Tuesday, August 14, 2007

Cabinet shuffle...

Probably my little break has killed off the last of my readership, but who knows?
This is my last day as a full-time freelancer. As of Wednesday, I'm on the full-time faculty of Concordia University's School of Journalism and Communications, where I'll be teaching reporting, media history and criticism.
I'll still be contributing editor of Ottawa magazine, partly because I love them, partly because they pay well, and partly because I want to keep one hand in the media that I'm teaching about.
I'm also hard at work writing the first English-language book on Canada's wartime press censorship system.

The business side of things being taken care of, here's my take on the cabinet shuffle:

Harper's put the last dagger into Peter McKay. There are no votes in Defence in Nova Scotia. And being put in charge of an unpopular war is hardly the way to have one's leadership lamp burnished. McKay will either be consumed by events or by Rick Hillier, the CDS. Either way, he's done. There will be no minister lurking, like Paul Martin under Chretien, in the leadership wings. There is also no second-tier, no John Manley, no Allan Rock. In Diane Ablonczy, however, Harper has found his Sheila Copps.

The second message: Harper may be a policy wonk, but he doesn't care whether his senior ministers develop mastery over their portfolios. Harper has shuffled several ministers who, like Prentice and Strahl, know their departments very well and were doing a good job with important files. No matter. They're moved, and someone else will have to learn the ropes.

Other than that, the exercise is a non-starter that will be forgotten in a few days and will have no impact on the polls.


This is, by far, the bigger story. The tightening of credit is about to shake the Canadian economy -- and Canadian journalism -- to its core.
Remember this, folks: there are only a handful of Canadian media companies that are not over-leveraged and saddled with crippling levels of sub-prime debt. TorStar and the Halifax Herald are OK. GlobeMedia, with Thomson's deep pockets, will also make it, though it will be dismantled into its constituent parts. CanWest survives on junk bonds. (Let's see if the Alliance-Atlantis/CanWest deal closes, as scheduled, tomorrow.) My bet: CanWest will be liquidated, its papers and TV assets sold off at below debt value. Quebecor is also over-leveraged and its media properties are, in the main, garbage. It, too, will be broken up. Ted Rogers once said that he doesn't worry about his debt, his bankers do. Well, everyone's worried now. "Convergence" is over, and a lot of media people are in very big trouble.

This problem will be spread through Canadian business. How heavily leveraged is Onex? Magna? CP? Will the Alcan deal go through? What about the dozens of other major deals built on the back of easy money? Leveraged buy-out and asset stripping is a pyramid scheme. No one can keep it going forever. Ask Conrad Black.

4 comments:

Sotay said...

Je trouve la fin de votre commentaire sur le "shuffle" encourageant. Je n'en peux vraiment plus de la réalité médiatique, à savoir le cercle vicieux de la manière de faire, basé sur l'$ et rien d'autre. Le but est d'être rentable, point. Et à n'importe quel prix. On publie ce qui se vend le plus, en locurrence du Journal de Montréal et cie, nivellant par le bas en publiant toute sorte de médiocrité pour amuser et divertir le peuple, qui, malheureusement en redemande.

Si cette manière de faire peut éclater en milles morceaux, j'en serai la première ravie.

Ottawa Watch said...

I doubt it will even distract or amuse people. Most just don't care about this government. You're right in saying it's just media that keeps it moving. In Ontario, we're heading into an election. In Quebec, the political party system is undergoing big changes.

Anonymous said...

A short term credit crunch would spell immediate disaster. If you have troubles with bonds, you scale back your capital projects. You have trouble in commercial paper, you don't meet your payrolls.

Great analysis of a potentially very serious issue that should have everyone worried!

j said...

...rather ominous. I just can't imagine CanWest or Quebecor getting rid of their newspapers in the foreseeable future. Quebecor just bought Osprey and CanWest's dailies (aside from the Post) dominate their markets.