption of its strategic plan: ?We?ve been moving cautiously into online, like AP, but now we are going to be really pushing forward with the engine of new media growth.?

CP is Canada?s top news content wholesaler, and is positioning itself ?sort of like ?Intel Inside,?? for customers, he adds.

The cooperative is betting that the often accuracy-challenged bloggy online world is a perfect marketplace for CP?s brand of just-the-facts, no-opinion news. It helps, too, that CP offers news content for the one-third of the Canadian population that speaks and reads French.

If CanWest does pull out of CP, the cooperative is also well positioned to survive the loss of its news reports, Morrison says, because nearly all of its papers are in bigger cities where CP staffs bureaus.

?In fact, losing CP,? Morrison says, ?is going to diminish CanWest?s news filings pretty considerably.?

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