CanWest Broadcasting and Publishing Assets Divvied Up

By the fall 2010, the broadcasting and publishing assets of CanWest Global will be divvied up and emerge from bankruptcy protection under new owners.

CanWest's conventional television and specialty stations were purchased by Shaw Communications for $2 billion according to the CanWest media release of May 3, 2010. The deal, which will allow CanWest to emerge from bankruptcy protection from creditors likely by August, 2010, is for 11 Global TV stations across Canada and a stable of highly profitable specialty channels, including HGTV, Food Network and Showcase. The purchase gives Shaw the ability to monetize the free distribution of programming online as well as through smart phones and wireless devices. The Canwest broadcasting assets will be treated as a subsidiary of Shaw after the deal closes. Paul Robertson, president of Corus Television, head of YTV and former president of CTV, will head up the new division.

CanWest’s newspapers and online publishing assets were purchased by a group of unsecured creditors headed by Paul Godfrey, National Post editor and former President of the Toronto Sun, for $1.1 billion. The 46 newspapers include 11 dailies: the Victoria Times Colonist, the Vancouver Sun, the Vancouver Province, the Edmonton Journal, the Calgary Herald, the Saskatoon Star Phoenix, the Regina Leader-Post, the Windsor Star, the Ottawa Citizen and The Montreal Gazette and 35 community newspapers including Alberta weeklies The Bow Island 40 Mile County Commentator, Coaldale Sunny South News, Medicine Hat Prairie Post, Taber Times and Vauxhall Advance, as well as the online news website www.canada.com.

The closest rival in the bidding was Torstar, with financial backing from Fairfax Financial Holdings. Other bidders included BC newspaper publisher David Black and former CanWest CEO Leonard Asper. The issue that cinched the deal for the Godfrey-led bidding group was the requirement for $950 million of the offer in cash.

Canada’s largest chain of newspapers will operate as a new public company, which is expected to begin trading in the fall. More than 97% of the creditors approved the restructuring plan that was submitted in court on June 14, 2010. The plan is likely to be granted when the company is in court again on Friday, June 18. The target date for the new publishing company to emerge from bankruptcy protection is July 14. Plans are to raise capital through a public offering soon thereafter. Because 75% of the unsecured lenders are not Canadian, the share offering will involve two classes of shares. Canadian companies will hold the voting shares in adherence of Canadian tax laws.

Dennis Skulsky, the President and CEO of CanWest Publishing from 2006 until his resignation in April 2010 and the announcement of his appointment of the President of the BC Lions, began his newspaper career thirty years ago as the Circulation Manager of the Edmonton Journal.