I’m not a big fan of Conrad Black’s.
In 2012, after Random House published my book about larceny in the business sector, Thieves of Bay Street, he launched a $3-million lawsuit against myself, Random House and its editors claiming defamation. Random House has spent a lot of money defending itself - cash which they could have used for far better purposes (fortunately the lawsuit has never gone anywhere).
In other words, there’s not much Conrad Black and I agree on. But it appears we have some common ground on one thing: what’s been happening to Postmedia Network Canada Corp., Canada’s largest newspaper chain – a chain Black once owned and where he remains one of its star columnists.
This past July, in a conference call with Bay Street analysts discussing Postmedia’s financial situation, Black took the unusual step of intervening and publicly airing his grievances with the company’s direction. At one point he beseeched Postmedia’s CEO, Paul Godfrey, to “please build the quality. Otherwise you are going to retreat right into your own end zone.”
Black’s lament comes to mind when reading Terence Corcoran’s three-page spread in Saturday’s National Post attacking critics of Postmedia. It’s an assault directed at Torstar and its chairman, John Honderich, who publish Canada’s largest daily, The Toronto Star, as well as myself and the National Observer for our investigation into Postmedia, which was published in November before being reprinted in the Star.
It’s true that the Observer, Honderich and Star have been saying unkind things about Postmedia. Yet Corcoran frames the criticism as corporate gamesmanship between rival newspaper chains (Postmedia vs. Torstar) as they fight over the remaining assets of their dying business. But he also frames it in ideological terms – it’s that dastardly left attacking Postmedia because we don’t like its politics.
Which gets me back to Conrad Black. If this was merely the usual left-wing pundits fulminating about Postmedia, then Corcoran might have a point. But the reality is that a lot of people are questioning the company’s direction.
Such as Ken Whyte, the founding editor of the National Post and Corcoran’s former boss. When I spoke to Whyte last fall, he clearly disagreed with Postmedia’s decision to force all of its daily newspapers to endorse the Tories prior to October’s election. He said Postmedia's newspapers, which service such a diverse audience across such a diverse country, need to tread carefully in imposing their views. “They've chosen to go in the other direction and I think that's a real cause for concern,” Whyte said to me. “Not so much because they're going to sway a lot of voters, but because I think that kind of direction will affect how the newspapers go about their day-to-day handling of stories and opinion... I think it's fair to ask if it's a good business decision. You might alienate a good part of your audience.”
And then there is the matter of Andrew Coyne, whose resignation as editorial page editor of the National Post on the eve of the election Corcoran fails to mention at all. Coyne quit his post in protest after being censored by Postmedia’s management: he was told he could not publish a column dissenting with the paper's endorsement of the Tories.
By omitting the fact that people from different political persuasions are dismayed at what’s been happening to a newspaper chain that reaches 6.3 million readers every day, Corcoran is disingenuous. Instead, he points his guns solely at Torstar and the National Observer.
Corcoran as polemicist
This is the sort of squalid behavior Corcoran is famous for. If anyone was going to take on the PR role of attacking Postmedia’s critics, Corcoran is your man. Corcoran has been a mainstay as a columnist on the business pages of the Financial Post and the Globe and Mail since the late ‘80s. He joined the National Post in 1998 and oversees the Financial Post's comments pages, where he writes a column four times a week.
Corcoran is not a journalist; he’s a polemicist who embraces an appalling Ayn Randian worldview – where government regulators, unions, NGOs and political and social movements have no business interfering in free markets.
Corcoran, for example, detests the idea of regulation of the financial industry. Even though Canada is one of only two members of the International Organization of Securities Commissions (IOSCO) which doesn't have a national regulatory agency for its capital markets, Corcoran thinks this paucity of oversight is fantastic. He railed against the Harper government’s efforts to set up a national regulatory body, as he’s railed for decades against the Ontario Securities Commission (OSC) and its attempts to bring some justice to the most corrupt sector of the economy. To guys like Corcoran, the 2008-’09 credit crisis, which most scholars blame on the systematic removal of regulation during the 1980s and ‘90s, is a calamity not worth discussing.
And then there is his bizarre belief that climate change is all hogwash. For 25 years he’s devoted yards of columns to the subject, promoting his views that it’s all an unholy plot cooked up by corrupt scientists and addled-brained environmentalists.
It’s no accident that Corcoran is given the leeway to express such views in the pages of one of Canada’s most important business newspapers. After all, for many in the business community, climate change poses a serious threat to their interests. It could mean the end of, or curtailing of, many industries based on refining and burning fossil fuels. So Corcoran reflects a certain wing of the business community desperate to dismiss climate change because it runs contrary to their ability to make money.
I’ve always felt that even if Corcoran was right – that climate change is not going to be as damaging as many fear – it’s a foolhardy position to embrace. After all, if he’s wrong, the consequences are cataclysmic.
But more importantly, there are compelling economic, health and environmental benefits to weaning ourselves off our dependency to oil, whether you believe in climate change or not.
For instance, recent estimates suggest that 5.5 million people around the world die prematurely every year due to air pollution. Then there are the enormously damaging environmental impacts to places like Alberta by digging up all of that dirty oil in the tar sands – the vast and permanent destruction of forests, rivers, lakes, water tables and wildlife. I once flew in a helicopter over the area around Fort McMurray and the immensity of the destruction is staggering to behold.
Furthermore, we could greatly cut our dependency on fossil fuels by investing in efficiencies. Some scientists have argued we could cut our emissions in half by simply creating more fuel efficient homes, modes of transportation and production.
And finally, there are all of the economic and technological benefits of creating a green energy sector, whether its windmills, tidal power, solar, etc. Germany, the powerhouse of Europe, has been investing heavily in green energy and is doing rather well. Canada has an abysmal record in this regard in contrast.
But instead of focusing on all of the net benefits of a creating a greener economy, Corcoran and the Financial Post brain trust spend their time beating up on the likes of Andrew Weaver, a climatologist at the University of Victoria and an MLA for the Green Party in BC. Last year, Corcoran and some of his pals at the National Post lost a defamation lawsuit that Weaver had launched against them. Justice Emily Burke’s decision makes for interesting reading, largely because it documents the lengths Corcoran went to paint Weaver as a dissembler.
For example, in two pieces he wrote in 2009 and 2010, Corcoran portrayed Weaver as someone who had blamed the oil industry for breaking into his office and did so to draw attention away from a scandal at the Intergovernmental Panel on Climate Change (IPCC). Justice Burke said that by making this allegation, Corcoran and one of his colleagues "creates the impression (Weaver) concocted a false story in order to distract from the Climategate scandal in the press." Corcoran also wrote "that Dr. Weaver knew or believed the IPCC reports concerning global warming were unscientific and fraudulent and sought to avoid personal responsibility by disassociating himself from that organization." But the judge found that these allegations against Weaver were simply not true.
Corcoran's assault on Torstar and Observer
I mention all of this because it’s germane to Corcoran’s assault on Torstar and the National Observer.
Corcoran’s argument is that Torstar should not be criticizing Postmedia because it’s the pot calling the stove black: that Torstar is also a listing and rapidly declining media company. He even suggests that Torstar is egging on the demise of Postmedia as a possible way to grab its assets.
It’s true that Torstar is in deep trouble. As my article explained, the entire newspaper industry is in a death spiral due to the vagaries of the web.
But to somehow compare the owners of Torstar with the American hedge funds and other mysterious lenders who control Postmedia is utterly absurd. The Toronto Star and its owners have a history going back more than a 100 years of public service journalism. In comparison, Postmedia’s owners are financial industry opportunists whose loyalty to Canada and the media and public service are nonexistent at worst, and pretty low at best.
Yet Corcoran tries to paint the New York-based GoldenTree Asset Management LP and Toronto-based Canso Investment Council, Postmedia's main debt holders, as almost charitable donors – good-hearted saviors of newspapers, who probably stand to lose much of their investment.
This is nonsense and shows his ignorance of what distressed debt hedge funds do and how they make money. First off, it presupposes that people like Steven Shapiro, the founder of GoldenTree and a former Postmedia director, don't know what they are doing. GoldenTree, which controls 52% of Postmedia’s variable voting shares, is one of Wall Street’s most successful hedge funds and they specialize in investing in troubled companies. That’s their thing.
And anyone who knows anything about distressed debt hedge funds understands they know how to get their money back. When GoldenTree began buying up Postmedia’s debt more than a decade ago, they undoubtedly were not naïve about the challenges facing the newspaper industry. Since then, GoldenTree has only increased its stake and debt in Postmedia, even as the newspaper industry’s demise has accelerated.
Why would they do so unless they've figured out how to profit from the company’s decline?
While Postmedia might be waning faster than expected, the reality is that its lenders like GoldenTree and Canso are run by people who answer to investors – and who want a good return. Which comes in the form of interest payments and possibly, if the company returns to bankruptcy protection, the sale of Postmedia’s assets. And because of the size of Postmedia’s debt, and the high interest rates attached to it, it’s safe to say the newspaper chain is being drained faster than perhaps need be. Which is what alarms so many in the media world.
If Corcoran was not acting as a PR hatchet man for Postmedia, he might have also done some research on GoldenTree’s track record. One of the things he might have discovered are the lawsuits it’s been involved in both as plaintiff and defendant – showing they're not to be trifled with.
Last year, a lawsuit was filed by a Teamsters pension trust fund in Philadelphia against GoldenTree. It claims that in 2013, GoldenTree lent money to an ailing magazine publishing and logistics company. The lawsuit says GoldenTree then reorganized the company's corporate structure, before putting it into Chapter 11 bankruptcy in 2014. According to the suit, by taking these actions, GoldenTree claimed it was not obligated to pay into the employees’ pension fund, and now owed the fund almost (US) $7-million. GoldenTree denied all of the allegations in the lawsuit and they've not been proven in court.
Finally, Corcoran has attacked the National Observer, calling us a "radical left/green operation", and inferring (as he is wont to do) that we are funded by foreign interests. In his desperate effort to discredit us, Corcoran would have National Post readers go along with his ruse that reporting on climate change and the environment, exposing government or corporate malfeasance is "left wing and green", rather than just doing what good journalists do. Corcoran also claims that the National Observer’s publisher, Linda Solomon Wood, has a brother who is vice-chairman of Tides Canada, a Vancouver-based foundation. In reality, the brother has not been in that position for years.
Moreover, the National Observer is not financed by Tides, contrary to Corcoran’s insinuations. And while the National Observer receives donations from both sides of the border, you cannot compare our tiny operation (with 7 reporters) to a $750-million conglomerate like Postmedia with hundreds of reporters.
In the end, Corcoran has ignored the real reasons Postmedia has been criticized by the Toronto Star and National Observer and others while overlooking reams of troubling evidence that one reason the company is suffering is due to its owners' and management’s greed and incompetence.