The US has
AIG. Canada has
CHCH.
It always astounds me to read when a company makes millions of dollars a year, and still manages to lose money. Oh sure, I can see how it happens to automakers: there are millions in expenses ranging from design and engineering, to shipping the cars across the country, to advertising. The product itself has a sticker price well into the thousands, and for many of us it's hard to image getting through life without it. A number of other industries fall into that category of having high production costs balanced with strong demand, including health care, raw material processing - the steel industry, for example - and energy. Poor management, a miscalculation of the market, or, in the case of some automakers, a lousy product can sink you into the red. It's something I expect and can accept.
The publishing business is another matter. Sure, you can open a publishing house today and expect to lose money for the next few years. Any business takes a while to turn it around. There's office supplies,
salaries, lunches, utilities, press kits for new releases, and of course property
acquisition. (Buying the manuscripts) Just the cost of postage to send out rejection letters can run into the hundreds. And after all that, there's no
guarantee you'll land the next
Water For Elephants. And let's face it, book publishing isn't exactly a high profit center. Publishers have to reach pretty low on the cultural totem these days to stay
relevant in the
Internet age, scrounging for bottom feeder tidbits by offering contracts to the latest
sorrowful sole with 15 minutes on the fame clock. It's been a long, steady fall from O' Henry to
Octomom.
But when a publishing house owns the US rights to Harry Potter and still manages to lose millions year after year, I can't help but wonder if at some point the Editor in Chief was Bernard
Madoff. When can we expect Scholastic to apply for a government bailout?
And that brings me to
CHCH, channel 11 in Hamilton, Ontario. They're expected to lose $29 million next year.
This is not like your local CW station having a bad year.
CHCH is the flagship station of
Canwest, a telecommunications business that works something like Canada's version of Time Warner, only without the Time or the Warner. They operate a number of programming services, and provide Canadian content as a competitor to the CBC. It's an unfair competition by American standards, as
Canwest follows a business model closer to a cable operator, while the CBC functions much like the West Branch of the BBC. Basing their operation out of Hamilton seems to me like a dicey proposition; true, the cost of living will be lower than that of Toronto, but not by much, and I would imagine the brightest and the best would rather not drive an hour or more to work. Then again, ESPN runs out of Bristol.
So, it's not really all that surprising that
Canwest is losing money, especially in today's economy. I can
believe that. But the part that got me was
Canwest spokesperson John Douglas saying in
The Spec that the five stations in its E! network, including Hamilton, have been consistent money losers for a decade.
"Despite the cost-cutting exercises we've undertaken over the past few years, the stations ... have continued to decline as a group," he said via email. "Over the 10 years that we have owned these stations, they have never been profitable."
Ten Years? How do you not make money and stay in business for ten years? After two years somebody
should've repo'ed the transmitter. After five years Vinnie and
Rocko should've fitted the CEO with cement shoes for Lake Erie.
They blame the lack of American content for their downturn in fortune. (Translation: These days, American TV is even more crappy than our local stuff.) That's like NBC saying, "We can't make another hit like
The Office because the BBC won't let us rip off their stuff anymore."
Wanna buy a TV station?
CHCH is for sale... like a motorboat out in the front yard. Assuming you're a citizen of Canada, you're going to need to be able to eat more than $3.4 billion in debt. Don't count on ad revenue to pay that off. Like everywhere else, the market is soft, and the ratings are bad. Oh, and did I mention... Canada is going digital along with the US. Hope you saved up for the tower crew to take down the analog antenna.
CHCH has a proud heritage of taking the goose that lays golden eggs and making pate out of it. Pick up a copy of We're All In This Together by Steve Smith, and check out how CHCH flushed away The Red Green Show and treated Smith like a dirty diaper, only to watch Red become a Canadian cultural icon on the CBC. (The entire book is a great read.)
In the meantime, if you run a fast food restaurant, you can expect to see some applications from former Canwest management any day now. You can hire them. Just don't let them go anywhere near the cash register