Media Convergence and Canadian Ownership: CIBC/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication August 6, 2002

Transcription

1 Media Convergence and Canadian Ownership: CIBC/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication August 6, 2002 COMPAS Inc. Public Opinion and Customer Research

2 Introduction Canada s CEOs and business leaders perceive the convergence problems associated with AOL and Vivendi above all as rooted in the inherent problems of mergers in general and poor corporate management. Neither accounting scandals nor general problems in the economy are seen by many as root causes for the problems encountered by these convergence behemoths. On the matter of media ownership, the archetypal viewpoint is that broadcasting and newspaper companies need to be at least 51% Canadian-owned but not 100% Canadian-owned. Opinion is divided about allowing foreign investors to establish and operate new broadcasting or newspaper properties in settings now characterized by local monopoly. These are the key findings from the current web-survey of CEOs and other business leaders conducted by COMPAS on behalf of the National Post under sponsorship of the Canadian Chamber of Commerce and CIBC. Media Convergence Divided Opinion Canadian business leaders are split down the middle when it comes to the economic value to shareholders of corporate mergers involving convergence whether the convergence is between traditional media and the Internet or broadcasting and newspapers. When asked how much value there was when a broadcasting company marries a newspaper company, 31% report much added value and 38% report no added value, as shown in Table 1. Similarly, when asked the same question involving a partnership between a traditional media company and an Internet company, 30% report much added value, and 37% report no added value (Table 1). Difficulties Among Convergence Players Likely a Result of Internal Issues Respondents were asked to score various explanations for the difficulties encountered by some merged media players. In the context of recent media reports, respondents were likely thinking of AOL-Time Warner and Vivendi. Few respondents considered recent accounting scandals as key to these difficulties, as shown in Table 2. The main factors in these merger difficulties are perceived to be the problems inherent in any kind of merger plus the difficulties associated with poor management leadership. 1

3 Table 1: As you know, there s been discussion in the U.S., Canada, and other countries about the economic value to shareholders of corporate mergers involving convergence. On a 7-point scale where 7 means much added value and 1, no added value, how much added value is there when [ROTATE] A broadcasting company marries a newspaper company A traditional media company marries an Internet company Mean DNK Table 2: As you know, a number of the major, world-wide convergence players like AOL-Time Warner and Vivendi have run into difficulty. To what extent are each of the following possible explanations of their difficulties valid? Please use a 7-point scale where 7 means very valid and 1, not valid. [ROTATE] Mergers are often difficult and these particular partnerships did not mesh well Poor management at the particular companies that experienced difficulty These particular mergers were weighed down by weak partners, especially those with Internet exposure Mean DNK The accounting scandals The state of the economy as a whole

4 Media Ownership Turning to another issue, COMPAS elicited respondents views on ownership issues. The archetypal view is that Canadian broadcasting and newspaper companies ought to be at least 51% Canadian-owned but not 100% Canadian owned, as shown in table 3. Opinion is divided as to whether foreign investors ought to be allowed to create and own broadcasting companies and newspapers in settings that are now characterized by local monopolies. 3

5 Table 3: Turning now to media ownership issues, as you know Canadian law limits or prohibits foreign ownership of broadcasting and newspaper properties. To what extent do you agree or disagree with each of the following opinions? Please use a 7-point scale, where 7 means strongly agree and 1 the opposite. [ROTATE] All newspapers should be at least 51% Canadianowned All TV broadcasters should be at least 51% Canadian-owned Foreign investors should be allowed to create and own newspapers in markets which do not currently experience local competition Foreign investors should be allowed to create and own TV stations in markets which do not currently experience local competition All newspapers should be 100% Canadian-owned All TV broadcasters should be 100% Canadian-owned Mean DNK Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted July 30-August 1,

6 Because medium and small companies are more numerous in the economy and hence among Chamber membership, actual respondents are drawn more from these strata than from the stratum of the largest companies. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of n=152 are deemed accurate to within approximately 8 percentage points 19 times out of 20. The principal and co-investigators on this study are Conrad Winn Ph.D. and Jennifer McLeod 5