More tonight on the future of the CanWest stable of newspapers. The creditors are going to attempt to get as much value out of the assets as they can and that means trying to keep the chain together. You can see how that business judgment could stand in the way of a dilution of concentrated media ownership in this country. It's not surprising though, Scotiabank and other creditors are not in it for anything but their return at this point.
The best way to preserve the value and revenue of CanWest LP is to keep the papers together as a national chain, according to the sources at Scotiabank and CanWest LP. The alternative would be busting up CanWest LP, which is also home to 26 community papers, and attempting to sell each property to regional publishers in the midst of a recession.Chris Waddell from Carleton University's journalism school weighs in:
“There's a value to being able to deliver a national, one-stop advertising presence to national advertisers like Coca-Cola or the car companies, and creditors recognize that value,” said one adviser to CanWest LP.
That business logic is expected to see ownership of the National Post newspaper, currently held by parent CanWest Global, transferred into CanWest LP to give the chain a newspaper in Toronto. The newspaper company has also cut costs by combining operations at its various papers, and those synergies could be lost if the chain is broken up.
Sources say creditors are willing to back the newspapers through an expected economic rebound, with an eye toward getting their loans paid back through an initial public offering of CanWest LP that could come late in 2010.
"...this isn't a great time for selling media properties. No one would give you a very high valuation on them, so you are likely not to get as much money as you might like for them," Waddell said.We'll see how this plays out, long way to go until it does.
But this might not be bad for Canadian journalism, he added, since the result may be a return to locally owned newspapers. "There are a lot of arguments for why that would be a good thing for the media ... for competition and everyone else."
Update (Thursday a.m.): From Toronto Star's David Olive yesterday, this interesting note:
Torstar Corp., owner of this newspaper, is a rumoured buyer for some dailies.