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Canwest Global Communications Corp.

Company type	Public (TSX: CGS) (TSX: CGS.A)
Industry	Communications Media Services
Founded	1974
Founder	Israel H. Asper
Headquarters	Winnipeg, MB, Canada
Area served	Worldwide
Key people	Derek H. Burney (Chairman of the Board) Leonard J. Asper (President), (CEO) & (Director)
Products	Publishing Broadcasting Advertising
Revenue	C$ 3.145 billion (2008)
Operating income	C$ -1.045 billion (2008)
Net income	C$ -1.040 billion (2008)
Total assets	C$ 6.514 billion (2008)
Total equity	C$ 567.23 million (2008)
Number of employees	12,072 (May 2009)
Website	Canwest.com

Canwest Global Communications Corp. (TSX: CGS, TSX: CGS.A), operating under the corporate brand Canwest, is one of Canada's largest international media companies. The company's head office is situated in Winnipeg, Manitoba at Canwest Place.

Since October 2009, the company has been operating under creditor protection as part of the process to recapitalize the company.

Operations

Canwest owns, in whole or part, a variety of Canadian media assets, including:

• Global Television Network, a Canadian television network which reaches over 94% of the English-speaking population of Canada;
• specialty services including Showcase, Slice, HGTV Canada, TVtropolis and various digital services;
• the former Southam newspaper chain, which includes the number-two national newspaper National Post, the broadsheet daily newspapers in most major markets, several other smaller newspapers, and the Canwest News Service newswire. Canwest is Canada's largest newspaper publisher;
• production, distribution, and Internet assets such as Canwest Entertainment and canada.com, one of Canada's largest Internet portals;

History

In 1974, a group led by Israel Asper bought the assets of Pembina, North Dakota television station KCND-TV, moving the station to Winnipeg as independent station CKND-TV. Asper, through his company Canwest, eventually bought out his partners in the Winnipeg station, and subsequently invested in or acquired other independent TV stations across Canada, including an Ontario station known as the "Global Television Network". This brand was extended to Canwest stations throughout the country in 1997. Throughout the 1990s, Global (and its antecedents) held Canadian rights to hit U.S. series such as Cheers, Friends, and Frasier, making it the top-rated programming service in major markets like Toronto and Vancouver.

Seeking to become a global media power on par with the likes of Time Warner and Viacom, Canwest also bought broadcasting assets internationally, including outlets in New Zealand, the Republic of Ireland, and Australia, although all were eventually sold off.

Lacking a presence in Alberta, the company also went on an extended takeover pursuit of Western International Communications, which owned several independent stations in that province, in the late 1990s, eventually securing that company's broadcast television assets in 2000. This not only boosted Global's coverage in western Canada, but prompted the establishment of a second over-the-air service, originally known as CH, since in some areas the combined company had duplicate over-the-air coverage through multiple stations.

Later that year, Canwest announced its acquisition of the Southam newspaper chain from Conrad Black, in order to pursue a media convergence strategy. Canwest executives mused aloud that a single reporter could file stories for newspapers, TV, and the Web, but media regulations enacted soon thereafter prevented the company from achieving such efficiencies.

Canwest was initially slow to invest in specialty channels due to the strength of its terrestrial network. In 1999, seeking to change this, the company announced a deal to buy out the Canadian partners of NetStar Communications, owner of TSN, but was stymied by U.S. partner ESPN, which had veto power over such a sale. ESPN instead came to terms with Canwest's main rival CTV, a longtime business partner of ESPN's parent company Disney, as an acceptable buyer, which the selling partners eventually agreed to.

The company would not gain a large stable of wide-distribution specialty channels until 2007, when Canwest and Goldman Sachs announced they would jointly acquire Canadian producer and broadcaster Alliance Atlantis Communications. Under the deal, Canwest took control of the broadcasting portion of AAC, although Goldman Sachs remained a major investor in those assets. Goldman retained or resold the remaining pieces of AAC, the distribution arm soon re-emerging as Alliance Films.

Restructuring and creditor protection

A concern in the CanWest restructuring is the Aspers owe inheritance taxes to Revenue Canada; These overdue tax liabilities become almost ziltch, if CanWest restructured. Concern that the amount of debt being swapped for 97.5% of CanWest shares, is only a few hundred million; obvioulsy, CanWest's Canada news disclosure network monopoly, regulating political and government business disclosure for the Canadian multi-trillion dolllar economy, is worth more than a few hundred million; others would like to make offers that exceed the bondholders amount of debt for share swap; but Canada's news monopoly is not for sale.

Canwest's various acquisitions took a significant financial toll. By early 2009, it became clear the company's debt was not manageable in light of the global economic crisis, forcing Canwest into an extended set of negotiations with its lenders and a series of cost-cutting moves.

On August 31, 2009, Canwest shut down its secondary system E! (the former CH). Three of the former E! owned-and-operated stations – CHCH Hamilton, CHEK Victoria, and CJNT Montreal – were sold to third parties, while a fourth, CHBC Kelowna, was converted to a Global station. The remaining station, CHCA Red Deer, was closed as of the same date.

On September 24, the company announced that it would sell its 50.1% stake in Ten Network Holdings for A$680 million dollars, in order to pay down its significant debt. The sale was slated to be completed on October 1.

On October 6, the company announced it had agreed to a recapitalization transaction with some of its lenders, which will likely require the approval of the Canadian Radio-television and Telecommunications Commission (CRTC). When completed, creditors – led by hedge funds West Face Capital, GoldenTree Asset Management, and Beach Point Capital Management – will own a majority of shares, leaving existing shareholders, including the Asper family, with a total of 2.3% of the "new" Canwest. However, the Aspers are expected to invest a further $15 million in the restructured entity.

As part of the transaction, Canwest and some of its subsidiaries, including Canwest Media Inc., The National Post Company, and Canwest Television LP (the licensee of Global, MovieTime, DejaView, and Fox Sports World Canada) filed for creditor protection under the Companies’ Creditors Arrangement Act. Canwest Limited Partnership, a subsidiary which owns the company's other newspaper assets and online properties, is negotiating separately with creditors, and is expected to file for creditor protection at a later date. Specialty channels operated in partnership with other companies (such as TVtropolis, Mystery TV, MenTV, and the former Alliance Atlantis properties) are also not included in the present filing. Canwest shares were also suspended from trading on the TSX.

Canwest is not being liquidated at this time, and the company currently insists that the restructuring will make Canwest "a stronger industry competitor with a renewed financial outlook." Nevertheless, some analysts expect that the conglomerate will sell assets or be broken up entirely as the restructuring process continues, in part because the publishing division has a separate set of lenders.

Corporate governance

Board of directors

Current members of the board of directors of the company are: David Drybrough, Leonard Asper, David Asper, Gail Asper, Lloyd Barber, Derek Burney, Robert Daniels, Paul Godfrey, Frank King, and Lisa Pankratz.

Former members of the board of directors of the company include: Izzy Asper and Frank McKenna.

Concentration of power

Canwest is often cited as an example of how the ownership of Canadian media has become concentrated in the hands of a few individuals and large corporations. Canwest founder Izzy Asper was known as a strong supporter of both Canada's Liberal Party and Israel's right-wing Likud party, and of many laissez-faire policies in both countries. Observers have suggested that Asper's political views have had a significant impact on news coverage at CanWest media outlets. For example, in 2002, Ottawa Citizen publisher Russell Mills was fired by Canwest after the paper published a series of articles exposing a financial scandal involving then Prime Minister Jean Chrétien.

Canwest's power in the marketplace is reflected in a new contract that freelance contributors must sign. Until recently, standard industry practise was that freelancers sold the rights for one time use and only in Canada.

Editorial controversies

Since the 2000 acquisition of the major former Canadian newspaper holdings of Conrad Black's Hollinger International (now Sun-Times Media Group), including Canwest News Service, opposition has been expressed by some journalists, union spokespersons, politicians, and pundits about Canwest's enforcement of its corporate editorial positions. A 2001 decision to run regular uniform national editorials in all metropolitan dailies (except National Post), whereby local editorial boards could not take local positions on subjects of national editorials, ignited major national controversy and was subsequently withdrawn.

Conflict over Canwest editorial control and policy has focused in particular on three issues:

• The Liberal Party of Canada. Since Israel Asper's leadership of the Manitoba Liberal Party, the Asper family has been identified with Liberal politics and politicians. In July 2001, Southam national affairs columnist Lawrence Martin was fired after a column of his critical of Liberal Prime Minister Jean Chrétien was not published. Russell Mills, longtime publisher of The Ottawa Citizen, was fired in June 2002 after the newspaper called on Chrétien to resign. However, as of 2006, at least one Asper family member (David Asper) is now publicly supporting the Conservatives.
• The government of Israel and conflict in the Middle East. Veteran Montreal Gazette reporter Bill Marsden has said that the Aspers "do not want any criticism of Israel. We do not run in our newspaper op-ed pieces that express criticism of Israel and what it is doing." A study released in 2006 by the Near East Cultural and Educational Foundation of Canada found that the National Post was 83.3 times more likely to report an Israeli child’s death than a Palestinian child’s death in its news articles’ headlines or first paragraphs. In 2008 Canwest launched a lawsuit against the Palestine Media Collective for producing a newspaper parody of The Vancouver Sun that satirized this bias. In 2004, the Reuters news agency protested after Canwest altered newswire stories about the Iraq war and the Israeli-Palestinian conflict, such that Reuters felt it had inserted Canwest's own bias under Reuters bylines. The changes were apparently made in accordance with a Canwest policy to label certain groups as terrorists.
• Canwest editorial control and management itself. In December 2001, 77 staff members at The Montreal Gazette signed a letter and launched a web page, Media Giant Silences Local Voices: Canadian Journalism Under Attack, opposing the national editorial policy, and the reporters among them participated in a byline strike, refusing to sign their names to their stories in the newspaper in protest. Management responded with a gag order. The next year, several journalists left The Halifax Daily News over similar conflicts, and ten journalists at The Regina Leader-Post were reprimanded or suspended after a byline strike to protest censorship of coverage of a speech in Regina by Toronto Star columnist and Canwest critic Haroon Siddiqui.

Upon acquiring Southam's Newspapers from Hollinger International, Israel Asper continued Conrad Black's policy of 'blacklisting' influential Canadian world and military affairs journalist Gwynne Dyer's internationally published articles. This antipathy was prompted by Dyer's views on conflict in the Middle East and his opposition to neoconservatism, which run contrary to the ideological views of Asper and others on Canwest's board of directors then and today. Partially as a response to this, Dyer published a collection of his articles on the Middle East and related topics called With Every Mistake in 2005.

Canwest newspapers and broadcast outlets in British Columbia are regularly criticized for giving a "free ride" to the BC Liberal government of Premier Gordon Campbell, especially in relation to the scandals and controversies ensuing from the privatization of BC Rail but also in cooperating with the government's manipulation of information for political purposes, such as the suppression of the actual scale of the deficit or welfare rates in advance of the 2009 election. Conversely, coverage of the New Democratic Party is criticized as being unfairly negative. Canwest is one of the major campaign contributors to the BC Liberal party and gives regular column space to pundits from the conservative libertarian think tank, the Fraser Institute (one such regular contributor being the Premier's brother, Michael).

References

1. ^ Canwest holding company to file for protection, Global News, 2009-10-06
2. Canwest reaches agreement with members of the ad hoc committee of 8% noteholders with respect to a recapitalization, Canwest press release, 2009-10-06
3. "CTV AND ESPN AGREE TO BUY CONTROL OF NETSTAR", The New York Times, 6 February 1999
4. Wall Street Journal, CanWest Sells Ten Network Stake For A$680M, SEPTEMBER 24, 2009, http://online.wsj.com/article/BT-CO-20090924-701384.html
5. Canwest to sell stake in Australian broadcaster, Associated Press, 2009-09-24, accessed 2009-10-08
6. ^ Grant Robertson and Andrew Willis, "The Asper dream ends, the selloff begins", The Globe and Mail, 2009-09-07
7. Canwest gets court protection from creditors, CBC News, 2009-10-06
8. "Izzy Asper Biography". Retrieved 2009-05-01.
9. "Harper promises Toronto a place in government". CBC News. 2006-01-18. Retrieved 2009-01-23. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
11. ^ "Canwest huffs and puffs while free speech burns". The Georgia Straight. July 17, 2008. Retrieved 2009-04-14.
12. Media Giant Silences Local Voices: Canadian Journalism Under Attack (Internet Archive version dated Feb 13, 2002)
13. The Legislature Raids blog
14. Bill Tieleman (blog)
15. "Is Gordon Campbell a 'made man'?", from Republic of East Vancouver (online newspaper)

External links

• Canwest website
• Who Owns What: CanWest Global Communications (Columbia Journalism Review)
• Focus on CanWest (TNG Canada/CWA)
• CanWest Global International Holdings
• CRTC chart of CanWest Global Communications' assets (PDF)

• Companies based in Winnipeg
• Canwest
• Television broadcasting companies of Canada
• Newspaper companies of Canada
• Multinational companies