The slow and painful death of newspapers

By Ian Connerty, guest columnist

In the six months ending Sept 30 2009 circulation of daily newspapers in the U.S. fell another 10% compared to one year ago. This comes on top of a 5% drop last year.

The biggest losers were the Dallas Morning News, the San Francisco Chronicle and the Newark Star Ledger which all had declines in paid circulation of more than 20% in just six months.

The Los Angeles Times dropped 11% and the Chicago Tribune was down 9 percent. Even the New York Times lost 7% of its readers. The only US daily with a slight increase was the Wall Street Journal which was up by 0.6%.

Canadian media is also feeling the pinch. Recently we witnessed the sad demise of the now bankrupt $4 Billion CanWest newspaper and TV chain and the closure of local affiliate TV stations.

This loss of readers and viewers is a problem for the mass media because advertisers look at paid circulation and viewer numbers to decide if, and how much they will spend with these media outlets over the next six months.

As a result of these reduced numbers, advertising revenues will now be down for most U.S. newspapers over the next six months and they will have to lay off more staff, further reducing the quality of their product.

And then they will lose more readers, and then they will lose more advertisers, in an endless cycle.

There is no end in sight to the bleeding.

Sell your media stocks now, if you still own any. Take your loses now, because the future will be more of the same.

This problem for the media is not just as sign of the global recession that is hitting newspapers and network TV hard, it’s because of the new competition – free news and commentary on the internet that has become a daily experience for former subscribers.

As for future customers - young people. They don’t even read newspapers – never have. They grew up on TV “Info-tainment news” and have now graduated to internet chat rooms.

The future is here on the Internet on blogs like this, and you are the proof that they work.

Informed commentary has been dropped by many mass media outlets in order to save money in their downward spiral and that is what the Internet is all about, as well as some real news, if you know where to find it.

OPSEU gets ready to fight “Dalton Days”

By Ian Connerty, guest columnist

The 115,000 member Ontario Public Service Employees Union is getting ready to fight the McGuinty government if it tries to make up some of its $25 billion deficit by laying off OPSEU members or forcing them to take unpaid days off.

“We are already planning a bold strategy to fight the coming attack,” said Warren ‘Smokey’ Thomas in a letter to all OSPEU members. “The Liberals’ plan is to make us pay. Premier Dalton McGuinty would not rule out unpaid days off for the million Ontarians who earn their bread in the provincial public sector. And the spectre of privatization now looms over every public service worker,” he continued.

This came in response to Premier McGuinty saying last week that he has not ruled out forcing Ontario Public Servants to take days off without pay and other suggestions that the government might look to privatize some of the work it does now.

Given that 80% of the $113 Billion provincial budget is spent on salaries, the Premier may have to embark on the biggest political fight of his life - against his own employees.

OPSEU responded; “As for more layoffs, they can only weaken local economies, destroy the services people need, and generate headlines the Liberals really don’t want to see.”

OPSEU has concluded that the Premier’s plan is to threaten layoffs and privatization of public service jobs to “force public employees to agree to the wage cuts or “Dalton Days” he wants.”

However, according to OPSEU such an arrangement, that was called “The Social Contract” by the Bob Rae government back in the 1990s when they forced OPSEU to take unpaid days off, would be struck down by the courts today.

They cite the case of BC Premier Gordon Campbell who attempted, in 2007, to legislate an end to collective agreements of BC health workers. The Supreme Court of Canada ruled against BC and as far as OPSEU is concerned, “collective bargaining has been recognized as a protected right under the Canadian Charter of Rights and Freedoms.”

Ouch.

Watch out Dalton, OPSEU will take you to the Supreme Court if you try this. And remember what happened to Bob Rae. He ended up being humiliated and took the NDP to a third place finish in the next election after he instituted his infamous “Rae Days.”

Mr McGuinty looks poised to go down the same road as Mr. Rae in order to cut government spending. If he does, he risks facing the same result as Mr. Rae at the next election.

Ontario economy hits the wall

By Ian Connerty, guest columnist

Back in April 2008 the Ontario government projected a balanced budget and a surplus of $800 million.

Eighteen months later, Ontario Treasurer Dwight Duncan says the provincial deficit will be almost $25 billion this year and the accumulated deficits over the next three years will total $65 billion.

Wow. What a difference 18 months can make.

One the major bond rating agencies, DBRS was quick to react to the news, lowering the province’s bond rating from AAA to AA, a move which will increase the cost of borrowing money to finance the deficit.

DBRS also said it will take at least a decade for the province to reduce its debt burden to a more manageable level without tax increases or sharp cuts in government spending.

This huge downturn is the result of the global recession which hit Ontario’s economy and especially its auto sector very hard. More than 200,000 jobs were lost in Ontario this year including 25% of all jobs in the auto sector - gone and not likely to return.

At the same time, because of business loses and closures, corporate tax revenues have dropped by almost $6 billion, a whopping 48% less than last year. Other tax revenues are also down.

But government spending continues to grow. Spending is up almost $5 billion to $113 billion, mainly on health and education which account for more than 65% of all government spending.

Another $32 billion has been allocated for infrastructure projects to create short term jobs to replace the ones that have disappeared.

Treasurer Duncan indicated that cuts in spending are coming, but not right away. So far, cuts have been put off in favour of three years of continued deficit spending. But that might not be possible if the economy remains in free fall.

Mr Duncan announced a review of all government spending and Premier McGuinty has not ruled out forcing public servants to take days off without pay, a move that is being compared to the infamous “Rae Days” which led to the downfall of Ontario’s only NDP government back in the 1990s.

Given that 80% of all provincial government spending is on salaries, the government may have no other choice. Either lay people off or cut back their salaries with forced days off.

The options facing the government are very limited – keep spending and borrowing, cut program spending or raise taxes. Two out of these three will be very unpopular with voters in the run up the next provincial election slated for October 2011.

Premier McGuinty, who is nearing the end of his second majority government mandate is facing the biggest political challenge of his career and is obviously hoping for a miraculous economic recovery before the next election.

New Ontario law will protect Caregivers

By Ian Connerty, guest columnist

In the wake of the widely reported “nanny-gate” affair which saw Federal Liberal MP Ruby Dhalla get in trouble over the caregivers she hired to help her mother, the Ontario government has introduced legislation to protect the rights of the 21,000 people across the province who are part of the federal Live-In Caregiver Program.

The need for this legislation has long been promoted by Liberal backbencher and former Citizenship and Immigration Minister Mike Colle. He succeeded in convincing Premier McGuinty to go ahead with the new law, giving hope to backbenchers who are promoting other issues.

The new law will protect foreign nationals who are live-in caregivers by:

• Prohibiting recruiters from charging fees to these employees;
• Prohibiting recruitment fees or fees for related services, such as resume writing;
• Preventing employers from recovering recruitment and placement costs from caregivers;
• Prohibiting employers and recruiters from taking possession of a caregiver's personal documents, such as passports and work permits; and
• Allowing live-in caregivers up to three and a half years to make a complaint - an increase from the current two year period under the Employment Standards Act.

Obama reaches out to Russia but abandons Eastern Europe

By Ian Connerty, guest columnist

This week US President Barack Obama sent Vice President Joe Biden on a whirlwind tour of Eastern Europe to do some serious damage control.

Biden will meet with political leaders in Poland, the Czech Republic and Romania in a vain attempt to reassure them that the US will continue to protect them against a newly emboldened Russian Bear.

This follows an earlier trip by Biden to Ukraine and Georgia who are also nervous that Russia is ending its long hibernation that began when the Berlin Wall famously came down in November 1989 heralding the break up of the USSR.

Since then the United States has expanded its influence in these former USSR satellite states, while Russia was licking its wounds and very nearly went bankrupt.

Former President George W. Bush developed strong ties with all of the former satellite states by, among other things, promoting NATO membership for Ukraine and Georgia. Then came the ill-fated hostilities in Georgia last year backed by the US. Russia quickly moved its armed forces into Georgia and told the US in no uncertain terms to get out of their home turf. Bush backed down and Russia is now re-exerting its influence on neighbouring states.

President Obama has reversed Bush’s policies of confronting Russia and is trying to improve relations with the former Superpower.

Last June Obama went to Moscow to cement the new relationship by agreeing to cancel the Missile Defence system that Bush promised to Eastern Europe. Bush said the system was needed to aim missiles at a hostile Iran. Russia did not agree and felt that Moscow was dangerously in range of the proposed missiles in Poland and the Czech Republic.

Not surprisingly, the day after Obama cancelled the proposed missile defence system, Russia said they would help the US in dealing with Iran.

That was the deal. A chance for peace in the Middle East now and put Eastern Europe on the back burner. As a result, Eastern European countries that until very recently enjoyed US support in standing up Russia, quite rightly feel betrayed.

Today Russia is no longer the economic basket case it was in 1989. It is piling up huge profits from oil and gas resources thanks to a National Energy Program put in place by Prime Minister Vladimir Putin.

And Mr Putin found some very eager customers for his natural gas reserves in Western Europe not Eastern Europe, notably Germany, France and Italy. In fact, Germany is a financial partner in a new pipeline that will deliver Russian gas under the Baltic Sea directly to Germany, bypassing Poland.

Therefore, it’s not surprising that Germany, France and Italy don’t seem to care that much about Eastern Europe and their new concerns about Russia. They want Russian gas and are prepared to treat Russia as an ally in order to get that gas.

As a result, the newly emancipated Eastern European countries will to be left on their own, once again, to deal with the Russian Bear.

And we all know what happened the last time the Bear got hungry – Eastern Europe became a tasty morsel to be swallowed up. This time President Obama has offered them up on a platter as he tries to play nice with his new found friend Vladimir Putin.

Ian Connerty - Special Guest Columnist

A very dear associate of mine, Ian Connerty will be writing for Fair Play Blog over the next week or two. Ian is very talented, very thoughtful and very articulate. I know you will enjoy reading his opinions.

Thanks very much for doing this Ian.

Remo

What to do with Enemy Combatants and Terrorists?

The U.S. President, Barack Obama has made it clear that the Guantanamo Bay prison now holding enemy combatants captured on the battle field will be closed. What is to happen with these people, some of whom are terrorist masterminds and very very dangerous.

In a very well written piece just published in the Wall Street Journal, former United States Attorney General Michael B. Mukasey challenges us to think about what to do with enemy combatants and terrorists.

This is a lengthy article, but I strongly encourage you to take the time to read it.

OPINION OCTOBER 18, 2009

Civilian Courts Are No Place to Try Terrorists 

We tried the first World Trade Center bombers in civilian courts. In return we got 9/11 and the murder of nearly 3,000 innocents.

By MICHAEL B. MUKASEY
The Obama administration has said it intends to try several of the prisoners now detained at Guantanamo Bay in civilian courts in this country. This would include Khalid Sheikh Mohammed, the mastermind of the Sept. 11, 2001 terrorist attacks, and other detainees allegedly involved. The Justice Department claims that our courts are well suited to the task.

Based on my experience trying such cases, and what I saw as attorney general, they aren't. That is not to say that civilian courts cannot ever handle terrorist prosecutions, but rather that their role in a war on terror—to use an unfashionably harsh phrase—should be, as the term "war" would suggest, a supporting and not a principal role.

To continue please click here.

Ontario Budget Update Next Week

The "Great Recession" continues to make budgets and deficits major political problems for all governments. The Ontario government will provide its fall economic update next week. Finance Minister Dwight Duncan has his hands full dealing with expenditures as a result of falling corporate tax revenues, 48% last year. Boy that is a big number.

The 2009-2010 deficit was projected to be around 14 billion. This past June the number shot up to $18.5 billion. We will see how big the number is next week.

The Ontario Liberal government cannot be fully blamed for this, but politics is unfair, so they will get plenty of blame. Minister Duncan, who is a smart political operative will have to use all his skill to navigate around the scary size of the deficit and then figure out how to get things back under control.

I cannot predict what Duncan will do, but it will be interesting.

Update on Bankruptcy Protection for Owners of the Windsor Star

CanWest Global Communications Corporation, the large media company and owners of the Windsor Star is moving quickly to restructure. The company filed for protection under the Companies' Creditors Arrangement Act (CCAA) in the past week or so.  I thought for sure we would have seen a feature story on this on the front page of the Star, but I couldn't find it.

CanWest's lawyer, Lyndon Barnes, was before an Ontario judge on Tuesday October 13/09 asking for a very tight time line to restructure the company. He was also there to fight with lawyers representing Goldman Sachs whose lawyers have claimed their interests are not being protected. This fight is just starting, my bet is that Goldman will play hardball with CanWest. I think they see an opportunity here.

The big problem with CanWest is debt and more debt. Most of the huge debt piled on by CanWest came from the $3.5-billion purchase in 2000 of the Hollinger Inc. newspaper chain, and later the $2.3-billion buyout of Alliance Atlantis Communications Inc. in 2007.

There are very few ways to get rid of debt. You can pay it off. CanWest cannot do that. Everybody takes a haircut. Which is what CanWest would like, but people like Goldman don't like. Or the company is sold off in pieces and creditors agree on how to divide up the spoils.

Anyway this is all very interesting, I will try to keep you up to date.

The "Nobel" Prize

Given all the controversy over U.S. President Barack Obama being awarded the Nobel Peace Prize, I thought my readers might like to have some independent information about the person who created the Nobel prizes.

I found a short but good piece in an online Swedish paper called "The Local".

Alfred Nobel's last will and testament
Published: 5 Oct 09 11:32 CET

Swedish inventor and scholar Alfred Nobel created the Nobel prizes in his will, written in 1895, bequeathing his fortune to a fund that would honour "those who, during the preceding year, shall have conferred the greatest benefit on mankind."

 Click here to read the rest.

Very Thin Skin Over at the Windsor Star

I had to chuckle, not very loudly of course, but chuckle I did.

In the Saturday, October 10, 2009 edition of the Windsor Star, feature opinion writer Chris Vander Doelen (whom I confess to knowing and liking) did a piece about the City of Windsor and County of Essex, doing some "fence mending". The story had little to do with the City-County feud or with any real fence mending. It was just a cover for the Windsor Star to slip in another piece on the Windsor Essex Development Commission (WEDC) and, of course, to take a shot at yours truly, and the previous WEDC Baord. Readers of my blog know I pull no punches when talking about the failures and antics over at the Windsor Star, especially this past week. Star management was very quick to show some very thin skin.

Back to the details of the Vander Doelen story. Chris always tries to be polite and careful, which he was in this article. But he did give this story a certain slant. That is okay; I have always said that is one of the perks given to an opinion writer. But what I don't understand is, why do it under some kind of false cover? Hey, just say what you have to say.

Okay, let me see if I can summarize Vander Doelen's main points:

• the previous Board was paid an honorarium
• when the WEDC was left without a CEO, the Board appointed me via my company
• I was paid $1200 a day (Chris claims this is my standard rate)
• the previous Board received bad legal advice
• the result of the bad legal advice was that some monies had to be donated to charities to resolve a Revenue Canada issue
• and new Board Chairman Lindsay Boyd, with a big sigh, just doesn't know where and how the old Board went wrong

Let me deal with Lindsay Boyd first. Lindsay, the entire previous Board is aware that you pretended to support us when you talked to me, but often ran to City Hall to slam us behind our backs. Every time you did this, my phone rang from multiple sources. Anyway, I wish you and the new Board lots of luck. I don't think any of the previous Board members will be slamming you and the new Board in public or behind your back.

Yes, the previous Board received an honorarium, just like the Board at the Windsor Airport and the Board over at the County of Essex Power Corporation. I wonder, who is the Chair of that Essex Power Corpoaration? The City and County, via their own transition Board, approved the policy of honorariums for the WEDC Board. Chris forgot to mention that.

Yes, I was paid $1200 a day plus reasonable expenses. Chris, just so you know, this is far below my private sector market rate. And in the private sector when I negotiate rates, I usually, not always, get stock options as well. And, oh Chris, I know you would want to know that I and my company donated 2 days per week to the Commission for a period of 18 months. This was a promise I made to the Board, which I kept in full. I will let the wizards at the Windsor Star calculate what all of that was worth, and while they are at it, they might want to consider a factor for lost opportunity and add that to the calculation.

Chris, please let me know when any of the new WEDC Board members decides to forgo 2 days per week of pay or income for a period of 18 months to support the WEDC effort. I am not a rich man, but I was happy to be able to do it. I thought the cause was worth it.

Chris makes no mention of the fact that the previous Board inherited an operational and legal mess. We did not make a big deal about it because we knew our job was to fix it up, and for the most part we did just that. The previous Board was very competent, did a good job, and got a lot done. Those are the facts.

Yes, maybe we did receive bad legal advice; I don't know as I don't have access to what the new Board is dealing with.

If the consequences of the so-called bad legal advice is that some Windsor-Essex charities received donations, well I accept full responsiblity for that, and I know the charities will use the money wisely.

In closing may I recommend:

• that all Board meeting packages, initiatives, and documents of the previous Board be made public. Please black out the names of any and all clients, as we promised clients their names would not be made public unless they chose to do so;
• make public all Board packages, initiatives and documents of the new Board since March 2009;
• and please make public the Board orientation packages prepared for the new Board, which I am sure were prepared under the guidance of new Board Chair Lindsay Boyd, so we can get an appreciation of his knowledge, skillset, and leadership style;
• oh, and please make public all the advertising and joint initiatives the previous Board undertook in partnership with the Windsor Star. From my understanding Star management was exceptionally pleased with our joint effort. And if the Star made some money on those joint efforts, that is good, too.

I am sure an objective comparison of all the obove documents would be interesting. And you know, there is no better person to do that than Chris Vander Doelan.

Again, my readers will know that I have pulled no punches when talking about the Windsor Star. A couple of close Amherstburg friends have asked me if I am worried the Star might go after me. Let me say this: I know the Star has a lot of resources, including Chris Vander Doelen, and yes I expect them to go after me. The Star folks are not used to real scrutiny, and when they get some, they react poorly. Everyone should know that I really appreciate the Star folks visiting my Fair Play Blog daily. Thanks for the support.

And I say to my Amherstburg friends, no, I am not worried about it.

Happy Thanksgiving

Enjoy Canadian Thanksgiving weekend, be safe, see you next Tuesday.

The End for Canwest Global?

CanWest Global Communications Corporation, owners of the Windsor Star, filed for bankruptcy protection on Tuesday October 6, 2009. This was expected, as the company is under a mountain of debt.

The Globe and Mail did an excellent piece; read below.

CanWest assets likely to be sold after company files for creditor protection
Struggling under $4-billion in debt,
media company strikes deal with creditors

Grant Robertson, Tavia Grant and Andrew Willis
Tuesday, Oct. 06, 2009

CanWest Global Communications Corp.'s (CGS.A-T0.19----%) television and newspaper assets will likely be sold separately as Canada's biggest media company moves to satisfy its lenders.

Buried under billions in debt, CanWest filed for bankruptcy protection Tuesday, telling a judge in Toronto it was now insolvent.

Click here for the entire story.

Ontario Health Minister Forced to Resign Over "eHealth" Scandal

As my readers will know, I have been writing about the problems over at eHealth for some time. This is the organization that is supposed to put all medical records in electronic form for easy use. Once this is done it should lower the cost of health care management and make it easier for practitioners to deliver service to the patients. So, in theory, eHealth is a good thing and should be worth the money.

However, the implementation of  the work being done over at eHealth is another matter altogether. It has run into lots of problems and has emerged as a major scandal. In political terms the scandal has given the Ontario Progressive Conservative party a big boost in their chances in the next provincial election. Because of this scandal, its size, the fact that it deals with health care, and the amount of attention it has received, all future criticisms of the McGuinty government will be taken more seriously. This may not be fair, but that is politics.

The following is the big story in the Toronto Star today.

eHealth scandal claims health minister

Premier scrambles to shuffle cabinet as David Caplan quits on eve of damning report on eHealth scandal


Published On Wed Oct 7 2009

The eHealth Ontario spending scandal has claimed one of the most powerful people at Queen's Park – Health Minister David Caplan, whose resignation forces Premier Dalton McGuinty to revamp his cabinet.

But McGuinty has one hand tied behind his back as he struggles to reshape his embattled Liberal government because Deputy Premier George Smitherman, who is planning to run for Toronto mayor next year, does not want to quit his energy and infrastructure post just yet.

"Things are chaotic," an insider said as worried Liberal MPPs held a late-night conference call to demand answers about the confusion at the highest levels of the provincial government.

To read the entire story click here.

Windsor Star - Poor Attempt to Apologize

Yesterday I wrote about the awful reporting featured in Saturday's October 3, 2009 edition of the Windsor Star, our daily regional paper. Anyone who takes the time to read the statistics will know this paper has monopoly-like control over the news given to our residents.

In my post of yesterday, I pointed out several blatant errors in the story written by famous reporter and super snooper Dave Battagello. He also gave the story a special tilt, just for good measure. Normally I wouldn't bother to comment at such length, but snoop was over the top. Battagello weaved a fairytale about a hoard of senior city employees being forced out of city employment. He pointed the finger at Mayor Francis.

The story was so bad, his list even included people who were not city employees, and some who were not forced out.

Assistant chief honcho Marty Beneteau should have done the right thing. We all make mistakes, and I am being kind here to Battagello: a real apology, retraction and correction was in order. But what do we get from our near monopoly news source?

It appears as if opinion writer Chris Vander Doelen (I confess to knowing and liking Chris) was dispatched to do some damage control. In today's October 6, 2009 edition, Vander Doelen calls the Battagello list "padded" and gives an example or two, or maybe seven, of some folks who were not forced out but left for various reasons. He also tries to give some balance to the Battagello fairytale. But you know, a fairytale is a fairytale.

I thank Chris for his efforts. But this looks like a poor attempt by Windsor Star management at an apology, retraction and correction. What a way to run a ship.

I repeat what I said yesterday: the Windsor Star is the most negative and harmful institution we have in our entire region.