PETER AND TONY VINER are a rare pair in the world of business, let alone broadcasting. The two brothers, separated by two years, each and on their own rose to the top of major, multi-billion dollar broadcasting businesses headed by two of Canada’s most celebrated entrepreneurs.
Peter, 67, helped the late Izzy Asper build Canwest Global into a multi-billion-dollar international media powerhouse before the company fell on hard, debt-burdened, times. Tony, 65, built Rogers Media from two Toronto radio stations (Ted Rogers’ famous first media asset, CHFI-FM, and CFTR-AM, now 680News) when he came on board in 1982 to a billion-dollar radio, print and TV enterprise.**
While both are now retired (Peter in 2010 for the second time when the ailing Canwest was sold to Shaw and Tony, also in 2010), they still work part-time in the business. Tony is on the board of directors of Sirius XM Canada and Peter will soon work as the trustee for Score Media’s TV assets as it awaits the approval of its sale to Rogers Media.
Both will also be inducted into the Ontario Association of Broadcasters’ Hall of Fame at the OAB conference on November 6 in Toronto.
Peter began his career as a sales rep in 1970 and joined Canwest in 1974. He left the company between 1984 and 1990 to head up operations for another Canadian media entrepreneur, Phillipe de Gaspé Beaubien’s Telemedia Communications. After returning to Canwest in 1990, Peter moved Down Under to head up the company’s Australian division, Network Ten, and built what was a struggling broadcaster into one of Canwest Global’s most-prized assets. Peter returned to Canada in 1997 as president and CEO of Canwest Global Television, overseeing the Asper family’s acquisition of WIC Western International Communications and later, The National Post and Southam newspaper group from Conrad Black (which altogether would become Canwest MediaWorks). He retired in 2007, but returned in 2008 as interim president of the company’s TV division and remained on board through the company’s bankruptcy and sale to Shaw Communications. He was inducted into the Canadian Association of Broadcasters Hall of Fame in 2008.
Tony began his broadcasting career in radio in the 1970s and was instrumental in launching Q-107 in Toronto as its first general manager. He joined Rogers in 1982, running CHFI-FM and CFTR-AM, the rapidly growing company’s only media assets at the time. Tony remained at the head of the company’s media division as it added print and broadcast assets (Maclean’s, Flare, Chatelaine, Citytv, The Shopping Channel, OMNI, Sportsnet, various radio stations) through acquisitions and new license startups. He was inducted into the CAB Hall of Fame in 2003.
Cartt.ca editor and publisher Greg O’Brien recently sat down with the pair (pictured at right, some years ago, Peter is on the right) in Toronto to talk about the past, present and future of Canadian broadcasting and media. What follows is an edited transcript.
Greg O’Brien: You two are very unique, as far as siblings go.
Tony Viner: We think so too.
GOB: When it comes to working in competitive businesses, I searched for some other siblings in similar situations, and I could only really come up with the Dassler brothers, who…
Tony: Adidas and Puma.
GOB: Exactly. So, one founded Puma; one founded Adidas.
Peter Viner: I didn’t realize that.
GOB: They had an acrimonious split, and the only other successful business brothers I found were other ones who didn’t get along, who started competing companies, or they split off the family business. There were a lot of siblings who didn’t get along but we never saw that between the two of you over the years.
Peter: It doesn’t exist.
GOB: But when you came together while you were working – the head of Rogers Broadcasting, the head of Canwest Global – what happened at family gatherings when you inevitably talked shop?
Tony: Pete and I always said “you could read about it in the newspaper.” I think the stuff that we talked about was we both worked for interesting entrepreneurs and we talked about the challenges…
Peter: How crazy they were.
Tony: How crazy they were, what the challenges were. We talked…
Peter: Gossip about the business.
Tony: Gossip about the business and things –
Peter: “The media director, J. Walter Thompson, I hear he’s drinking again, or I hear he’s going to New York, or I hear he’s swimming through the steno pool,” or whatever.
Tony: But I was the last to know (about business moves). We were careful – even though people would accuse me all the time of knowing stuff that I had no idea about.
Peter: Or they would say “why didn’t you tell somebody? You must have known that they were going to buy that?”
Tony: The thing is that we both ran media businesses – but (Rogers) didn’t have a big, big investment in television until we bought City (2007). Pete was mostly a television guy, and I was radio and magazines. We had OMNI, but it was relatively small, and then we bought Sportsnet and so forth.
Peter: We were in competition with CTV, so it never was a conflict. Once in a while, we’re in doing due diligence and I’d try to take a peek at who had signed in – I’d see at Rogers. But…
Tony: We talked a lot about the business and how we handled things.
GOB: Can you give me any examples?
Peter: The CRTC’s a good example to where I’d say, “I’m not getting through to whomever. What’s your relationship like? Is it just me?” Tony would say, “I don’t have a great relationship, but our lawyer does. Why don’t you try –” So, that kind of thing or, “I just can’t seem to get through to this guy – the buyer for X. He buys CTV all the time. He won’t buy us. Do you play golf with him or do you have a relationship with him? Do you have any ideas of how I might…” So, that kind of thing, helping each other out, but no real competitive stuff. As Tony said, he was primarily radio. We only ran these businesses for the last ten years. Before that, we were kind of senior but not running them, so it was even less. We weren’t looking at the same kinds of assets to buy.
Tony: And on industry stuff, we sought each other’s view. When the CAB was actually a functional organization – a dysfunctional organization, if you prefer…
Peter: Or BBM.
Tony: Yes. BBM or any of those types of things, I certainly would seek Pete’s opinion on that, and he engaged in mine. If it benefited Pete, he would help us. For example, when buying for City or OMNI, especially on OMNI, if Global could help themselves and disadvantage CTV at the same time… We did a deal on Frasier, which was a leading first-run show and then went into syndication. We picked up the syndication really through the co-operation of Pete and Global. And then, they took one play and they ran it back-to-back with the first run and made huge amounts of money because people bought the whole thing and they fleeced all the advertisers, in my view.
Peter: That’s, of course, a very sanitized view.
Tony: A gross exaggeration (laughter).
Peter: The reality is that with some of these big programming packages, you’re forced into buying things you can’t use. So, in order to make sure we kept shows out of CTV’s hands, we would try to line up City or somebody and say, “We want to lay this off. Are you guys interested?”
Tony: From that point of view, the relationship was good because we never did anything that was unfavorable to our owners or shareholders.
Tony: And if I have to deal with somebody, I’d rather deal with Pete than…
Peter: You’d rather deal with somebody you trust, unlike many other people in the business.
Tony: Who shall remain nameless.
GOB: You mentioned working for some big personalities. I wonder if you can, Tony, describe what it was like to work for Ted Rogers, especially since Ted always described himself as a broadcaster first. You were overseeing what was his first baby.
Tony: You know, I learned so much from him, Greg. The truth was, as interested as he was as a broadcaster, the majority of his time was spent first at cable and then at wireless and cable. I think he had some confidence in me and as a result, he did the right thing, which is he would hold me accountable for stuff, ask me to rationalize stuff, ask me to plan it and try to understand the plan. But relatively – and you could talk to the guys from the telecom side about this – he left me to do my own thing, much more so than the other guys.
He sent me memos. I got the usual, “I’m shocked and appalled” memos, but not to the degree that the other guys did. He had some sympathy for the rough and tumble, the competitiveness of the broadcast business. As much as he was good at cable and liked the guys at cable and liked the guys at wireless, he never thought that was as competitive a business as broadcast was.
Peter: So, he was right.
Tony: He was right. He was, absolutely.
Peter: There’s quite the steady margin, steady revenue, steady profit, relatively, in cable and wireless as compared to broadcast, which can just flow with the tides of the economy, with the hit shows or not hit shows.
Tony: When I was there, I did two things for Ted that I think he always loved me for. One is I took his beloved CHFI from fifth to number one. I didn’t do it overnight. When I tell the story, it sounds like it – but we tried about 80 things before we ever got Don Daynard, which was the thing that worked for us. And then…
Peter: The news channel.
Tony: 680News. Ted loved two things about it. One, he loved all news because he thought that was..
Peter: He was of that era.
Tony: Yes. And secondly, we beat CFRB. He was a big character. He was demanding and worked all the time. All the stories you’ve heard are true.
GOB: Christmas Day phone calls.
Tony: Absolutely! He never called me at two in the morning or any of that kind of stuff. He would begin every conversation with me the same way. “Tony, have I caught you at a bad time?” What he didn’t understand is that when he phoned, it was automatically a bad time.
Peter: But every time, you said, “No.”
Tony: Every single time I said, “No.” I think once in 29 years I might have said, “Ted, my wife’s giving birth. Can I call you back?” He said, “Well, roughly how long will that be?”
Peter: What are the contractions? How far apart are the contractions? (laughter)
Tony: I have great affection for Ted. He was a fabulous entrepreneur and terrific to me, but I never had the troubles that the other guys (in cable and wireless) did.
GOB: What did you learn from him that you carried into the business of your day-to-day dealings with folks at Rogers?
Tony: Ted was the king. All the employees were sort of the serfs who loved the king. We were the nobles. Everybody hated us. Ted had time for everybody. “Hello, I’m Ted Rogers,” and all of those kinds of things. So, in that regard, even though he was a billionaire, people all loved him. Look, he was a tireless worker, a tireless worker. He taught me a bunch of things. He taught me there’s no difference between the spirit of the law and the letter of the law. “There is no difference, Tony,” he’d say, “There is no difference. The law is the law is the law, the letter of the law.” The other thing he taught me is, “Read it. Where does it say that?” I can’t tell you the number of times, whether it was a CRTC regulation or whatever, “Read it. Have you read the document?” He would say to me, “Have you read it?”
GOB: So, you better have read it.
Peter: You only said no once.
Tony: He also admired daring, so he taught me to be more aggressive than I would have otherwise been in business, to take chances. He was a risk taker. So, I guess those are the – if you ask me to name three, those would be the three.
GOB: Any big leaps or chances that you took that pop to mind?
Tony: Sure.
Peter: Converted a good rock and roll station to all news.
Tony: Exactly right. CFTR was making a million and a half dollars a year. I walked in and I said, “I have a great idea. I think I know a way we can lose seven million dollars next year.” And he supported it. Citytv was losing 55 million bucks, and we bought it.
GOB: 680 is one of the few traditional stations I still listen to. Because I have all these options now in the car, satellite radio or my iPod or whatever.
Tony: If I was there, you wouldn’t be listening to it on 680.
GOB: Where would I be listening to it?
Tony: I believe it should be on FM because you won’t listen to it forever on AM (and) if a new entrant comes on FM, it won’t kill them, but it will bleed away.
GOB: You can’t hear it when you’re under the streetcar wires either.
Tony: You can’t hear it when you’re under the streetcar wires. Sometimes it’s tough to hear it in these high-rise buildings in downtown Toronto.
Peter: It’s a big, beautiful signal. You can hear it all the way up north.
Tony: You’re absolutely right. It’s a great signal, Pete, but what other evidence do you need, other than 740? CBC was sixth in the ratings and flipped to 99.1 FM (in 1999). They’re now first. We never rank them because they don’t sell time, but they’re now number one. No doubt in my mind that (the FM switch) was a big contributor.
But I would simulcast. There are rules against simulcast, Greg, but the rules are specific and I would follow those rules, but I would have 680 AM and 680 FM, if it were me. It’s a fabulous signal, but I’d put it on FM. (Ed note: CRTC radio regs generally prohibit the all-out simulcast of the same content by an owner of an AM and FM license in a single territory, but does allow it for up to 42 hours/week, or 6 hours a day.)
GOB: All right. I’ll turn to you, Peter, and ask you what it was like to work for Izzy Asper, another big, personality, larger than life guy.
Peter: It was exhilarating. He was most often the smartest accountant, the smartest lawyer, the best deal maker in the room, no matter who else was in the room. One of the things I learned from him is he was frustratingly quite a democrat. So, after a cab ride over to the station he’d say, “I hear your sports coverage is lousy,” because he heard that from the cab driver who watches our station. It was that kind of thing. He had no airs about him. He was a very interesting guy that way. He was a real democrat.
Because he wasn’t a television expert, he wasn’t afraid to ask any question and he wasn’t afraid to look stupid. You get into meetings with people and it’s obvious a third of them can’t understand the biz-speak, but nobody says boo. Izzy would say, “What does that mean?” I do that. I emulate that. I was never afraid in a meeting with lawyers or accountants or, frankly, whomever, to say, “So, what does that mean?” So, that’s one thing I’ve learned. If he can do it, I can do it. He gave me the confidence to do that because sometimes people are reticent to do that.
The other thing is that Izzy would listen to everybody, but he didn’t always take your opinion. He used to say to me, “Viner, you’re paid to give me your opinion, but I’m not paid to take it.” And that’s something I always took with me. So, whenever I was in that kind of position, I’d work to try and get people to give me their point of view, but I wasn’t obliged to take it. As Tony and I have joked, it only looks like a democracy. It isn’t. At the end of the day, you’re the guy that has to make the decision. So, I think those are my two big take-aways.
But like all of these guys – and Tony and I worked for(Allan) Slaight as well… as I hear Tony talk about Ted and as I experienced Izzy, these are obsessive guys. They worked around the clock. The stuff they said about family life and other important things is just eye wash. They worked all the time. When I worked in Australia for Izzy, I got the midnight faxes because he was up at midnight. It was his midnight, not mine. So, I was one of the first guys to get an answering machine. (laughter). But, he was very good to me, gave me all kinds of opportunity, and I loved him. He was just an extraordinary character. That was a big experience for me.
GOB: How do you think the fortunes of Canwest would have changed if the Aspers were able to buy Netstar (once the owner of TSN, RDS, Discovery, Dome Productions, etc.), as you had tried to do (in 1998)?
Peter: Well, I was the promoter of that. You know, Izzy was not very sports-oriented and at the time, it was $900-plus million which was a huge, huge expenditure. He had a $50 million dollar break fee in there and when CTV outbid us and compensated him for $50 million, I believe he was thinking “there’s $50 million on the floor versus that thing I really don’t understand and I’m going to have to go back to the bank for.”
But I think it would have been a huge difference. At the time, we would have been almost gambling the company because I’m not sure our network was a billion. I think it was $925 million or something like that.
Tony: That was a big number to pay.
Peter: And it would have made an enormous difference, but how do you know at the time? I mean, we made more money in Australia than we ever would have made on TSN. I was keen on TSN because I had been their sales agent earlier, when I was at Telemedia and I thought it could have been run more efficiently… I knew the organization pretty well.
GOB: Working for another founder and entrepreneur then.
Peter: De Gaspé Beaubien. I had come from Slaight, so I’ve worked for three of them. Anyway, I thought Netstar was an organization that we could do something with. I once read that Rupert Murdoch described sports as tribal and hence, would always have an audience. Given what’s going on in television, you don’t want to watch an NFL game after it’s over. That’s the one thing you’ll watch live. It’s true of sports news too, I think. I want to know what’s going on now.
Tony: One of the tenets in our strategic plan was, as soon as it became trivial to store and retrieve content, sports and news became our focus because we were concerned people would store and retrieve it and eliminate the commercials, which is what you and I do most of the time. I will PVR golf and race through it because I’m a golfer, but there’s nothing else on, no sport, no game that I’ll (watch delayed). If it’s four to three, it’s four to three. I’m sorry I missed the game, but that’s it.
GOB: Unless you really slap the blinders on. You’ve got to turn your phone off, your radio off…
Tony: You can’t talk to anybody. That’s exactly right. But you know, (TSN) did like $50 million dollars or something like that in profit when we were doing $40. So, $900 million dollars is a big premium to pay for that. Now, I don’t know how much Discovery would have made then.
Peter: Tony, I don’t remember, but I know we made a hell of a lot more money in Australia than we ever would on TSN – and New Zealand and Ireland and other things. Izzy thought he was licensed out in Canada, which is the reason he started to look at first New Zealand, then Australia, then Ireland.
GOB: Licensed out, as in he wouldn’t get any more –
Peter: Yes, he wouldn’t get any more licenses, or the cost would be prohibitively high, either in terms of benefits or people holding us up for –
GOB: Even specialty services?
Peter: Well, specialty services weren’t in vogue then. At that stage, we had a guy, Stan Thomas, inside and he had to kind of campaign every day for us to apply for one. They were like dog licenses or elevator licenses, you know? He pitched us on doing this one called “Prime,” which was supposed to be for people 50-plus. We all went, “Oh, who’s going to watch this stuff?” And then before we bought the newspapers, we were trying to pitch Izzy on buying Alliance – before Alliance and Atlantis combined. He said, “Well, you know, you’ll have to overpay.” We said, “Overpay for a business we know, rather than overpay for a business we don’t know,” which is what happened when he later bought the newspapers.
GOB: That was the beginning of the end for Canwest. Is that fair to continue to say that?
Peter: It was an unfortunate sequence of events: Overpay for the asset, the asset starts to decline, its decline accelerates, and then you’re caught at an ugly intersection in terms of the economy, the total advertising… That’s a very bad intersection to be in.
GOB: Now, Rogers went in another direction, from broadcasting, into distribution – cable and into wireless.
Peter: They were smart. They sold The Sun early. (laughter) We should have been watching.
GOB: Do you ever contemplate ‘what ifs’? What if Ted didn’t get into wireless, for example? What would have happened?
Tony: You know, Greg, it’s hard to imagine. I visited Ted two weeks before he died (on December 2, 2008), in his hospital room. I’m sure you’ve heard this story. He was on the phone to the CRTC chairman.
GOB: Konrad (von Finckenstein).
Tony: Konrad. And he said he wanted to buy Global. Konrad said, “Geez, that’s a great idea. Global’s in a bit of financial trouble.” He said, “ I think PK (Péladeau, CEO of Quebecor) always wanted to buy Citytv, so that’ll work nicely.” Ted said, “No. You don’t understand. I’m not selling City. I’m just going to buy Global and the specialty services.” Konrad said, “Well, we have rules against that, Ted.” Ted said, “These are different times. Who else is going to pay this kind of money, keep it going, and all these other kinds of things.” Two weeks before he died. So, my life would have been different with that.
When we bought City – the story I tell is, as soon as the decision came down that CTV wouldn’t be able to acquire City in the CHUM deal (June 2007), Ted called me up to his office and he said, “What’s City worth?” I said, “I have no idea. I think the analysts would tell you it’s worth $220, $230 million.” But I said, “I don’t think you’re going to be able to buy it without something with a three in front of it. I think $300, $305, you might be able to buy it.” So, he gets on the phone to Ivan (Fecan, then CEO of CTV) So, Ivan says “well, I’m going to have an auction… because that’s how we bought CHUM.” Ted said, “Well, do you think that’s fair to the employees?” I knew where he was going. Saying “Protracted process. They’ve already been through a protracted, lengthy delay. I’ll buy them.” So, Ivan said, “What’s your price?” It was $375 million, I think. And then they said, “But not for the property.” They owned a lot of land, so you have to buy the land separately.
Peter: Toss out all the land!?
Tony: Frankly, the land in Calgary is worth more than the television station. So, we bought it. But you have to remember, we were awash in cash. The stock was going crazy. We were the only GSM carrier, the only one with iPhones and smart phones and so forth. So, he paid for it and it wasn’t until we unscrambled the egg – the first year we lost $55 million dollars at City because they made terrible deals. They had done everything in favor of the specialties.
Peter: The pricing was all organized into the specialties.
GOB: For all the shows, you mean? So, they were…
Tony: Yes. They bought shows for Space and ran them on City. It was really…
Peter: There’s a bit of an allocation game in these things too. You say: “Okay, what are your head office costs and your fixed costs? Let’s allocate them 50/50.” In fact, they should be allocating maybe 20, for instance. To some degree, it’s an accountants’ game. You can make things look much more profitable, where you just don’t charge any overhead, or charge a lesser amount. So, that’s what happened with some of the things we bought, too.
Tony: Really, radio was carrying that company, which we didn’t realize at the time.
GOB: CHUM/City, you mean?
Tony: Yeah, which the boys never told me, the Waters boys. So, that was how that happened.
GOB: I remember it happening quite quickly.
Peter: It happened that morning.
Tony: Geoff Beattie (of CTV investor, Woodbridge) called up Ted and tried to squeeze him for another five million dollars or something. Ted said, “No, that’s my price.” Good for him and good for Geoff for trying. I think Ivan wanted him to get off the phone so Ted wouldn’t hear the champagne corks popping. He said, “Well, I have to check with my executive committee.” Ted said to me, “I think that’s a done deal.” So, Geoff called Ted later that day. Ted told me, he said, “Geoff asked for another $20 million dollars, for $400 million, to even it out.” Ted said, “No, that’s my price. I want it, but we’ll get in the auction with everybody else.” Ted, you know – was a tough guy.
Peter:
GOB: What do you think is the future for TV in Canada?
Peter: What form of TV?
Tony: Ten percent is Netflix (now). Video content’s going to be huge.
GOB: How long do you think the business model of buying U.S. content for airing on Canadian broadcast networks is going to last?
Tony: Well, it’s been predicted to die for the last 25 years, so “News of its death,” to quote Mark Twain, “Is greatly exaggerated.”
GOB: I talked to (Rogers Media president) Keith Pelley recently, and he said he’s looking for content that’s “IP-resilient” because he really thinks that that day is just about upon us, and that’s why they bought “The Grand Slam of Curling,” for example, because that’s something they can own all the way from the ice to however many places they want to sell it to.
Tony: I agree with that.
Peter: I agree with that, too. I guess the answer I would give you, Greg, is I think it will be forever. The difference is the price may be different.
Tony: The other thing to remember is that the Americans can’t monetize (Canadian viewing). So at the end of the day, they’re better off to sell it to us because they can’t monetize it. Their advertisers don’t care about Toronto or Vancouver. No matter what anybody says… sure, there are global brands but…
Peter: They won’t pay. They won’t pay.
Tony: They won’t pay a nickel for Toronto or Vancouver. So, unless they could sell the Canadian audience – if they could sell Toronto for the same cost per point as New York and do it in one transaction – this business is dead in Canada.
Peter: I think that the questions should be posed, really, to advertisers, if they support the system. One of the reasons the system is as weak as it is, is because advertisers have been spending more of their money on-line and abandoning more traditional media. My view is that Canadians are, in terms of their entertainment appetites, very close to Americans. So, they’re going to be finding American programming whether it’s on Global or on CTV or whether it’s online. So, there’s always going to be a big market for it, but it’s a question of who’s going to control it? The studios will sell it to the highest bidder.
GOB: In April I was at NAB and they had a number of different studio executives all on the stage. The broadcasters from different areas were asking, “Well, how long will you stick with the local broadcast model?” A fellow with either CBS or with Warner said, “Look, we will sell to whomever gives us the biggest cheque.” That’s what it boils down to, whether its TV or Netflix or whatever.
Peter: That’s what we like about the Americans. Absolutely!
GOB: But what if, say, Netflix went to CBS and said, “Look, we want to buy all these current shows for the Canadian market and we’ll pay you more than what CTV is paying?”
Peter: They’d be sold. What makes this market different than any other market is that American programming out-rates Canadian programming, full stop. If you go to Australia or you go to Britain or you go to New Zealand or you go to Ireland, (home-grown) programming out-rates other programming.
When I went to Australia and I looked at some of the shows there – I think they had a gardening show on Friday which probably was number one. It was against “Dallas” or something. I said, “How is this possible?” It’s two people talking about a plant. They’re talking in Aussie accents and people were interested. They thought the other stuff was really American.
In Canada, the top 20 shows finance everything else, to such an extent, in fact, that to sell the shows from 20 to 35 is difficult. The numbers have changed dramatically, too. When I first started in the business in the ’70s, if a show got 10 rating points, we said, “Let’s get it off the schedule. This is a dog!” Now, 10 rating points, it’s probably number five.
Tony: It’s not that I’m a Luddite or anything. I think people will watch shows wherever they can get them and video will be ubiquitous, but at the end of the day, the manufacturers of the show are going to sell it where they can sell it. As long as they can’t sell or can’t be bothered to sell or the people that support them, their advertisers, aren’t interested in Canada, then it’s going to be better to sell them to a Canadian distributor.
GOB: You’ve both been away from the industry for a couple of years. What do you think of the ways all of the digital distribution has grown – what do you think of the way new media is developing?
Tony: It’s no surprise. Pete and I went to a dinner where (Bell Media president) Kevin Crull spoke. Smart guy. He talked about over-the-top viewing and the issues they had with the internet where people are watching their computers. He’s paying a distribution price from a studio, and the studio’s giving it away free through another distribution mechanism.
Peter: Creating new windows, in effect.
Tony: Pete and I turned to each other at the end – and this was after we’d both been retired for a year and Pete said, “This is the same old, same old. We’ve been saying this for four years.”
Peter: Just slightly different appliances, and more of them.
Tony: I’m shocked that Netflix has, according to Kaan Yigit, 17% (of viewership). Big number.
br/> Peter: I found that interesting. I thought that will help Bell-Astral.
Tony: Oh, no question.
GOB: On my street I’m surrounded by families with little kids. When they want a show on for their kids, no more DVDs, no more YTV, no more Treehouse – they’re all using Netflix.
Tony: Certainly, with my grandchildren it’s all VOD. There’s no question. They get to watch what they want. It’s not appointment television at all… but I don’t see anything that’s surprising in this. I think we saw this coming five years ago.
Peter: It’s the pace though, I think it’s here faster. I look at our kids, my nieces and nephews, as well as my own kids, and watch their behavior. One of them has cable in his house because he’s a sports guy. My daughter doesn’t have cable. She doesn’t have a land line either. These kids are in their 20s, and you go, “Hmm, what’s the future?” And none of them subscribe to a newspaper.
GOB: She must have some sort of broadband connection, though.
Peter: She does. She does. Anyway, that’s the future. I had a friend of mine who made an investment in Fairfax, the Australian newspaper company that at one time Conrad (Black) controlled. He sent me a note and said, “Can you give me some ideas on how we can cope with the digital change?” I said, “No. Forget all that. Just ask yourself what future does the medium have if nobody under 40 reads it. Don’t put any money on it.”
Tony: My kids don’t read newspapers.
Peter: I don’t see it as a business model. Newspapers in particular, and I didn’t realize this until we bought them, a huge component is the manufacture. There’s a huge union component who work about four hours a day and all kinds of capital is tied up in huge machinery, which is idle 20 hours a day. The economic model doesn’t make any sense anymore.
Tony: The iPad has a huge influence, because I always believed that no one would actually watch anything on a phone… I knew people, if they were sitting at their desk – would watch something on computer if it was clandestine, surreptitiously. But the iPad changed things… I don’t know if the iPad was the tipping point, but it was always headed that way. But, how do you monetize this? The issue with digital is that you only get six cents back for every buck you lose, if you’ve got a good digital application.
Peter: It’s huge.
Tony: It’s going that way. There’s no question about it. Brands don’t seem to mean as much. Off-line brands are different from on-line brands. Nobody’s discovered the magic formula. It’s putting up paywalls. It’s getting people to pay for it.
GOB: How do you get people to pay for it? How do you get them to pay enough, when you’re paying the stars on “The Big Bang Theory” $300,000 an episode? How do you keep earning enough to pay for all that and profit?
Peter: More worrisome than that, though – because at least they can sell that in Czechoslovakia – it’s how do you support decent news? The stuff my kids come home with, telling me: “Did you know, there’s a conspiracy… that General Motors has been keeping this fuel-efficient pump off the market for 20 years. Did you know that?” The stuff they pick up and believe from, they think, reliable sources.
GOB: Well, if it’s their friends telling them on Facebook that this is true, then they’re more apt to believe it.
Tony: Absolutely
Peter: You’ve got all the big newspaper groups. You’ve still got $75,000 a year journalists and circulation is going down six or seven percent a year, advertising revenue is going down ten and nobody will pay for the digital service because they think it should be free. This is a very ugly, ugly intersection in my view. I don’t know how to do it.
GOB: Looking back, if you could do anything differently, what would you do, given the chance?
Tony: Buy more Rogers shares.
GOB: That’s succinct.
Peter: I think I would have started my own thing… If I had to do it over again, I would be more entrepreneurial. I don’t think I ever was a very good “corporate guy”. I just happened to work for a bunch of guys who didn’t care about that. They weren’t very good corporate guys either. They were entrepreneurs. So, I think in that sense, Tony and I were very lucky.
There are tons of people just as smart as we are there in the business. I think we might have been better served to try to raise some money and apply for some licenses and buy something. I think that might have been an interesting option. I have zero regrets… but I think that’s due in part to the people that we worked for and the opportunities they gave us.
Tony: I would buy more Rogers shares but everything else, and believe me, when people chronicle my career, they talk about 680News and CHFI and City and OMNI and Sportsnet, I was lucky I had a bunch of successes along the way. It paled in comparison to the mistakes I made and the things that I didn’t do correctly. But that’s how you learn. I do think I’m extraordinarily lucky. I tell my kids, “Luck happens. It’s taking advantage of luck.” I never took a job for which I was qualified.
Peter: You never get a job when you’re qualified. You get it when you’re about 80% there.
Tony: Somebody once said to me, “Well, I’m not sure that I’m qualified for that job.” I said, “Who cares? It’s been offered to you. Take it.” I always figured they were smarter than I was. They must think that I was good enough to do this job. I can do it.
Peter: We were both very lucky. Lucky to work with the people we did. Lucky to be in the kind of golden era of broadcasting. Now, it’s a commodity business run by accountants. How fun is that?
Tony: No offense, Nadir.
GOB: What would you say is your most memorable decision or the decision that you are happiest with? Is there anything along those lines that sticks out?
Peter: Well, for me it was going to Australia. That was the big one. It was my most gratifying thing that I was involved in.
GOB: That was four years out there?
Peter: Five. That was after I’d been part of some successes and that kind of, for me, brought it all together because I was ready for private time.
GOB: You had mentioned doing something more entrepreneurial. You almost were on your own out there.
Peter: Not enough! (laughter). Thank you, Izzy. But I was as close as I could get. But you know I didn’t do anything near as satisfying afterwards. After you’re at the top of the operating thing, the next move is corporate, which is a different set of skills and not as much fun. You’re in a board meeting full of accountants and lawyers and hucksters trying to sell you cable channels in Belgium. It’s not as much fun.
Tony: The easy one is 680News because it went from an AM station that had been written down to the value of the property on which the transmitter sat, and it has since become the most profitable.
Peter: Wouldn’t you say Sportsnet, Tony?
Tony: I was going to say, tied for 680News is one that happened at the very end of my career. It’s Sportsnet One. Sportsnet One was a decision that I and others made, but the tough decision was to put 35 Blue Jay games on the channel. My dear friend, (Toronto Blue Jays president) Paul Beeston – was so angry with me, he could barely speak to me. We were inundated by complaints from all across the country.
GOB: Oh, gosh! You know how unhappy the cable operators were, too.
Tony: So, the week I leave, I go out and sign a deal with Shaw to carry Sportsnet One, and for extending our contract on Sportsnet. Everybody who’d been stiff-arming us were lining up. It was literally Tuesday or Wednesday of the last week I was there. I don’t know what that’s worth, but if The Score’s worth $175 million, probably Sportsnet One, in and of itself, is worth $250. I don’t know.
680News defied the odds. Sportsnet One defied the odds. Poor Nadir. I mean, we’re taking all this crap and he was in the telecom business. He wasn’t used to this public profile. People were writing him and it was Phil Lind and I who said, “We’ve got to tough this out. It’ll all come together, but we have to tough it out.” So, I’m proud of that and I’m proud of 680News. And let me emphasize, in both cases, I did not do it alone, I led a team… but our job as professional managers is to do the right thing. It’s not to mollify our bosses. It’s to keep them sane.
** Thanks to the Canadian Communications Foundation for help on some of the dates and other background which appear in this story. www.broadcasting-history.ca
