Harper's meeting with Murdoch-The Real
story
Why
would big-time global media tycoon Rupert Murdoch meet with Prime Minister
Stephen Harper to discuss how miniscule Canadian media tycoon Pierre-Karl
Péladeau could set up a Quebecor Media television knock-off of Murdoch's Fox
News channel?
The
answer is that he wouldn't -- and didn't. Even Kory Teneycke, who was Harper's
chief spokesperson at the time and was at the lunch meeting in New York on
March 30, 2009, claims the Quebecor venture was not discussed.
That
hasn't stopped Teneycke, the huckster for the project, from piggybacking on the
Fox News brand. Four months after the meeting with Murdoch, he left the Prime
Minister's Office and almost immediately obtained a contract with Quebecor to
develop a conservative television channel. Teneycke, who has worked for the
Reform party, Mike Harris's Ontario Tories and the Saskatchewan Party, may have
coined the phrase "Fox News North" to attract attention and put it on
the political agenda.
And
he certainly did. Mainstream media and the blogosphere are humming with
strident commentary, both for and against. Google "Fox News North"
and you'll come up with over 750,000 hits.
But,
like Victor Frankenstein in the Mary Shelley thriller, Teneycke created a
monster that in the end consumed him. The controversy became too hot for his
corporate masters and he resigned, replaced by public relations executive and
former Brian Mulroney spokesperson Luc Lavoie.
But
back to Murdoch. A clue to the real reason for the Harper-Murdoch lunch was
provided -- inadvertently -- by libertarian ideologue Tasha Kheiriddin in an open letter she wrote to Margaret
Atwoodin the National Post. She berated the Canadian literary icon for
signing a petition calling on the government not to allow Fox News North to
proceed.
"FYI,"
Kheiriddin hectored Atwood, "Mr. Murdoch routinely meets with politicians.
He granted US President Barack Obama an audience in 2008... Mr. Murdoch has
also met with other politicians, including former Australian PM Kevin Rudd and
current UK PM David Cameron. How he found the time to add Stephen Harper to his
schedule I don't know, but it's more a compliment than a plot."
Kheiriddin
is wrong. Think plot, not compliment. There's one big difference between Harper
and the other politicians Kheiridden mentions. Murdoch owns media properties in
their countries -- Australia, the U.S. and the U.K. He owns none in Canada --
so far.
It
is well-known that Murdoch meets with national leaders to advance his corporate
interests. In a blog posting in December 2008, Georgia
Straight editor Charlie Smith reported on a
biography of Murdoch that focused on "how the media baron ingratiated
himself with political leaders, who helped him build his empire.
"Don't
be surprised if Prime Minister Harper pays a quiet visit to Murdoch the next
time Harper happens to pass through New York City, where Murdoch spends most of
his time," Smith presciently wrote.
Four
months later Harper paid the quiet visit. And the visit would have remained
quiet except for the diligent digging of a resourceful Canadian Press reporter
who searched mandatory disclosures filed with the U.S. Justice Department by
Ari Fleischer, media consultant and former George W. Bush press secretary. As a
result, the get-together hit the front pages.
The
Fox News North story received the ink, but what Murdoch wants from the prime
minister -- and can give him by way of support -- may be a more important
story.
Murdoch
-- along with other non-Canadian media owners -- has so far been stymied in his
quest to penetrate the lucrative Canadian media market. One roadblock is Section 19 of the Income Tax Act, which allows advertisers to deduct their costs of
advertising in Canadian newspapers only when the paper is 75 per cent owned by
Canadians. Since newspapers obtain about 80 per cent of their revenues from
advertising, this requirement effectively kills foreign control of Canadian
newspapers.
As
well, Broadcasting Act regulations exclude
non-Canadians from owning radio or television stations. A non-Canadian is
defined as any broadcaster whose foreign ownership exceeds 33.3 per cent of
voting shares at the holding-company level.
A
country's restrictions haven't stopped Murdoch in the past. He gave up his
Australian citizenship to become an American so he could own American
television stations. He divorced his wife of 30 years and married a Chinese
national half his age, which seemed to give him leverage in prying open the
Chinese satellite-TV market.
What
will he do to get into Canada? Whatever he has up his sleeve, don't expect it
to happen overnight. Murdoch is patient and persistent.
Working
in his favour is the fact that neither Section 19 nor the Broadcasting Act regulations are as much of an impediment to foreign
ownership as they once were. Lock enough lawyers and financiers together in a
room and they'll soon find a way to subvert the goals of the legislation.
That's
what happened to the CanWest Global media empire, which was owned by the Asper
family -- all lawyers themselves. The company opened the door to significant
foreign control with its 2007 deal to buy the 13 specialty cable channels of
Alliance Atlantis Communications for $2.3 billion.
CanWest
put up only $262 million of the purchase price, with the balance coming from
the notorious Wall Street financial dealer Goldman Sachs. The company promised
not to exert control. Right!
Perhaps
forgetting Lord Chesterfield's dictum that "he who pays the piper calls
the tune," the Canadian Radio-television and Telecommunications Commission
believed them and allowed the deal to proceed.
Then,
after the company crashed and burned, the newspaper holdings were sold to a
company called Postmedia Network, which now controls most of Canada's major
metropolitan dailies, including theOttawa Citizen, Montreal Gazette, Calgary
Herald, Edmonton Journal and Vancouver
Sun, as well as theNational Post. Its influence on public opinion is probably
greater than anything Fox News North will ever achieve.
In
defiance of Section 19, Postmedia Network seems to be owned by New-York-based GoldenTree
Asset Management and other vulture funds. Their basic strategy is to
look for troubled media companies and then scoop up the company debt -- usually
bonds -- at a depressed price. The private equity firms snapped up CanWest's
risky bonds and in May 2010 they received court approval to take over the
newspaper chain for $1.1 billion.
Their
interest is in speedy, double-digit returns, not quality, balanced newspapers.
Here,
too, the federal government is likely to believe the company's claim it is
Canadian-owned and controlled. Postmedia has a majority of resident Canadians on its board and
gives legal assurances (the lawyers again) that the foreign owners will not be
able to dictate company policies. But the Canadian directors are not likely to
make decisions that will run contrary to the interests of the foreign owners,
who are represented on the board.
Meanwhile
the Sun TV monster lumbers on. Quebecor's newspaper chain already has a long list of
social and economic conservatives writing on a regular or guest basis, such as
Ezra Levant, Mercedes Stephenson, Michael Coren, Monte Solberg, John Snobelen
(Mike Harris' education minister) and Salim Mansur. Far-right shock-jock
Charles Adler has been recruited from Corus Radio. They're being primed to
sprint into the Sun TV studio.
The
main threat is that Sun TV will magnify the already substantial Canadian
right-wing echo chamber. The Harper Tories issue talking points that are picked
up by the conservative media -- Sun TV, National Post, talk radio, Maclean's, Sun newspapers, Postmedia commentators -- and
bounced back and forth in the blogosphere until they become accepted as facts.
And
Harper moves his agenda forward.
Worries
that Sun TV will be a Conservative attack dog were fuelled by the hiring of
Jason Plotz from the Prime Minister's Office. Plotz was in charge of issues research and provided the
material the government needed to go after the opposition.
Lurking
behind the Fox hysteria is an even bigger threat to democratic media. Rupert
Murdoch waits patiently as Stephen Harper sets out to create Murdoch-friendly
ownership regulations and a more compliant regulator. Perhaps he'll be meeting
again soon with Murdoch in New York City to report on how things are going.
This
time, though, we're not likely to find out.
Donald Gutstein is an adjunct professor in the
School of Communication at Simon Fraser University and author of Not A Conspiracy Theory: How Business Propaganda
Hijacks Democracy.
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