Thursday, January 31, 2013

News Cafe Part 3: Front Running a Failing Business

The Free Press News Cafe is a story about transparency and those who claim to have "professional standards" as journalists.

The story keeps changing, about:

1) What the relationship between the News Cafe and Winnipeg Free Press is

2) Where the $400 000 in grant money is going
3) What the relationship between the grant-funded Community News Commons and the News Cafe is

Dan Lett made a bizarre appearance onWinnipeg Internet Pundits yesterday, while taking some well-intentioned questions from mere bloggers/untrained citizen journalists. The story about the News Cafe continued to change. Lett somehow ended up proclaiming the News Cafe's successes in what is apparently now being called "community building." 

The reason why this is so controversial to begin with is because Lett wrote about CNC programming held at the Cafe without divulging he had business interest in said Cafe. Nor did he divulge who else at the Free Press has a vested interest. 

In reply to Free Press online commenters, Lett stated that he does not profit from the News Commons "citizen journalism training" which he volunteers for at the Cafe he is an owner of. Yesterday he told WIPs "the actual food and beverage part of the cafe, is run by a small separate business." 

Dare I venture to ask if any of the CNC "Investigative Journalism Courses" cover how to take an elevator to the tenth floor of the Woodsworth Building and pay $7 to find out the truth?

According to records available at the Manitoba Companies Office, there are three directors to "Flatt Iron Grill Inc." One is Dominic, the restauranteur (and by reputation a fine one). The other two listed are Free Press Publisher Bob Cox, and Free Press Canadian Newspapers CFO (ownership group of the Free Press) Dan Koshowski. The Free Press in other words, controls 2 of 3 votes on the board. 

That sure looks like Free Press controls the Cafe to most reasonable people, who may have otherwise thought this was just a branding exercise. 

According to Lett on Internet Pundits, they are just looking for a buyer to take over a "soup and sandwich" business. Soup and sandwich? A far cry from Marion Warhaft's August 2011 "Extra! Extra! News Cafe Worthy of Page 1" glowing review. In it, Warhaft stated that she was "ordered by "she who must be obeyed" (editor Margo Goodhand)" to write an "honest" review. Editor Goodhand somehow forgot to tell readers  that at least one Free Press employee (Lett), her own boss (Cox), or the proverbial cheque-signer (Koshowski) had a stake in the success of this "soup and sandwich" operation. 

Remember too, the January 21 page B1 Bob Cox sidebar accompanying Dan Lett's column that "reassured" readers about the News Cafe. What a great opportunity it is!

I have a hard time believing Bob Cox just happened to, whoops, say it was the building for sale, not the restaurant, of which he is a Director. And that at least one Free Press writer holds shares in.

Lett claimed on Internet Pundits that the restauranteur has had health problems. That may be. However, Dominic may have had another reason for wanting out: the Manitoba Government.  

On January 7th, two weeks prior to the News Cafe "opportunity" a debt...most likely for unpaid PST...was registered against "Flatt Iron Grill Inc." It appears the News Cafe owes the government over $16, 000 in unpaid remittances. The responsibility to pay this ultimately lies with the Directors, personally. 

Eleven days later, January 18, the News Cafe was posted for sale on Kijiji. 

Three days after that on January 21, Bob Cox was quoted as saying: 

"You'd want to buy it because of the association with the Free Press," Cox said.

So far, according to documents I have seen, that Free Press "association" has resulted in the Cafe losing over $68 000. So that's $16k owing to the Province and $68k in operating losses, and...

The loan.

Yes, the loan. 

A $105 000 loan the restaurant company owes to...of course you guessed it, the Winnipeg Free Press. 

There could be another reason why Publisher Cox is encouraging a buyer to come forward for $109 000 (the listing price of the News Cafe). Except it really looks like, to a reasonable person, that his "small, separate business" owes his newspaper a substantial amount of money. It really looks like the News Cafe cannot make money and someone is trying to rid themselves of their debt. 

Perhaps Free Press business reporter Geoff Kirbyson, when he recovers from being hypnotized at the Cafe, can do a story about "front running," which as someone in business explained to me is quite frowned upon. Wherein a stakeholder of a company exclaims how great the business is, without disclosing it is his business and that it is failing.

Despite repeated proclamations over the last couple of weeks of how welcoming and inclusive CNC programming is, at least one group has been excluded: established Winnipeg bloggers and citizen journalists who expect media institutions to be as transparent and accountable as any other institution in our community. 

For an "award winning" newspaper that has spent years publishing stories (and rightly so) about Mayor Sam Katz's frequently absent sense of transparency, accountability, and not declaring conflicts of interest, Dan Lett, Bob Cox, and the Winnipeg Free Press have surrendered any legitimacy as journalists to lecture Katz, or any public figure, or citizen journalists, on those subjects again. 

At the least they owe their readers an apology.


Donald said...

I wonder where this fits into the whole strategy.

John said...

Went to the FP Cafe in the summer. Definitely not the 4 star experience Warhaft made it out to be. The Free Press has become a real agenda rag. Today's top story - School to ban girls from wearing trendy tights. *gasp* . Yep, that's what's at the top of my concerns. Samyn's pleas for stories must be hitting rock bottom. Either that or this is the only non controversial item that won't piss off the FP's pals.

incongruent1 said...

The journalistic standards and ethics at the WFP are at an all time low. There is virtually no separation between the reporting and editorial function, above the board, where we can see. God only knows what's going on in meetings behind closed doors. Thanks for this.