Tag Archives: CanWest

Shaw to buy Canwest

February 12, 2010 – 2:17 pm| Posted in TV

The big change for one half of the Canwest empire now has a roadmap: Canwest announced this morning that Shaw Communications would buy a 20% equity interest and 80% controlling interest in Canwest Global once the company emerges from creditor protection.

Coverage at The Globe and Mail (of course, with analysis and more analysis), CBC, Reuters, Canadian Press, Wall Street Journal and Financial Post. Though financial terms won't be disclosed until after regulatory approval, Shaw is spending at least $65 million on this acquisition.

Canwest Limited Partnership, which owns the National Post, Montreal Gazette, Canada.com and other publishing assets, is unaffected by this. They will still be auctioned off as part of their restructuring.

Corus Cable Empire?

Assuming the deal goes through (and there's no big reason to believe it won't), the Shaw family will have control over a worryingly large number of specialty channels in Canada. They have a controlling interest in Corus Entertainment, a company spun off from Shaw to get around a CRTC rule about cable companies owning specialty services - a rule that no longer exists.

Corus owns or has a majority interest in (copy-pasted from Wikipedia):

It also has a 50% share with Astral of the Teletoon channels.

Canwest owns - and Shaw would get:

And the former Alliance Atlantis channels through a deal with Goldman Sachs:

Add to all this minority stakes in mentv, One, Historia and Séries +, and you've got a pretty huge specialty empire here, 31 channels. That would put it ahead of CTVglobemedia's 29 channels, and way ahead of other specialty players Astral Media (9 plus The Movie Network and Super Écran), Quebecor Media (8) and Rogers (6).

It should go without saying that the specialty assets - and not the Global Television Network - are why Shaw is interested in this acquisition.

The release says that Shaw would operate Canwest as a standalone company (instead of, say, just taking its assets and giving them to Corus), but you have to think that some sort of consolidation is going to happen if they can get it past the CRTC.

Another (albeit minor) question is what happens to the few conventional TV stations that Shaw and Corus own. Shaw owns CJBN in Kenora, Ont. (a station with the distinction of being Canada's lowest-powered non-repeater, at 178 Watts), which is currently a CTV affiliate. Corus, meanwhile, owns CKWS Kingston and CHEX Peterborough in eastern Ontario, both of which carry CBC programming. None of the three stations are in cities with Global stations, so it's conceivable they could all become Global affiliates or even sold to Canwest and become Global owned and operated stations.

Shaw's second chance to prove its point

My favourite part of this story comes out of a quote from Canwest chairman Derek Burney (emphasis mine): “We look forward to benefitting from Shaw’s participation in a reinvigorated Canwest, as it is a strong business partner with a proven commitment to the Canadian television broadcasting industry. This significant investment in conventional television should be seen as a big vote of confidence in the industry and its future.”

Of course, Shaw and Canwest have been on the opposite side of the ugly fee-for-carriage debate, with each side spouting half-truths at each other in a bid to scumsuck public support.

Remember those "cable company cash cows"? Funny how useful one of them has suddenly become now that the TV company needs a bailout.

But as much as this is ironic for the Local TV Matters people, it also forces Shaw to prove its point about how conventional television isn't in need of financial support from cable and satellite companies.

Last year, after Shaw sarcastically offered to buy three stations from CTV for $1, and CTV sarcastically accepted, it later pulled away from the deal, claiming that due dilligence showed the stations were hollowed out shells and work had been outsourced to other stations.

Shaw can't make that excuse this time. While many Global stations are little more than a newsroom, a couple of editing suites and a green screen, Shaw gets the broadcast centres that control them, and can do with them as they wish.

So will Shaw back down from its tough talk about fee for carriage? Will Canwest pull out of the Local TV Matters group, stuck in the same awkward position as CityTV and TVA where the parent company cares more about protecting cable profits than local television?

We'll find out within the next few months. (Though by the time Shaw's acquisition is final, the fee for carriage debate might be over.)

UPDATE: The Financial Post explores a big thorn in the side of this deal: Goldman Sachs, which is still fighting with Canwest over the company that owns the former Alliance Atlantis channels.

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Canwest study shows people like Canwest networks

February 12, 2010 – 1:00 pm| Posted in Opinion, TV

Canwest has released the results of a study that seeks to measure specialty television channels by quality rather than quantity of ratings. Instead of just pure viewer numbers, it seeks to rank networks by how attentive their viewers are, and how likely they are to pay attention to ads.

A cynic might notice that Canwest-owned networks, including Food Network, HGTV, History Television, Showcase (and its sister networks), National Geographic, Mystery TV and TVtropolis, improve their scores under this measurement. Under pure ratings, only one Canwest network (HGTV) comes in the top five, and only three (with History and Showcase) in the top 10. In the other metrics shown, Canwest networks have 2-3 of the top five and 4-6 of the top 10.

That cynic might wonder if Canwest would have released this study if Canwest-owned networks hadn't fared so well.

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Does “Special Information Feature” clearly mean “Advertisement”?

February 12, 2010 – 12:00 pm| Posted in Media, Opinion

The Sierra Club of Canada is complaining about a series that appeared in Canwest newspapers over the past few weeks sponsored by Shell Canada about the environment and the oil sands in Alberta. (The series also ran in the Toronto Star.)

Coverage by Canadian Press, Fast Forward Weekly, Marketing Magazine.

Shell ad in The Gazette last Saturday

Their complaint is that the advertisement, like most advertorials, tries to pass itself off as news. It's got headlines and sidebars just like a newspaper page. It's not obviously trying to sell anything, but instead is presenting information in a journalistic sense. And the word "advertisement" doesn't appear anywhere.

Instead, it's described as a "special Canwest information feature on climate change, in partnership with Shell Canada", lending Canwest's name (and, presumably, its journalistic integrity) to the advertorial.

What's interesting to me is that the Sierra Club isn't complaining to Canwest or to a press council or the Canadian Association of Journalists or Canadian Newspaper Association. Instead, they're complaining to Advertising Standards Canada.

In other words, they're not arguing that the newspaper acted unethically. They're arguing that the advertiser acted unethically, and they're appealing to the advertiser's code of ethics.

It really says something, I think, when an advertiser is expected to have better journalistic ethics than a major newspaper chain.

The Sierra Club's complaint is essentially one about labelling. It's not labelled as an advertisement or advertorial, but as a "special information feature", which could mean anything and isn't clear.

Canwest's response, to Canadian Press and others, is this:

Canwest communications director Phyllise Gelfand said the stories were printed in a different typeface and laid out in a different style than the rest of the paper. Shell's "partnership" was referred to at the top of the page.

"That's enough," she said. "The average reader would notice the difference."

I don't agree. I'm a (former) newspaper editor, and a media critic, and it's tough for me to understand sometimes what is editorial and what is advertising.

Advertisers and newspaper publishers have come up with all sorts of euphemisms to refer to advertorial content (the word "advertorial" itself, for one). Special information feature. Advertising feature. Marketing feature. Joint venture. Advertising section. Do any of these really clearly say "advertisement" to you, the average reader?

(And the argument about it being in a different typeface holds in print, but not online, where it looks like any other news story except for the byline and the Shell ad)

Of course, if clarity were the goal, it would just come out and say "advertisement". But the goal isn't clarity, it's confusion. It's for the advertiser to piggyback on the journalistic integrity of the publication and convince readers that the publication somehow endorses what's being said.

And newspapers are only to happy to comply, sacrificing their integrity bit by bit for short-term financial gain.

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More Canwest news

February 1, 2010 – 9:56 pm| Posted in Media

Since I'm now a former Canwest employee, I guess I don't have to include that disclaimer anymore.

Some tidbits of news since Canwest's newspaper arm filed for bankruptcy protection in early January:

The Financial Post, which is owned by Canwest and may be part of a sale (but which isn't under creditor protection) has a fair picture of what parties might be involved in this asset auction, with pros and cons for each. For most companies, the bottom line seems to be "not interested."

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Congratulations, you’re an unsecured Canwest creditor

January 22, 2010 – 11:01 pm| Posted in Business, Media

FTI Consulting, one of the groups of lawyers handling Canwest Limited Partnership's creditor protection filing, has a section on its website devoted to the proceedings. There you can find, among other things, a list of creditors (PDF).

They include, of interest to Montrealers and Gazette followers (in alphabetical order):

  • $253,808.16 to 1001 Dominion Square Management Inc., The Gazette's landlord
  • $12,726.14 to Agence France-Presse, a newswire
  • $406,505.42 to Amex for corporate credit cards
  • $6,556.34 to the Audit Bureau of Circulations
  • $47,497.80 to Bleu Blanc Rouge, which handles The Gazette's marketing campaigns
  • $5,213.38 to Bloomberg, another newswire
  • $114,700.77 to the Calgary Flames
  • $74,763.18 to Canada Post
  • $44,237.47 to Canadian Press (even though Canwest no longer uses CP) - listed separately as Canadian Press and The Canadian Press
  • $5,179.91 to CNW for press releases
  • $38,892.90 to Garda for security services
  • $24,035.10 to Getty Images
  • $1 million exactly to GWL Realty Advisors of Edmonton, the largest single non-bank creditor
  • $24,419.64 to Henry's photo shop
  • $44,100.00 to Ipsos Reid for surveys
  • $21,380.91 to La Presse
  • $22,575.00 to Kleintel, a Montreal-based phone survey company
  • $28,041.92 to Legacy.com, a partner for paid obituaries online
  • $10,450.00 to Loblaws
  • $12,167.94 to the Los Angeles Times - Washington Post, another news service
  • $16,558.62 to Messageries Dynamiques, a Quebecor-owned distribution company
  • $52,783.50 to Microsoft Canada
  • $145,026.49 to the Ministère du revenu du Québec
  • $8,475.66 to the National Newspaper Awards
  • $17,931.06 to Nestle Canada
  • $5,065.31 to New York Times Digital
  • $9,946.29 to the Ontario Press Council
  • $50,400.00 to Orsyp Logiciels, a Montreal-based job schedule software company
  • $90,000.00 to the Régie des alcools, des courses et des jeux
  • $72,930.38 to Rexall Sports Corporation, which owns the Edmonton Oilers
  • $37,153.20 to Rogers Media
  • $34,755.00 to Rogers Publishing
  • $11,841.84 to Saxotech Integrated Mediaware, which is providing a new desktop publishing system for Canwest papers
  • $331,160.57 to Service-Now.com, which ... well, it's anyone's guess what they actually do.
  • $70,987.96 to Sun Media
  • $15,813.11 to Montreal's Teleze Inc., a telemarketing company selling Gazette subscriptions
  • $87,499.65 to the Globe and Mail
  • $8,065.02 to New York Times Syndication, yet another news wire
  • $54,485.00 to the Salvation Army in Saskatoon
  • $145,341.3 to Toronto Star Syndication Services and Torstar Syndication Services
  • $10,773.90 to (Chicago) Tribune Media Services
  • $27,151.49 to United Way in Edmonton
  • $6,124.99 to the Winnipeg Free Press
  • $112,481.44 to the Workers' Compensation Board of British Columbia
  • $15,491.17 to World Entertainment News Network for celebrity gossip
  • $45,986.85 to three radio stations
  • $45,437.84 to four union locals

The list is very long, but two items stand out like a sore thumb because of the extra digits, and those are the ones that really matter in all this:

  • $78,382,191.78 to the syndicate of banks under the senior subordinate credit agreement
  • $449,411,375.34 to senior subordinated notes

That's (some of) the money Canwest LP owes the banks, and the reason it's in financial trouble.

What the list doesn't include, though, are freelancers, those independent contractors who provide stories and photos to newspapers in exchange for a negotiated fee. Most freelancers who did work between mid December and the Jan. 8 filing (and some who did work much earlier than that but weren't paid or didn't cash their cheques before the filing) are now grouped in with the paper suppliers, wire services, distributors and anyone else who provides goods and services to the newspapers and websites.

I counted two freelance columnists in The Gazette on the list through their companies:

  • $5,418.00 to L. Ian MacDonald's Lian Public Affairs Ltd.
  • $9,673.79 to Phil Reimer's Phil Reimer Communications. He's Canwest's travel cruise columnist

Other freelancers, including fine dining columnist Lesley Chesterman, are also out thousands of dollars as a result of this filing. Smaller freelancers (which may include myself, I'm still not sure yet) are out mere hundreds of dollars.

Whether they'll see any of that money owed depends on how much money is left to give to all the other creditors, and that will depend mostly on the sale price of Canwest LP. The banks have set a floor bid of $950 million, the amount they're owed for their loans (which means they wouldn't be paying for the chain but rather exchanging their debt for equity and ownership), but they're hoping someone will put in a higher bid. The higher the sale price, the more money can go to creditors. But there's little hope that the price will be high enough to pay 100 cents on the dollar.

That's very disappointing. The banks won't fold if they're out a few hundred million. The wire services aren't a few thousand dollars from bankruptcy. But some freelancers rely on it as their only source of income, and a few hundred dollars can be the difference between making a rent payment and having an angry landlord.

After Canwest LP filed for creditor protection (not to be confused with bankruptcy, which eliminates debt), it secured so-called debtor-in-posession financing, which allowed it to continue its business. This means that people who did freelance work after Jan. 8 will still get paid (along with other post-filing creditors), as publisher Alan Allnutt explained. That also puts many in a strange position of getting screwed out of payment but still continuing to do business with a company.

If only I understood business, it would all make sense to me.

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I, for one, welcome our new consortium overlords

January 18, 2010 – 5:35 pm| Posted in Business, In the news, Media, Montreal

Over the past few months, rumours had been circulating around the newsroom that some local rich guys were interested in buying a part of the Canwest newspaper chain, including The Gazette.

Today, those rumours prove true. A consortium led by Jerry Grafstein, Raymond Heard and Beryl Wajsman announced it will be submitting a bid to buy The Gazette, the Ottawa Citizen and the National Post, pending due dilligence.

The coverage - Toronto Star, Globe and Mail, CBC, Reuters, Editor & Publisher, Financial Post - all say the same thing, quoting liberally from the news release and saying the three consortium leaders believe in local control of local newspapers.

No price has been mentioned, nor are the other financial backers named.

All three have media cred: Grafstein, a recently retired senator, founded Citytv in Toronto. Heard was managing editor of the Montreal Star and then worked as news director at Global TV in the 80s. Wajsman is the editor of The Suburban and publisher of The Métropolitain. The Globe's Jane Taber has analysis of their political leanings, in case anyone really cares.

Unions (and unionized employees) look favourably at the central idea of this bid (Lise Lareau of the Canadian Media Guild calls it good news) because it seems to reject a lot of Canwest's anti-union moves, like centralization and outsourcing, and it's making all the right noises about local control of local newspapers.

There's also the unsaid implication that these three care more about respect than profit. (Like sports teams, media outlets tend to be more about ego than the bottom line.)

Looking at Wajsman's newspapers, there's at least some reason for optimism. The Suburban is big for a community paper, and while it's not pure as the white snow, it's not filled with press releases and it does actually employ journalists. The Métropolitain, meanwhile, is more of a think-tank than anything else, and is clearly not motivated by profit.

But looking at those newspapers also leaves some worried. Wajsman's editorials are a bit much for even some staunch federalists, and the papers have some clear editorial biases when it comes to things like the Israeli-Palestinian issue (something the Suburban doesn't have to deal with much but which The Gazette would have to deal with on a daily basis).

Many will also focus on Wajsman's political past. One person reminded me of his alleged connection to the adscam scandal, others have already created a Facebook group to protest his bid because of his pro-Israel, pro-business, anti-union stances.

Though I disagree with most of what he writes in Suburban editorials (and most of the opinions written in The Métropolitain), I'm tempted to ask how a right-wing, pro-Israel owner will somehow be different than Canwest. And if "progressive anglos" don't want their paper to fall in his hands, they're more than welcome to submit a bid of their own.

There are other obstacles to Grafstein and Co.'s plan, even if they have the money. The biggest is that Canwest (and the banks arranging for the chain's sale) want Canwest Publications sold as a unit. That centralized services include websites, customer service, advertising, page layout and Canwest News Service. Undoing that might be difficult and expensive (but it might also mean hiring more journalists, programmers and copy editors, which would clearly work in my favour).

And there might be other bids. The Globe is convinced Paul Godfrey is putting one together with his own financial backers. Other names being bandied about include Torstar, Quebecor, Transcontinenal, FP Newspapers and that guy Joe at the end of the bar.

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Newspapers for sale!

January 8, 2010 – 2:51 pm| Posted in In the news, Media

CFCF's Paul Karwatsky reports outside the Gazette building (after signing autographs for some teenage girls who happened to pass by)

It wasn't so much a question of whether, but when.

The hammer came down this morning, as Canwest Limited Partnership, the print and online side of the Canwest empire, joined the television arm in filing for creditor protection.

I can't really tell you more than has been published by the Globe and Mail (UPDATE: The Globe has more in its Saturday issue), the Toronto Star, BBC, ABC (Associated Press), Bloomberg, Canadian Press, Agence France-Presse, Reuters, QMI, UPI, CBC, CTV, CTV Montreal, Le Devoir, Rue Frontenac, the Wall Street Journal, the New York Times, the Financial Post or the Canwest press release.

The Star also has a copy of CEO Leonard Asper's memo to employees.

The gist of it is that the newspaper division (including the National Post, though it is not under this creditor protection filing) is up for sale, with the banks getting the ball rolling setting a floor bid. Unlike recent small-market TV station sales that were for a nominal amount, the newspaper chain is expected to fetch decent cash because most of the newspapers are still profitable.

The only question is who has a billion dollars to spare to scoop up an entire newspaper chain (because of how dependent they are on each other for content and services, Canwest is hoping to sell them off as a unit).

In the meantime, while about 50 former employees under salary continuance are getting screwed (none of these people are former Gazette employees), pensions, salaries and expenses continue as normal through a $25-million debtor-in-protection financing. This means employees (including me) still get paid as normal, freelancers still get their invoices processed, and suppliers still get paid for continuing operations. (UPDATE: Some freelancers are being affected by this filing, I'm now told, for bills between mid-December and the filing of Jan. 8.)

In Saturday's paper, Gazette published Alan Allnutt makes that clear: Operations continue as normal.

Wish I had more juicy details, but they don't trust me with that kind of information (would you?).

Read More »

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Oh yeah, that Canwest thing

October 8, 2009 – 2:44 am| Posted in Business, Media

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.

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God speed CHEK-TV

September 5, 2009 – 1:58 am| Posted in Opinion, TV

The tearful goodbyes were apparently premature...

When Canwest announced in February that it was putting its five "E!" network conventional television stations under "strategic review" - considered code for "sell them off or shut them down" - staff at one of those stations decided to take matters into their own hands.

Employees and fans of CHCH in Hamilton, Ont., began a campaign to save the station, and one of the ideas floating around was to have the employees and community pitch in to buy the station from Canwest and run it themselves.

Turns out that wasn't necessary. In June, a broadcaster most had never heard of called Channel Zero announced it was going to buy CHCH and CJNT in Montreal. It also promised that all the jobs would be kept and the station would increase its focus on local news. That sale got CRTC approval and became final just before the Aug. 31 deadline set by Canwest (based on the end dates of licenses for the stations).

More recently, when CHEK-TV in Victoria found out it wasn't going to be saved and would be closed down along with CHCA in Red Deer, Alta., staff there began a similar campaign. It actually got to the stage of submitting a $2.5 million bid to Canwest to buy the station, just a week before it was to be shut down. The money would come from staff and local investors who were committed to having a local voice on Vancouver Island.

The deal was rejected by Canwest as being insufficient. The sale price of the station wasn't the issue, they said, but investors would need to have enough money (about twice the amount offered) to cover early losses, which would be substantial because the station had no advertising sold after Aug. 31.

Over that last weekend of August, it looked like CHEK was gone for good. CHCA shut down on Monday morning, and CHEK was scheduled to go out after some special programming remembering the 53-year history of the station.

(The fifth E! station, CHBC Kelowna, was brought into the Global television network, an option not available to either CHEK or CHCA because of license restrictions that prevented them from carrying the same programming as Global stations in Vancouver and Calgary, respectively. It will operate as Global Okanagan, and with 11 fewer employees.)

But CHEK's employees weren't done. They submitted a revised bid, and Canwest agreed to keep the station on life support for an extra day. And another. And a few more.

Sold.

The news officially came just after the close of business on Friday, in the form of an internal memo to employees and a press release: Canwest had agreed to sell CHEK-TV to a group of local investors, led by the station's employees.

Coverage:

The actual price was nominal (the Globe and Mail has it at $2), but the important part is that the station's new owners would pay for any losses suffered while the station was awaiting CRTC approval of the sale.

That approval should come quickly, if the Channel Zero case is any indication. The move is a win-win-win. It makes Canwest look good (or at least less bad) compared to what would happen if they shut the station down (in all, Canwest says it saved 90% of the almost 300 employees at the five stations). It saves the jobs of CHEK's 45 employees (they're really happy about that part), and it keeps a local television station in Victoria (CTV's CIVI-TV, part of the A network, is the only other station indigenous to Vancouver Island).

But the tough part of this story is just beginning.

People buy money-losing TV stations with optimistic business plans only to see them go down the drain. And employees often think they can do a better job running a company if they just got those know-nothing managers out of the way.

The investors behind the CHEK bid say they have a solid business plan. Now we'll see if they can make it work. If they do, we could see lots of other small-market money-losing stations across the country try the same thing (or we'd see Canwest and CTV buy them back and change all of their stations to fit that working business model). If they don't, it'll make others think twice before trying a similar move.

I hope CHEK succeeds. I don't think the odds are in its favour, but I applaud them for trying.

Good luck CHEK. You'll need it.

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CRTC okays CJNT, CHCH purchase

August 28, 2009 – 9:31 pm| Posted in Montreal, TV

CJNT: SOLD!

The CRTC today approved the application from Channel Zero to purchase CJNT Montreal and CHCH Hamilton from Canwest.

You'll recall Channel Zero and Canwest announced in June that they'd reached a deal to purchase the money-losing stations. It was a win-win for both Canwest (which is in debt trouble - it announced today it has gotten another extension from its lenders) and the stations, who would have otherwise faced the fate of other stations in the E! network: shutdown.

CRTC approval of the deal was the only question mark - Channel Zero wanted some license changes as part of the deal. There was an expedited approval process, including a hearing on Monday - a week before existing licenses expire and Canwest runs out of programming to air.

The CJNT decision accepted the reasonable requests of Channel Zero, namely to relieve it of its requirement to air a minimum amount of French-language non-ethnic programming, and eliminate a requirement to make sure 25% of its films are Canadian. It will also be relieved of closed-captioning requirements until the fourth year of its license (and there is no requirement to closed-caption programming that is neither English nor French). CJNT is planning to keep all its ethnic programming (even slightly increasing its local ethnic programming requirement) and focusing its remaining schedule on ethnic music videos and other programming geared toward a younger audience.

For the CHCH decision, the CRTC got a promise (after a CTV intervention) that "local programming" would be that directed to the Hamilton/Niagara/Halton area, and that the station would not try to compete with local Toronto news stations. It accepted a request to relieve CHCH's mandate to acquire "priority" programming (Canadian dramas and other expensive-to-produce shows) since it would now be a stand-alone station and not part of a national network (this is consistent with CRTC policy). The plan for CHCH is to become all news all day, with popular revenue-generating movies in prime time.

Both stations officially become part of Channel Zero on Sept. 1, with licenses that expire on Aug. 31, 2016 (it's not clear how the handoff will happen - it won't be smooth if they want to try it literally over the weekend). Both will be required to switch to digital broadcasting on Aug. 31, 2011. And Channel Zero will be asked to re-appear before the commission in 2012 to discuss programming for both stations.

Quickie analysis: Today is a good day for the two stations, and for Montreal and Hamilton. Whether these business models are sustainable, though, is a whole other question.

In Victoria, the news isn't quite so happy. Despite a campaign from the 40 employees to buy CHEK Victoria from Canwest and run it themselves, Canwest said it wouldn't work and the station will shut down as scheduled on Aug. 31.

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$500,000? CHEK.

August 17, 2009 – 3:56 pm| Posted in Media, TV

It's an idea that seems to have gotten a lot of traction recently as the traditional media business model collapses and front-line journalists blame the problems mainly on management excess and poor business decisions: If the union and/or its members bought the company, they could solve all those problems and turn it into a profit-making enterprise.

It's the idea that the employees at CHCH in Hamilton had when it looked like owner Canwest might shut it down. But now that Channel Zero has offered to buy the station and maintain the local jobs and newsroom, that idea becomes moot.

At CHEK in Victoria, they weren't so lucky. Canwest couldn't find a buyer for it, nor could they convert it into a Global station because a condition of license prevents duplication with Vancouver's CHAN. So the plan is to have it shut down by the end of August.

Last week comes word that employees at CHEK (there are about 45 in all) are pooling their money in a bid to buy the station before it gets shut down. They've pledged more than $500,000 and are hoping to present the formal offer soon. That might be too late for Canwest though, since these kinds of transactions take months and there's a ticking clock.

If that fails, there's always the Facebook petition route. Two groups have been setup, the first with over 6,000 members.

More coverage:

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Mixed news at small Global, CTV stations

July 22, 2009 – 9:57 pm| Posted in TV

Canwest closes two, sells two, rebrands one

After putting the five conventional television stations comprising its secondary E! network (formerly CH) on the block for a "strategic review", the results are in:

Get the news from your favourite source:

The decisions mean the end to the E!/CH network.

CTV closes one, sells one, keeps one

Meanwhile, after Shaw backed away from buying three CTV stations for $1, there is similar mixed news at those stations:

This leaves six A-channel stations left, including CHWI and the cable-only Atlantic A network.

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Channel Zero offers to buy CJNT Montreal, CHCH Hamilton

June 30, 2009 – 5:53 pm| Posted in Montreal, TV

CJNT: SOLD!

The press releases came out Tuesday afternoon and has been rewritten everywhere: CP, Presse Canadienne, Reuters, Financial Post, CBC, Toronto Star, Hamilton Spectator, LesAffaires.com, Broadcaster Magazine.

Channel Zero (warning: website has sound you can't turn off), which owns Silver Screen Classics and Movieola, but also AOV Adult Movie Channel, XXX Action Clips Channel and Maleflixxx Television (latter three are Wikipedia links), has agreed to purchase two of Canwest's five E! stations, CJNT in Montreal and CHCH in Hamilton.

The sale, which is for an undisclosed price (but presumably better than the $1 a station that Shaw was offering in what apparently turned out to be a bluff) is contingent upon the usual CRTC rubber stamp, but also on Canwest wrestling a new deal out of unionized employees at CHCH that would switch from a defined-benefit pension plan to a defined-contribution pension plan eliminate the employee pension plan and replace it with a defined contribution plan, throwing retirees under the bus. (CJNT staff, a grand total of six, are not unionized.) According to my ears at CHCH, the station's staff are excited by the offer (except for the pension thing) and of the prospect for producing more local news.

Channel Zero has an FAQ posted on its website which actually does a pretty good job answering the kinds of questions this would prompt from skeptics like me. (They promise not to air adult material on either station, though ... would that be such a bad thing for CJNT?)

Programming

The plan for CHCH is to turn it into an all-news station during the day (5:30 am to 8 pm) with movies in the evening. This capitalizes on CHCH's unusually high local programming requirement of 36.5 hours per week, which Channel Zero has promised to maintain (it says it wants to keep license terms "substantially similar", which suggests some changes).

For CJNT, the plan is to air foreign-language movies and multicultural music videos. It's not clear if that means there will be fewer of the foreign-language talk shows that currently air, or if the celebrity gossip and second-rate U.S. imports will be cut off.

And the rest?

Even if the deal goes through, and that's a big if, the other three stations in the E! network, CHEK Victoria, CHBC Kelowna (B.C.) and CHCA Red Deer (Alta.) are still up in the air. Canwest has made it more clear that they won't keep the stations running after this summer, and if they can't find a buyer for them they'll be shut down.

But will it work?

CHCH News has an analysis of the deal and an interview with Channel Zero's Cal Millar, which both sound very positive. People say they want local news, and this company seems prepared to inject funding to create a new all-news station. But CHCH host Mark Hebscher insightfully compares this to Toronto One, which failed as a locally-focused station two years later became bottom-feeding Sun TV.

Call me a skeptic, but Channel Zero has zero experience in running conventional television stations and zero experience with local news. Taking on CHCH is a big challenge, and I think the company is being overly optimistic about its proposed business model, even with the cut to pension expenses. Two or three years down the road, we may very well see Channel Zero come back to the CRTC and ask for reductions in local programming requirements and other commitments as it starts bleeding money.

But, like CHCH employees and their union leaders, I hope I'm wrong.

UPDATE: The Hamilton Spectator is all over the sale with articles about the sale itself, reaction to it, and an opinion praising it.

UPDATE (July 18): Channel Zero tells the CRTC the price of the sale was $12, both stations included.

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Canwest gets another break

June 15, 2009 – 11:10 pm| Posted in Media

Like tonight's episode of House, the latest Canwest announcement is a repeat. That doesn't stop CBC, Reuters, CP, Variety and, of course, Canwest itself from writing stories about it.

The next date for our calendars is June 30, when this recapitalization plan will have to be figured out (or another deadline agreed on).

Meanwhile, my employer's employer is reportedly looking to save $20 million in labour costs through union concessions. It has sent letters to unions but says it isn't a done deal that they're officially making such requests. If they were, it would include managers like Dennis Skulsky (who is being given an honorary degree, by the way), but not Leonard Asper. Still, the unions aren't impressed.

The Gazette's union, the Montreal Newspaper Guild, says it "has received no communication of any kind, verbal or written, from Canwest or Gazette management requesting us to consider any salary or other concessions in our contractual relationship in any of our units."

The Gazette's editorial and reader sales departments have been without a contract since June 2008.

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Canwest: Still here

May 20, 2009 – 7:07 pm| Posted in Business, Media

Everyone expected there would be yet another extension in the Canwest interest payment saga, but the company that signs my paycheques also announced it has gotten another $175 million in financing, which is a good thing I think.

The reports from Reuters, the Globe and Mail, CBC, Canadian Press and the Financial Post use the same long business terms as the press release, like "senior secured revolving asset-based loan facility", but from what my business-challenged mind can gather, there's another deadline coming on June 15, when the company has to present a restructuring plan.

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Newspapers think newspapers have bright future ahead

May 3, 2009 – 1:01 am| Posted in Media

In case you missed it (you ungrateful non-newspaper-readers), the Financial Post and Canwest News Service ran a series this week on the future of newspapers, which unless you've been living under a rock recently you've noticed are in a bit of business trouble. But these writers know newspapers are better than those other media.

The series is in five parts:

  1. David Akin on the general state of the newspaper industry (which, in case you're wondering, does talk a bit about Canwest and its debt crisis)
  2. Akin on how advertisers are best served by the print medium and by newspaper publishers
  3. Akin on the difference between Canadian and U.S. newspapers (though you could just say we're a few years behind them on the death spiral)
  4. Randy Boswell on how newspapers are a trustworthy medium that other media rely on
  5. Kirk Lapointe with a very optimistic look at how newspapers are repositioning themselves as online destinations.

As part of the series, Canwest's newspapers were also encouraged to write about their individual histories and connections with their communities. The Gazette got young reporter Jason Magder to do a piece on the paper's connection with its community.

Other Canwest papers also wrote self-congratulatory pieces:

The National Post also asked its "opinion-makers" about their thoughts on newspapers:

As if underscoring how far newspapers have to go, in neither of the three above cases could I find one page linking all these related stories together.

Finally, unrelated to any of the above, Stuart McLean writes in the Globe and Mail about why he loves newspapers.

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Canwest argues for changes to Montreal TV stations

May 2, 2009 – 4:07 am| Posted in Montreal, TV

Appearing before the CRTC on Thursday, Canwest (my employer, you'll recall) made the case for license amendments at its two Montreal television stations, CKMI-TV (Global Quebec, which is actually licensed out of Quebec City but operates out of Montreal) and CJNT-TV (a former ethnic programming station which has since become half ethnic programming and half E! entertainment shows).

Here are some highlights from the transcript.

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National Post to stop printing Mondays this summer

April 29, 2009 – 5:24 pm| Posted in Media

Reuters reports that the National Post has decided to stop printing on Mondays for nine weeks this summer. The move is an effort to save money for the paper which has been bleeding money out of debt-ridden Canwest (my employer) since it launched a decade ago.

Canwest says the move will involve no layoffs. A digital edition, which looks identical to the print edition, will still be produced, CP says, meaning the stories will still be written and laid out, but simply won't be printed.

The Post already doesn't publish on Sundays, meaning important news that breaks on a Saturday morning will have to wait up to 72 hours before it's in the hands of readers.

Canwest has until May 5 to deal with its lenders (or get yet another extension).

UPDATE (May 2): The Post explains itself in a note to readers.

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Low on cash? Just ask the gummit

April 8, 2009 – 3:20 am| Posted in Opinion, TV

The federal government, apparently spooked enough by Canwest and CTVglobemedia's cries that the mediocalypse is here, is reportedly considering a $150-million fund that would help small-market television stations. This would be in addition to the Local Programming Improvement Fund which has the same goal.

As much as I'm not a fan of consumers paying for local TV stations they already get for free, even that would be preferable to a government bailout with who knows how many strings attached.

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Canwest gets another extension

April 7, 2009 – 9:49 pm| Posted in Media

Stop me if you've heard this one before: my employer Canwest got another extension on its bank debt deadline. So the waiver on certain borrowing conditions now lasts until April 21. But Canwest still has to make a $30.4-million interest payment by April 15 (the end of a month-long grace period), or bondholders could push the company into bankruptcy.

The Globe piece talks about the war between banks and bondholders (and why the latter might be better off giving Canwest more time), and also speculates (with unnamed sources) about potential sales of newspapers, either individually or as a group. (Anyone want to spend a couple of billion on a mostly-nationwide newspaper chain?)

See you next week.

UPDATE (April 9): $1.4-billion quarterly loss, though most of that is in the form of a non-cash writedown. I hope they don't take that out of my paycheck.

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