Thursday, October 08, 2009

Canwest, Natty Post, CBC ... and Goldman Sachs

Canada's largest media company, Canwest Global Communications, aka AsperMedia, filed for bankruptcy protection on Tuesday in a deal that essentially would hand control to its US creditors :
"Canwest reached a deal with a key group of lenders - mainly U.S. and foreign distressed funds that own most of the company's bonds - which will give them control of most of the restructured media company. Current shareholders would own just 2.3 per cent of the shares of the new Canwest, effectively wiping out most of their value."
The filing covers Global TV and the National Post but thus far not Canwest LP - Canwest's major daily newspapers across Canada - or its 15 money-making tv specialty channels whose profit rose 41% to $53-million in the most recent quarter over last year.

In January 2007, Goldman Sachs - this Goldman Sachs - bankrolled 64% of Leonard Asper's purchase of of 13 Alliance Atlantis specialty TV channels :
"a level far above Canadian foreign media ownership limits. However the CRTC approved the deal after the partners persuaded it that Canwest - not its giant Wall Street financial partner - would have effective operating control of the TV channels."
On the other hand, as the G&M Investor blog Streetwise reported yesterday (italics mine):

"Financiers working with Goldman said that over the past year, the investment bank put forward programming ideas for the TV networks, and offered strategic advice on restructuring, but was ignored by CanWest management and its creditors.

One concept that’s been tossed around, but couldn’t move forward until CanWest recapitalization was set, would see Goldman Sachs provide programming and financial support to the conventional television network as part of a larger deal that reworks the entire ownership structure to more closely align all the TV holdings.

There are three hedge funds driving the CanWest restructuring, and two of them are U.S. money managers: GoldenTree Asset Management, Beach Point Capital Management, along with Toronto-based West Face Capital Inc. ... These funds are also Goldman Sachs clients."

So, CRTC, you still good with this?
Goldman Sachs was not supposed to interfere with the programmimg of the Food Network but now expects to "provide programming and financial support" to local TV news stations?

More complications : The National Post - which never misses a chance to slag the CBC - and the CBC are now sharing content :
"The Post [will] republish CBC sports stories in the online National Post and sometimes in the newspaper. The CBC will run daily financial stories and podcasts from the Financial Post in’s Money section."
Translation : the publicly funded CBC will move further right as promised to run corporate news daily, while the privately owned Natty Post will now be partly funded by our tax dollars.

And those remaining 12 national and 26 community Canwest papers?
Paul Godfrey, CEO of the National Post, says he has found backers for a buyout of them.
Who will own what we think now?


Jon Dursi said...

The CRTC really needs to be disbanded and rebuilt from scratch.

As to this:
''The CBC will run daily financial stories and podcasts from the Financial Post in’s Money section.
Translation : the publicly funded CBC will move further right as promised to run corporate news daily''

I've seen a bit of worry about this in the blogosphere, but I'm actually pretty sanguine about it.

The National Post, like the Wall Street Journal in the States, actually has a pretty reality-based business section, despite the batshit-crazy editorial pages or reporting on politics or political issues (like anything Lorne Gunter has to say about climate change). The difference is that the NPs readership actually need reality-based business news to make real choices about making money; whereas when it comes to politics or other issues they're free to indulge in pleasing fantasies.

West End Bob said...

GREAT job, Lady Alison! I suggest you cross-post in beaverland, too. Get blanket coverage out there . . . .

Antonia Z said...

Excellent post.

Alison said...

Jon : Point taken. I guess I'm anticipating a further blending in the future. Biz pages are a category of editorializing in their own right.

Bob : Did it!

Antonia : Ah the tales you could tell if only you could...

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