Canadian Press wire service moving to end co-operative

After nearly a century, The Canadian Press wire service will cease to function as a not-for-profit co-operative under a tentative new deal that will place the media organization under private ownership.

According to an internal human resources memo obtained by Canwest News Service, CP’s three biggest current members – CTVglobemedia, which owns the Globe and Mail, Torstar Corp., which runs the Toronto Star and Gesca, which owns La Presse – would become equal partners in a new for-profit entity. It would be called Canadian Press Enterprises.

The memo from Paul Woods, CP’s director of human resources, said financial difficulties, including major pension plan problems, have led to the restructuring of the co-operative, which has provided news coverage to member organizations for 93 years.

In the past few years, CP has lost several large members, including Sun Media, which broke ties with CP on July 1, and the chain of newspapers owned by Canwest Global Communications Corp., which are now in the process of being sold to a group of creditors led by National Post chief Paul Godfrey

Last year CP was struggling with a more-than-$30-million deficit with its pension plans.

Woods said the financial issues at the start of 2009 put both the future of the company as well as its pension plans under “severe threat,” but that “the new structure helps stabilize the company now and positions it to grow in the future.”

The memo said that as part of its restructuring, CP will ask the federal government to implement a 13-year special payment schedule for the pension plans.

According to the Woods memo, the company hopes to complete union negotiations by August and to complete the transaction with its proposed new investors by October.

However, in a separate e-mail obtained by Canwest News Service, the union sounded less than enthusiastic about the negotiations.

The Canadian Media Guild said bargaining would resume with the company Monday in a bid to renegotiate a restructuring deal that was agreed to by the union last year.

The union said it agreed to $5 million in pension concessions last year, but that on May 11 it was told the new investors “wanted to rewrite the deal still again,” changing the way the funds would be repaid.

“The implied threat was that they would walk away from the deal unless we gave them what they wanted,” said the internal union e-mail dated July 2.

CP did not respond to requests for comment.