The Hall of Shame
Even Paul Godfrey seemed surprised when he was installed in Canada's News Hall of Fame this week.
"I was quite surprised," he said in his acceptance speech. "I'm not a journalist, I don't pretend to be a journalist."
The man should not be surprised about another development, though -- the negative reaction his "honour" is receiving among many journalists. As CEO of Postmedia Network Canada Corp., the country’s largest newspaper chain, he probably employs more journalists than anyone else in Canadaian history. But he has also laid off more journalists and newpaper workers than anyone else -- 2,500 since 2010, according to the latest estimate.
Godfrey at least acknowledged that it's unusual for a publisher to be honoured for anything these days. "When you're the CEO of a company, you always have to do certain things which, on the surface, look very unpopular in the eyes of a lot of people but are necessary to keep the business going in the right direction."
More about that later.
While many journalists see his enshrinement alongside journalism royalty like Pierre Berton, Peter Gzowski and William Lyon Mackenzie as a cruel joke, the same might be said of the Canadian News Hall of Fame.
As a recent article in Canadaland says, it has "no hall, no wall, and many people in it are not that famous."
(Full disclosure: I was part of a group of concerned journalists who in recent years tried to nudge organizers to legitimatize the hall and allow public access. They hadn't installed anyone between 2002 and 2011 and the plaques were stored away in a basement. We were rebuffed, but at least they are inducting people again ... albeit under rather suspicious circumstances).
Case in point: Godfrey's induction ceremony was sponsored by both Postmedia and RioCan, the real estate investment company Godfrey chairs. The induction last year of Torstar chairman John Honderich was sponsored by ... you guessed right ...Torstar.
The Hall of Fame is maintained by the Toronto Press Club, which doesn't exist either except in name. Once a bustling downtown watering hole for the city's media elite, the club today has only a handful of members and is being run out of president Ed Patrick`s apartment. In fact, he uses his address as the destination for nominations to the Hall of Fame. It`s unclear just how Godfrey was selected; the annual gala to induct new members is a way to raise money and is virtually the press club`s only raison d'ètre.
But let`s get back to Godfrey, and what he`s done for journalism.
When Postmedia’s $316-million purchase of 175 Sun Media Corp. newspapers from Quebecor Inc. was proposed last year, it raised concerns about media concentration in Calgary, Edmonton and Ottawa, where Postmedia would own both major dailies.
When the merger was approved by federal regulators in March, Godfrey said that probably wouldn't have happened 10 years ago: “It likely would have caused a heated debate in the House of Commons, probably resulting in another Royal Commission into the newspaper industry.”
But he said times have changed. “The reality is that the competition in Canadian newspapers isn’t against newspapers any longer,” Godfrey said. “It’s against all news media, especially — and most threateningly — huge foreign-based digital companies, unchallenged Goliaths like Google.”
The addition of Sun Media, he said, will provide Postmedia with the scale and scope to compete with the behemoths.
That's what he said in March. This month, however, Postmedia was publicly celebrating its collaboration with Google, which selected it as a "Canadian AdWords Premier SMB Partner." Far from being a competitor, Postmedia is allowing Google to market its expertise to businesses that want to create online advertising campaigns.
So what is the "right direction" for Canada`s largest newspaper chain -- competing with the big boys, or trimming its sails to weather the storm?
Under Godfrey, it seems the latter. He, after all, was instrumental in rescuing Postmedia from the wreckage that its previous owner, CanWest, left when it went bankrupt in 2010. He put together a successful offer with the backing of one of the company’s biggest bondholders, New York-based hedge fund GoldenTree Asset Management. The group bought Canwest’s publishing assets for $1.1 billion, a deal that left it $700 million in debt.
It was like turning the blood bank over to Dracula. Hedge funds don't love newspapers. They love money.
Postmedia’s debt to its American lenders has caused it to cut costs faster than other Canadian newspapers. An estimated $300 million has been siphoned out of Postmedia since 2010 to pay interest on bonds with rates between 8.25 per cent and 13.3 per cent, according to the Globe and Mail.
Despite continuing job cuts, Postmedia has never earned any net profit. Combined losses since 2010 amount to $624 million. Revenues have plunged 25 percent in just three years. Yet Godfrey receives $1.76 million in annual compensation and his contract was recently extended until the end of 2018.
Despite continuing job cuts, Postmedia has never earned any net profit. Combined losses since 2010 amount to $624 million. Revenues have plunged 25 percent in just three years. Yet Godfrey receives $1.76 million in annual compensation and his contract was recently extended until the end of 2018.
He likes to say quite often: "My mother said to me when I was quite young: ‘When you have your choice in life between smart and lucky, take lucky all the time.’”
That was true in 1984, when Douglas Creighton, publisher of the Toronto Sun tabloid, asked Godfrey to leave politics to help run the newspaper he'd founded in 1971. Godfrey jumped, in part because his wife told him ‘We can’t live on what you make as a politician.’”
He quickly climbed the corporate ranks, becoming president and chief operating officer of Toronto Sun Publishing Group in 1991. The next November, the board of directors removed Creighton as chief executive a year before he planned to retire and installed Godfrey in his place. By 1999, Godfrey led a management buyout of the Sun’s newspaper assets and arranged its sale to Quebecor. The deal put an estimated $28 million into Godfrey’s pocket.
Good luck followed him when he left Sun Media and landed at Rogers, orchestrating the purchase of the Toronto Blue Jays and pulling off one of Toronto's all-time great real estate deals -- the purchase of SkyDome for $25 million, a fraction of its $600 million construction cost.
Under Godfrey, a long-time supporter of the federal Conservative party, Postmedia has been pilloried both for its bottom-line thinking and its political bias. In the run-up to this fall's federal election, 16 of the chain`s major daily newspapers were ordered to run editorials endorsing Stephen Harper. They also sold their front pages to run yellow ads from the Conservative party warning voters of the cost of voting Liberal.
Shortly before he died, Douglas Creighton reflected bitterly on the kinds of businesses that a new generation of newspaper proprietors (like Godfrey) were running. "It's a Wizard of Oz world," he said. "With no brains, no heart and no courage."
Actually, all this has made me change my mind about the Canadian News Hall of Fame. Don't touch it. Just leave it as it is.
I don't ever want the public seeing Godfrey's plaque on a wall for being a good newspaper man.