shareholder democracy – David South Consulting

CASE STUDY 3: Id Magazine | 1996 – 1997

Expertise: Editing, investigative journalism, art direction, managing teams, strategy, content development.

Location: Guelph, Ontario, Canada 1996 to 1997

ISSN : 1208-4468

Features Editor: David South

Click here to view images for this case study: CASE STUDY 3: Id Magazine | 1996 – 1997 Images

Abstract

In 1996 I was hired as Features Editor for Id Magazine, a bi-weekly alternative magazine in Guelph, Ontario, Canada.

About

In 1996 Id Magazine, an Ontario, Canada alternative biweekly, was expanding and needed to improve the quality of its journalism, while also making the difficult shift to being a more consistently professional offering. I was hired as Features Editor and set about swiftly assembling a team of investigative journalists. My strategy involved targeting stories overlooked by Canadian newspapers and TV news. In the 1990s, it was often the case the best journalism and the best investigative journalism in Canada could be found in the country’s alternative media. This led to a number of firsts, including an extensive investigation into Canada’s flourishing sex industry, the government’s addiction to casinos to boost revenues, unearthing a plot by neo-nazis to infiltrate Ontario high schools with hate rock, university students’ catastrophic debt culture, reporting from the streets of Port-au-Prince, Haiti on Canada’s UN mission, and probing the government’s public services privatisation plans (including being invited to debate this topic on CBC TV’s programme, Face Off). With a keen eye for new media trends, the magazine covered the fast-rising Internet economy, early experiments with digital currencies and smart cards (Mondex) (Canadian Town Tries Out Cash Cards) being carried out in Guelph, Ontario, and concerns about data privacy.

There clearly was a gap in the news marketplace Id could better fill with solid investigative journalism and features writing aimed at a younger demographic.

How large a market gap can be confirmed by various analyses on the state of the Canadian media at the time and since. According to the book The Missing News: Filters and Blind Spots in Canada’s Press (Robert A. Hackett and Richard S. Garneau, Canadian Centre for Policy Alternatives, University of Toronto Press 2000), Canada’s media was in a mess in the 1990s resulting from declining resources, staff layoffs and media closures reducing the breadth and depth of news coverage.

My challenge: Could I bring together a talented, young team and improve the quality and consistency of journalism for a start-up magazine seeking to grow? The proof came in the form of improved audited pick-up of the magazine by readers, the magazine’s confident push to expand on the Internet, and the fact many from that original team have gone on to not only have successful careers in the media and film, but also to be influential in their own right – proof the original belief in their talent was correct.

Pressure on journalists to toe the line and not upset advertisers was also increasing in the context of ongoing high unemployment, a stagnant economy in a recession, and government austerity. Canadian media as whole also has a “great dependence on advertising, which accounts for more than 70% of daily newspaper revenues, about 64% of magazine revenues,” which means there is enormous pressure to only publish stories that do not upset advertisers. And monopolies exert great control over news content in Canada: “In the United States, ten companies control 43.7% of total daily newspaper circulation. By contrast, in Canada since 1996, one single company controls a comparable share of the media pie.”

Quoting Jeffrey Simpson in the book, newspapers are “shrinking in size, personnel, ambition and, as a consequence, in their curiosity,” …. “I believe the result has been a diminution in quality.” (p64)

Fast forward to “Today, we have a crisis in the journalism industry unprecedented in scope. A media implosion. Newspapers being reduced to digital editions, large numbers losing their jobs, circulation falling, ad revenues plunging, near monopoly ownership of big-city dailies, the old business model in a state of collapse.” (Canada’s media: A crisis that cries out for a public inquiry by Lawrence Martin, The Globe and Mail, Feb. 02, 2016).

Brief descriptions of sample issues are below:

Can Harris be Stopped? Cover

My first Id Magazine cover. It was thrown together in a few days after being hired. While a work of resourcefulness under pressure, it did capture the spirit of the times as multiple demonstrations and strikes tried to bring down the much-hated Conservative government in Ontario.

“Can the UN Help Remake a Country?” Cover

This cover photo by Phillip Smith was taken in the market area of Port-au-Prince, Haiti. I had never seen such squalor and desperation in my life. It got worse as we visited the city’s morgue, packed to the rafters with the dead and mutilated bodies of children and adults. It was a tough assignment and one that was captured with professionalism by Phillip’s camera.

Christmas Issue Cover

Back in 1996, the Thatcher thirst for privatisation came to Ontario with a vengeance. In this issue, we asked if it showed a lack of imagination to just sell publicly paid for assets to wealthy investors. We offered other ownership models and I debated this topic on CBC TV’s Face Off.

“Pulling the Plug on Hate Rock” Cover

This excellent cover by Gareth Lind was, as far as I know, the first use of pop art on a biweekly magazine cover in Ontario at that time (I certainly hadn’t seen anyone else do it). It sold the excellent investigation into skinhead rock bands infiltrating Ontario high schools very well. It was timed for release during the North-by-Northeast music festival in Toronto, and had zero returns (as in all issues were picked up).

Sarah Polley Cover

A regular contributor to Id, Canadian actor and director Sarah Polley challenged the stale Canadian left with her spiky views. In this issue we tackled the decline in the quality of TV programmes and asked if it was a moral vacuum being hoovered up by consumerism.

Student Issue Cover

This cover is by great Canadian political cartoonist and illustrator Jack Lefcourt. Always funny, Jack captures well the corporate take-over of the country’s universities and the introduction of the catastrophic debt culture that leaves so many students in a financial pickle. It was also Id’s first student issue.

“The Great Education Swindle: Are Reforms Destroying Your Future?”

“Today’s Sex Toys are Credit Cards and Cash” Cover

As Ontario’s economy experienced year-after-year of high unemployment and stagnant salaries, its sex economy flourished. In another first, the Id team tackled all aspects of the growth of the sex economy and changing attitudes to sexual behaviour. Beating the big papers to this story, they wrote with honesty and verve and made a refreshing break from the limp journalism of most Canadian newspapers.

Timeline

1996: Hired as Features Editor and assembled editorial and creative team.

1997: Id Magazine begins to simultaneously publish its content online, a pioneering move at the time.

Impact

Micro

reducing returns and boosting audited pick-ups of the free magazine – a key metric for a publication reliant on local advertising
assembled talented investigative team and graphic design and photo team
introduced pop art front covers
increased news coverage, especially impact of austerity in Canada
increased foreign coverage, including on Canada’s United Nations mission in Haiti
introduced high-profile contributors, including actor and director Sarah Polley
debated stories on other media, including CBC TV’s Face Off

Macro

most of the team have gone on to very successful careers in the media
magazine still receives good comments on Facebook many years after its closure
one of the first Canadian magazines to embrace the Internet and publish simultaneously online

A sample of published stories is below:

Casino Calamity: One Gambling Guru Thinks The Province Is Going Too Far

Will Niagara Falls Become the Northern Vegas?

Land of the Free, Home of the Bored

Man Out Of Time: The World Once Turned On the Ideas of this Guelph Grad, But Does the Economist John Kenneth Galbraith Know the Way Forward?

Porn Again: More Ways to Get Off, But Should We Regulate the Sex Industry?

Redneck Renaissance: A Coterie of Journalists Turn Cracker Culture into a Leisure Lifestyle

Swing Shift: Sexual Liberation is Back in Style

State of Decay: Haiti Turns to Free-market Economics and the UN to Save Itself

TV’s Moral Guide in Question – Again

Citations

Political Governance of Capitalism: A Reassessment Beyond the Global Crisis by Helmut Willke, Gerhard Willke, Edward Elgar, 2012

Schizophrenia: A Patient’s Perspective by Abu Sayed Zahiduzzaman, Publisher: Author House, 2013

https://books.google.co.uk/books?id=daEHAQAAQBAJ&dq=Schizophrenia:+A+Patient%E2%80%99s+Perspective+by+Abu+Sayed+Zahiduzzaman,+Publisher:+Author+House,+2013&source=gbs_navlinks_s

Other Resources

Freedom of Expression: Introducing Investigative Journalism to Local Media in Mongolia

Ger Magazine Issue 1

Ger Magazine Issue 2

In Their Own Words: Selected Writings by Journalists on Mongolia, 1997-1999 (ISBN 99929-5-043-9)

The back issues of id magazine reside at the Bibliothèque et Archives Canada / Library and Archives Canada [has v.5(1995)-v.8(1999)] collection.

OCLC Number/Unique Identifier: 1082496695

ISSN: 1208-4476

https://davidsouthconsulting.org/2021/06/01/case-study-2-watch-magazine-1994-and-1996-2/

https://davidsouthconsulting.org/2021/05/25/ger-mongolias-first-web-magazine-and-a-pioneering-web-project-for-the-united-nations-12-january-2016/

https://davidsouthconsulting.org/2021/03/12/southern-innovator-magazine/

This work is licensed under a Creative Commons Attribution 4.0 International License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

Province For Sale: Step Right Up For An Opportunity To Buy What You Already Paid For

“This is not being driven by fiscal or ideological motivation, though that may seem funny.” Conservative advisor James Small

By David South

Id Magazine (Canada), December 12 to December 26, 1996

It is looking more and more like the Conservative government will launch a massive privatization campaign by the middle of next year. And it is becoming clear how key government assets such as Ontario Hydro, liquor stores and public broadcaster TVO will end up in private hands. The prevailing ideology of key advisors to the Harris government, including influential financial heavyweights at Canada’s top underwriters, is leaning towards a free-for-all where the highest bidder will win.

To date, the government has been coy about its plans, occassionally making vague threats that certain services need to be “looked at.” Assets that could go on the block include road maintenance, jails and the Ontario Clean Water Agency. In August, the government appointed former banker Rob Sampson as the minister for privatization. His days as vice-president of corporate finance at Chase Manhattan make him a popular candidate with the suit, tie and blouse crowd on Toronto’s Bay Street.

While Sampson is so far surrounded by only a handful of advisors, the plan is to create a privatization agency that will supervise each sell-off after getting the go-ahead from Cabinet.

Sampson’s policy advisor James Small, sums up the government’s attitude: “This is not being driven by fiscal or ideological motivation, though that may seem funny. We can do better for less, even though that may sound trite.”

The government’s taxpayer-is-always-right attitude means it believes the best option is to float the newly privatized companies on the stock market, letting the highest bidder win.

“We have sophisticated investors in Ontario,” continues Small. “[Privatization] is not driving us to expand shareholders in Ontario. Can we, as taxpayers, benefit? What will give the best results. It is not ideological. In Canada we have a consumer culture and a very mature social structure. The market will determine what people will pay for things. We didn’t get elected to sell the family silver.

“There has been 16 years of this happening. But is Margaret Thatcher the way to go? One of the advantages for Ontarians is that we can pick and choose the best approach. It’s difficult to point to one part of the world, one way we could provide better service.”

Shareholder Democracy

A concept popularized by British prime minsiter Margaret Thatcher in the 1980s, shareholder democracy actually saw the light of day in British Columbia back in 1979. Then, premier Bill Bennett embarked on an ambitious scheme to give every citizen of the province, including children, five shares in the British Columbia Resources Investment Corporation, a mining and logging company. Out of a population of 2.4 million, 2.07 million applied for the shares. While that idealistic experiment eventually failed as a series of bad deals pushed the share price down and arrogant executives pissed people off, it was a bold initiative.

Similar schemes have been used in Eastern Europe to increase private ownership in the economy.

But it is looking more and more like the government is going to try and avoid even a semblance of giving Ontarians a fair shake, by selling shares on the stock market to whoever can afford them. While the NDP and unions are opposed to privatization for some very good reasons, they are missing out on an opportunity to push the government to divide the shares up amongst all Ontarians (not necessarily a big stretch for the NDP, who brought us toll highways).

Shareholder democracy has developed two broad – and opposing – interpretations. For the left, a shareholder democracy in its truest sense is public ownership. For right-wing idealists, it means a nation of share owners playing the stock market with all the aggressiveness and greed of free-market capitalists.

Like any ideal, the reality is far more disappointing. Any small-time stock holder will tell you about arrogant CEOs and board members not listening to them. Ask any Ontarian on the street, and they will tell you about arrogant and incompetent civil servants who aren’t listening to them.

There is a more radical and fairer approach to privatization that would suit the populist rhetoric of the Conservatives. It involves selling shares along the lines of WWII war bonds. This solution would satisfy left-wing concerns the rich would run away with all the loot, while massively increasing share ownership in Ontario and raising funds to improve services and infrastructure. By selling millions of shares cheaply, and forbidding the trading of those shares, millions of Ontarians could reap the benefits of profit-making assets. This scheme would be contingent on reorganizing those agencies to become profitable, but could avoid a fire sale of taxpayer-funded agencies to wealthy corporations and investors. If critics of the government took the opportunity to guide the Conservatives, when a privatization is announced, towards mass share ownership, some good would come of it.

With all its scandals, bad publicity, grotesque executive salaries and inconsistent service that has turned privatization into a dirty word in the UK, the fact is share ownership did go up. In 1979 when Conservative prime minister Margaret Thatcher was elected, shares were owned by 2.5 million people; by 1992, 11 million people had shares or a quarter of the population. Narrowly defined, that is a success.

But the mainstream financial community loathes the idea for obvious reasons. At consultants KPMG, corporate evaluater John Kingston symbolizes the opposition to anything other than a straight sell-off at the stock exchange. “Issuance of shares to employees doesn’t put any new money into the coffers, like in the Eastern European example of gifting shares,” he says. “But selling shares to the public does provide some compensation. They must satisfy taxpayers by getting the right amount.”

“I think if government is going to privatize then it is a good time to do it,” says Deloitte and Touche’s Jim Horvath, a veteran of privatizations in Argentina, Hungary and Brazil, who supports a quick sell. “The stock market is up. There are a lot of deep pockets looking for investments.”

The mantra for an open sale will get louder as each privatization approaches. But such a sale does have its disadvantages.

Advantages of an open sale:

Can get the highest price. Use the funds to pay down debt or a one-time only increase in funds for something like health care. Argue protecting taxpayers’ interests by selling for the best price. The asset could raise funds on the stock market to improve infrastructure/services. Once in private hands, future governments will have a hard time trying to buy assets back.

Disadvantages of an open sale:

Taxpayers are also consumers; they could get screwed by any increase in rates. There is no guarantee the government will use funds for public good (maybe they will build another casino?). Any pay-off is once only, whereas the LCBO for example, makes money every year. Government could make a mistake and sell for too low a price.

Government Agenda

Two factors could significantly slow down the government’s ability to launch privatizations. The Conservatives have relished making cuts to government services despite labour unrest, but it has shown little skill at the more intellectual task of implementing a new philosophy. Major planks of their Common Sense Revolution, such as workfare, are bogged down and in chaos. Privatization will need a sophisticated sales job to counter-attack the slick television and newspaper ads unions have been running for the past year attacking privatization. Encouraging mass share ownership would show that leadership the government sorely needs.

The second liability is its own ambitious agenda. Already the Legislature has had to extend its term to try and deal with a backlog in reforms, including chopping another $3 billion, rearranging how government services are delivered and fighting the province’s doctors. But if it must privatize, then the honourable thing to do is to offer mass ownership. To do otherwise will show Ontario isn’t even capable of the heights of imagination some of Eastern Europe’s new democracies have shown.

Note: I debated this topic on CBC TV’s Face Off after this was published.