Over the past week, I’ve had people ask me about Canwest’s financial situation. Are they selling their assets? Will there be an auction? Is Paul Godfrey buying the newspapers? Are executives getting huge bonuses? Was Leonard Asper to blame? Did the company not do enough to reduce its debt? Does ScotiaBank own the newspapers now? Are people being fired and losing severance? Will pensions be worthless? Is this somehow Conrad Black’s fault? Will Global TV be owned by Americans? Can the newspapers survive? Will this affect programming? Will Leonard Asper get thrown out?
I wish I could tell you I knew the answers to these questions, as I am an employee of a Canwest newspaper, but the reality is that I don’t know any more than you do. Canwest is a publicly-traded company (okay, it was a publicly-traded company), and as such anything at those upper levels has to be divulged to shareholders (via press releases) before it’s told to the company’s thousands of front-line employees. So I don’t know any more than what’s been reported through those releases and in the media. Neither does my boss. Neither does my boss’s boss.
So everything is out there. CBC does a pretty good job of explaining the issues (and getting the facts right). Or you can get it from the horse’s mouth on Canwest’s public restructuring info page, complete with video of Leonard Asper.
For those too lazy to read everything, these are the facts as I’ve been told them from the company (and has been publicly released):
- The company that filed for creditor protection is called Canwest Media Inc. It owns the National Post, the Global Television Network, three cable channels (DejaView, Fox Sports World, and MovieTime) and the corporate office. You can see a diagram here (PDF). Canwest Limited Partnership is the company that owns the other newspapers (including my employer The Gazette), and the former Alliance Atlantis channels are owned by CW Media, which as its own structure. Neither those companies nor the parent company Canwest Global Communications Corp. has filed for creditor protection.
- Nothing has changed at the operational level, either on the affected side or the non-affected side. There’s obviously a lot of concern among those inside and outside the company (and that might affect things like advertising contracts), but nothing has been shut down. Employees are still getting paid, and invoices are still being processed.
- Other than the National Post Company being transferred from the Canwest Media side to the Canwest LP side (to join the other newspapers), there has been no official word on the sale or reconfiguration of any assets.
- The creditor protection filing comes with a pre-packaged deal with 70% of some class of creditors (I’m not a business expert here, read the stories if you care), so it is expected to go through this credit-for-equity swap relatively painlessly. Negotiating this deal (and the sale of Australia’s Network Ten) is why the company has gotten extension after extension on debt-related deadlines over the past few months.
- Canwest LP (the newspaper side) still has a lot of debt (about $1 billion) of its own, which means there will be some restructuring on that side as well. There has been no word on whether a creditor protection filing would be part of that.
- The television networks and newspapers are still profitable, and no matter what happens to Canwest they are expected to survive.
Admittedly, I’m drinking the company Kool-Aid here. Some of these things may change, or they might not. Everything we know for sure has already been released.
It would be easy for me to speculate on possible avenues here, but the Globe and Mail, Toronto Star and others are perfectly content to do that with their anonymous sources, and they’re probably in a better position than me to do so. Maybe what they say is true, maybe it’s not. I don’t know any more than you do, and it would be irresponsible and counter-productive to make wild guesses about the future of this media giant.
Go ahead and make up your own theories. But just remember there are thousands of families who depend on Canwest properties to put food on the table.