CanWest Global Communications Corporation, a media giant that runs outlets like Global, The National Post, Financial Post Business and a slurry of other channels, radio stations, papers and magazines, filed for bankruptcy on Oct.08, 2009.
The company had managed to rack up a debt of over 4.2 billion. Finally the collapse happened when it was not able to pay the interest amounts on its bonds, and asset sales were not enough to pay the enormous debt any longer. 1
So most people may be asking, what does this mean for me and watching House? Well absolutely nothing (but you should check your priorities). CanWest fortunately managed to file itself under the Companies' Creditors Arrangement Act, and as such will continue to operate under the federal bankruptcy protection law. 2 That means, Global will still run as usual, as will subsidiary networks like Food, or HGTV; for now at least.
The possibility that CanWest may eventually have to liquidate its assets is a strong one, and workers are beginning to get antsy about their positions under the wide spread wings of the crumbling empire. After all, the company had already cut 560 jobs nationwide just last year, in order to avoid this dire fate. 3 What would stop it from cutting another large percentage of the fat in order to keep up with the bills.
Despite the fact that the future looks grim for this corporation, some feel that this might be a good thing for the media. CanWest owned a large percentage of not only Canadian Media, but they were large share holders in countries like Australia, having a strong hold (50% to be exact) on Australia's Ten Network. Although, due to the bankruptcy file, CanWest's bankers forced the company to sell its share for $680 million.
The general feeling is that if CanWest does end up having to liquidate its assets, like the Food Network, or the National Post, it will be the end of any one media corporation controlling large percentages of Canadian media and networks.
Conrad Black, original CEO of CanWest who was arrested for fraud, stated in an e-mail recently that he felt CanWest was too aggressive, acquiring stocks that "didn't yield operating income" 1
It is entirely possible that CanWest was becoming a little to egotistical in its own success, and the purchases of shares in these companies that were still unsure, became their immediate downfall.
Despite the fact that the new CEO Leonard Asper, feels optimistic about his company's future, he should still consider the possibility of liquidating his assets while their payoff is still high.
Already companies like Rogers Media Inc, Astral Media, and Corus Entertainment, are circling CanWest like sharks to the smell of blood. President and chief executive of Rogers Media, Tony Viner, has stated that he would be very interested in buying some of CanWest's channels like Slice, History Channel and HGTV. 4
Whatever the company decides, it had better make the decision quick. Recession woes are not looking any greater at the moment, and it may not be long before the public decides to cut the fat on their television bills by beginning to cancel these specialty channels that CanWest offers on satellite and digital cable services.
Bringing you the sludge from the mop bucket and the writing on the stall wall,
The Janitor
References
1 (Friday, October 9th, 2009). The Sydney Morning Herald. CanWest's woes are nothing to do with me, says Black.
Retrieved Tuesday, October 13th, 2009, from http://www.smh.com.au/business/canwests-woes-are-nothing-to-do-with-me-says-black-20091008-goym.html
2 (Wednesday, October 7th, 2009) The Toronto Star. CanWest empire crumbles.
Retrieved Tuesday, October 13th, 2009, from http://www.thestar.com/business/companies/canwest/article
/706530--canwest-empire-crumbles
3 (Wednesday, November 12th, 2008). CBC News. Slowing economy forces reductions at entertainment channels,
community papers.
Retrieved Tuesday, October 13th, 2009, from http://www.cbc.ca/money/story/2008/11/12/canwest-cuts.html
4 (Friday, February 20th, 2009). The Toronto Star. Buyers eyeing CanWest: Analysts.
Retrieved Tuesday, October 13th, 2009, from http://www.thestar.com/Business/article/590631
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