Just days after the Conservative government said they wouldn’t give CBC any additional funds this year, Heritage Minister James Moore made it known that his party is looking at bailing out Canwest.
It’s been reported that the government could loosen regulations — Canwest wants a carriage fee charged to cable operators, which could net them $150 million a year — or develop a less restricted tax regime in order to help the flailing media company.
If Ottawa wants to save the company they need to act fast; the media conglomerate has to pay its bank millions of dollars on April 7.
The rescue of Canwest is interesting for so many reasons. For one, traditional media — TV, radio, newspaper — is in a state of flux right now. Major changes are on the way thanks to the internet, so it’s likely more and more media giants will be facing financial troubles in the coming years. (Assuming they don’t figure out how to make boatloads of money in whatever new model takes shape.)
So, will the government be forced to rescue every cash strapped media company? (They have said they want to help out private broadcasters in general, but Canwest is the immediate priority.)
And, even if they have the money to give out, should they? It appears the Conservatives’ main motivation for helping private broadcasters is the threat that local, small-market news will be cut. The Asper’s already put five smaller stations up for sale, and two days ago CTV announced that they wouldn’t run local news spots during Canada AM anymore. If more local news is shuttered, constituents will get angry and votes will be at risk.
There’s no doubt that the conventional, or over-the-air, TV model is in trouble, but is it the government’s place to prop up a company that’s made some very questionable business decisions over the last few years? (The New Republic anyone?)
It’s the same argument against rescuing GM — should a company be saved from itself? It would be terrible if the company went bankrupt, or if they sold off or folded assets such as the National Post, but where does the government draw the line?
3 Responses to “ Conservatives helping Canwest? ”
It would really be a shame if CanWest went under but at the same time the government has already deregulated the industry so much that there aren’t a plethora of voices anymore anyway. 10 years ago there were many different media companies, now there are 4 (CanWest, Quebecor, CTVGlobeMedia and Torstar). What’s even more ridiculous is that Torstar has a stake in their main competition, The Globe and Mail. If that isn’t hurting local news, then I don’t see how CTV cutting morning news and the potential CanWest destruction will.
By David on Mar 19, 2009
If you look at the example set in Japan over the past two decades, bailouts don’t work. As difficult as the losses seem should a company like GM or CanWest go under, and undoubtedly the economic fallout would have an exponential impact, I think it’s just prolonging the inevitable.
By Ames on Mar 20, 2009