FFWD Weekly
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Books by FFWD Staff When Avie Bennett, owner of McClelland & Stewart, "The Canadian Publisher" announced on Tuesday, June 27 that he is donating 75 per cent of his shares to the University of Toronto, with the remaining 25 per cent to be sold to Random House of Canada, a division of mammoth multi-national Bertelsmann AG, for an undisclosed sum, little was said outside the book industry (which was rocked by the news: "It’s the most significant event in Canadian publishing in the last 30 years," stated publisher Karl Siegler). But the move will, in fact, have widespread implications for funding, creative control, and ownership of the arts in Canada. The deal, five years in the making and negotiated behind closed doors with the assistance of the Canadian government, will see Random House in control of marketing, sales and backroom operations. M&S’s management and staff will be retained, at least for the three years that the university is required to keep its shares – after that, it’s anyone’s guess what will happen. One thing is certain: it won’t be long before the industry begins to think of M&S as yet another imprint of Bertelsmann, along with Vintage, Knopf, Seal, Bantam and Doubleday. "Essentially, it’s a nice way for Random House to get Michael Ondaatje for 25 cents on the dollar," says Mike O’Connor, publisher of Toronto’s Insomniac Press, "and Avie gets a nice big tax break and a chunk of cash to retire on." Bennett’s move was hailed by others, including one of his authors, Margaret Atwood, as a brilliant stroke, at once ensuring the survival of the 94-year-old firm, and neatly sidestepping the spirit of protectionist Canadian ownership laws – which forbid more than 25 per cent foreign ownership in Canadian cultural industries – while adhering to their letter. The majority of owners – generally the founders – of Canadian publishing houses are drawing near to retirement age, but as average profit margins in Canadian publishing are hovering perilously near zero, finding a buyer in Canada willing to part with a reasonable sum is a difficult task indeed. This widens the playing field – for everyone. As Jack Stoddart, owner of General and Stoddart Publishing, says, "If Random House owns McClelland & Stewart, why should Stoddart or Key Porter have to live within Canadian ownership rules? Our companies are worth a lot more if we can sell them on the open market". Both national newspapers touted the move as a triumph for free trade. Karl Siegler sees it that way, too, though, like many small businessmen, he feels considerably less sanguine about globalization’s promise. President of Vancouver’s Talonbooks and founder and policy chair of the nationalist publishers’ organization the Literary Press Group, he has been one of the most vocal critics of the deal. In his view, it’s the thin end of the wedge, a stroke which will end Canada’s long-held policy of limiting government funding of Canadian-authored books to those published by Canadian-owned presses. The deal is about precisely two things,"says Siegler: "Paying Avie Bennett’s much touted 2.5 million dollar average annual personal subsidy to M&S back by letting him write it off... and paying Random House back for paying Avie Bennett back by providing Random House access to Canadian government subsidies." He says that similar shifts in government policy destroyed Australia’s domestic publishing industry in the 1980s – so that today "the largest literary publisher in Australia is the University of Queensland Press" – and warns that Canada is not a dissimilar climate. Siegler further suggests, provocatively, that Investment Canada’s approval last year of the merger of Random House of Canada and Bantam-Doubleday-Dell may have hinged upon the condition that Random House "save" M&S in just this manner. Given the government’s active role in negotiating the deal, it seems a foregone conclusion that any opposition to Avie’s "donation" will be of little effect. In all probability, then, the next few years will see a flurry of mergers within the book industry – mostly with foreign capital – and, if Siegler is right, a diversion of Canada Council funds to subsidize already best-selling authors published by multinationals, a move which will further weaken a domestic publishing industry already struggling under the demands of a changing marketplace and changing technologies. If that is indeed the case, other cultural industries must beware as well: under revised funding and ownership laws, what, for example, would prevent Miramax for applying for Canada Council funds to film a Canadian script? Or MTV from buying MuchMusic? When multinational corporations, whose sole raison d’être is the bottom line, own Canada’s cultural industries, who will guarantee that they are interested in singing Canadian songs and telling Canadian stories?

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