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overview
holdings
landmarks
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overview
This
profile covers CanWest Global, the Canadian broadcast
and newspaper group that is active in Australia and Ireland
(and formerly had
major interests in New Zealand).
It covers -
introduction
CanWest
Global, controlled by the family of the Izzy Asper (d
2003), has major broadcasting operations in Canada,
Australia, New
Zealand and Ireland, along with a Canadian newspaper
chain and the usual media mogul bric-a-brac such as outdoor
advertising and multimedia operations.
the group
For Australians Mr Asper arrived on the scene with a contentious
- for example see the Australian Broadcasting Authority's
report (PDF)
- but ultimately successful bid for the ailing TEN
television network.
He was in the news in 2000, when he relieved Conrad Black's
Hollinger group of its Canadian newspapers for around
US$2.2 billion.
In 1995 CanWest made the highest bid for Britain's Channel
5 television network (now controlled by RTL)
but was reportedly rejected by regulators unhappy with
its programming plans. Claims in Canada that it is "nothing
but toll collectors between Canadians and their access
to popular American shows" have resulted in defamation
action.
As of 2002 the group covers broadcast television (reaching
over 94% of English-speaking Canada and competing with
the Rogers cable tv group and
Shaw), radio, newspapers, minor
film/tv production and distribution interests, advertising
and multimedia.
The Hollinger acquisition gave it 15 major metropolitan
newspapers and 126 community newspapers across Canada,
along with corporate indigestion. Mr Black got a stake
in CanWest (later sold for C$271m cash). Salomon Smith
Barney commented that the deal gave CanWest overlapping
television and newspaper coverage in 25 of its 26 markets,
with an overall 35% share of the Canadian advertising
market.
In July 2002, after delays in selling money-losing New
Zealand broadcast operations, CanWest announced that it
would sell some printing operations and 12 newspapers
in Atlantic Canada and Saskatchewan to GTC Transcontinental
Group for C$255m.
In January 2003 CanWest sold 30 titles in Southern Ontario
(including 21 weekly newspapers) to Osprey Media Group
for C$193m. Osprey was a C$220m MBO by Hollinger executives
in 2001. In April 2004 CanWest announced that was
selling off the remnants of its Fireworks Entertainment
production and distribution arm, with a writedown of C$200
million and plans to sell the Fireworks film and television
library. CanWest acquired a controlling stake in Fireworks
for C$40 million in 1998 and spent over C$100 million
on productions in 2003.
Later in 2004 it floated 30% of its New Zealand radio
and television operations and sold its stake in Ulster
Television (acquired in 1997) to pay off debt.
In January 2007 CanWest partnered with Goldman Sachs in
a C$2.3-billion deal to acquire Alliance Atlantis Communications
Inc. The expectation was that CanWest would gain Alliance's
13 Canadian specialty TV channels (such as HGTV and Showcase);
Goldman Sachs would get the international distribution
rights to the TV drama CSI: Crime Scene Investigation
and Alliance's feature film distribution operations.
CanWest would contribute its Global Television Network,
to supplement provision of C$132 million for a 17% equity
but would control most voting shares in an effort to meet
regulatory concerns. The deal thus mirrors CanWest's Australian
presence. Leonard Asper responded to criticism by commenting
There's
concern that Goldman might be trying to rent our passport
for this purchase. It's just the opposite. We're renting
their equity.
It
is reported that at the end of 2010 the two partners will
divide up shares in the company, based on the financial
performance of the TV assets.
In May 2007 CanWest announced that it would buy back the
CanWest MediaWorks Income Fund, an income trust that owns
10 of CanWest's daily newspapers (including the Vancouver
Sun, Ottawa Citizen and Montreal Gazette).
The fund was launched in late 2005; CanWest offered some
C$550 million in the buy back (C$55 million less than
the original price) and would take on the Fund's C$790
million debt.
During the following month CanWest abandoned its sale
of the Ten Network, opting instead to take formal control
by converting its 56.4% economic interest into voting
shares.
The Asper family holds around 45% of CanWest.
An indication of the holdings is here.
the founder
Like Roy Thomson - whose
favourite music was the sound of a cash-register - Israel
(Izzy) Harold Asper appears to have been concerned to
portray himself as just plain folks, with a famous anecdote
about his first job scraping chewing gum from the seats
of a cinema concluding "I was too dumb to realize you
weren't supposed to chew it." A likely story, since his
dad owned the cinema and he went on to become a QC in
1975 after practice as a tax lawyer.
Asper served as leader of the Manitoba Liberal Party from
1970 to 1975 before launching independent television station
CKND in 1974 and expanding into Australia, New Zealand
and Ireland with a low-cost business model that earned
him a reputation as the "bargain-basement broadcaster."
He famously advised his New Zealand employees that journalists
weren't in the news business; they were in the business
of selling soap. That sentiment would have been shared
by many proprietors was usually more wisely kept within
the boardroom. Criticisms about management interference
and low standards - a Canadian version of the US McPaper
chains - were reflected in laments such as Not in
The Newsroom: CanWest Global, Chain Editorials and Freedom
of Expression in Canada, a 2002 study
by Canadian Journalists for Free Expression.
Asper died in October 2003.
Australian television
CanWest has the dominant economic interest (over 50% of
shares) in Australia's TEN commercial
television network, acquired for $245 million in the aftermath
of Westfield Capital's foray into broadcasting.
Because of foreign ownership restrictions it is formally
restricted to under 16% of a voting interest. One might
presume that voting and economic interests generally coincide.
NZ radio and television
CanWest controlled New Zealand commercial television network
TV3
(acquired 1991-97) and TV4,
a second commercial network operating from TV3's Auckland
studios.
In 1997 CanWest acquired New Zealand's More FM radio network
for NZ$33 million. More FM was founded in 1991 and had
eight stations: three in Wellington, two in Auckland,
one in Christchurch, one in
Dunedin and one on the Kapiti Coast. CanWest also acquired
Channel Z in Christchurch and Wellington and The Breeze
in Wellington.
In 2000 a stock market bid gave it 71% of RadioWorks NZ,
by then the second largest NZ commercial radio broadcaster
with Radio Pacific, The Edge, The Rock and Solid Gold
networks in addition to 22 local stations. A report commissioned
by independent directors suggesting that the network was
worth up NZ$9.97 rather than the acquisition price of
NZ$8.25 per share. CanWest's subsidiary Media Investments
subsequently acquired the outstanding shares. CanWest
had around 48% of New Zealand radio revenue in 2002.
Canwest floated 30% of its NZ operations in 2004. Those
operations included TV3, what had by then become the C4
music tv channel, and 140 radio stations.
In May 2007 it sold the remaining stake in CanWest Media
Works to private equity
group Ironbridge Capital for NZ$386m.
the newspapers
CanWest's acquisition of Hollinger's Canadian print operations
made it the dominant Canadian newspaper publisher, with
holdings previously controlled by the Southam and Sun
groups.
William Southam (1843-1932) worked at the London Free
Press (est 1847) before acquiring the ailing Hamilton
Spectator in 1877. Revival of that imprint provided
the foundation for acquisition of a chain of dailies that
included the Montréal Gazette, Ottawa
Citizen (est 1845), Edmonton Journal,
Calgary Herald and Windsor Star.
During 1998 Sun Media - centred on the Toronto Sun
- traded the Financial Post to Southam for Southam's
Hamilton, Kitchener, Guelph and Cambridge newspapers.
It bought the Hamilton Spectator, Kitchener-Waterloo
Record, Guelph Daily Mercury and Cambridge
Reporter from Hollinger.
Competitor TorStar attempted
a hostile takeover in 1998, with Sun instead falling to
Quebecor for C$983 million.
The Sun, Vancouver's largest daily newspaper,
was founded in 1912 by Robert Cromie as The Vancouver
Sun "to consistently advocate the principles
of Liberalism." In 1917 it acquired the Vancouver
Daily News-Advertiser (est 1886) and The
Evening World (est 1888) in 1924, overtaking rival
The Vancouver Daily Province in the 1950s. The
Cromie family relinquished control to FP Publications
Ltd in 1963. Southam acquired the Sun in 1980.
The Edmonton Journal was founded as The Evening
Journal by John Macpherson, Arthur Moore and John
Cunningham in 1903. Control passed to J.H. Woods, owner
of The Lethbridge News, in 1909 before the Southams
gained a dominant interest in 1912.
studies
There are no major biographies of Asper or studies of
CanWest. A profile is provided in Gordon Pitts' Kings
of Convergence (Toronto: Doubleday 2002). There is
a sharply negative portrayal of the Aspers in Chris Cobb's
Ego & Ink: The Inside Story of Canada's National
Newspaper War (Toronto: McClelland & Stewart
2004) and in Steven Kimber's 'In the wonderful world of
Iz, it's 1984 all over again' in Silenced: International
Journalists Expose Media Censorship (Amherst: Prometheus
2005) edited by David Dadge.
A perspective is provided by Susan Gittins' CTV - The
Television Wars (Toronto: Stoddart 2001). Perspectives
on the newspaper chain are provided by
Leaving Readers Behind: The Age of Corporate Newspapering
(Fayetteville: Uni of Arkansas Press 2001) edited
by Gene Roberts, Thomas Kunkel & Charles Layton and
The Menace of the Corporate Newspaper: Fact or Fiction?
(Ames: Iowa State Uni Press 1996) by David Demers.
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