By: Mark Fitzgerald
Like its counterpart in the U.S., The Associated Press, The Canadian Press has been a cooperative of newspapers and other news organizations since it began in World War I. But a new tentative deal would convert CP into a for-profit company owned by the three chains that are now its biggest members.
CP is striking the deal as it is reeling under a massive pension obligation and the desertion of some big chains, including Sun Media’s newspapers just last week.
Under the plan, detailed by several Canadian dailies, CP would be owned by its CTVglobemedia, publisher of The Globe and Mail; Torstar Corp. publisher of Canada’s largest daily, The Toronto Star; and Gesca, which owns La Presse in Montreal.
The three chains would be equal partners in the for-profit company to be called Canadian Press Enterprises.
Last year, CP won federal permission to delay some pension payments for its plans, which were running a $34.4 million deficit, CP’s director of human resources, Paul Woods, said in an memo to employees reported Sunday by the Globe and Mail.
In addition, CP suffered from the defections of two big news organizations. In 2007, CanWest Global Communications Corp. dropped out of the co-op, and last week Sun Media Corp., which has formed its own news service, QMI Agency, formally left CP after giving notice in 2009.
The proposed new owners have been talking with the union representing CP employees since May. In a memo to members published by QMI Agency, the union said it needed more information on their plans.
“Up to this point, all we have been told is that they have offered up to $7 million in new investment over the next few years, if the Canadian Press can prove it needs the money for projects it wants to get going to generate a profit,” the memo said. “We have been presented with no guarantees of stability for the pension plans, employees or the structure and purpose of The Canadian Press.
“Presumably, the investors (Torstar, Gesca and CTVglobemedia) would retain the right to walk away at any point in the future if we refused to give them new compensation concessions or meet other demands. This would offer no stability to employees, the pension plans or the institution of our 100-year-old news service.”