This story from today's Toronto Star — the story quotes several investment analysts saying Canwest shares are now 'worthless.' You can read it online here. The article quotes an analyst from National Bank Financial saying, "We see no compelling reason to own, let alone buy Canwest shares, which we would continue to avoid."
Some stats on Canwest's media empire, based in Manitoba: The company recently posted a net loss of $1.44 billion. This amount included $1.19 billion from Canwest's publishing operations. Their total debt load is about $3.7 billion, some of which dates back to newspaper acquisitions made in the early 2000's. Canwest publishes 13 city dailies, 126 community newspapers, and has television and Internet assets to boot.
So far, the corporation has been negotiating with the banks, which lend the troubled media empire the cash it needs to keep its' head above water. But Canwest has a repayment deadline this Tuesday, by which it must repay $30.4 million U.S. in interest, or open itself to demands for $761 million in 'outstanding principle,' according to the Star article.
My guess is that Canwest won't be able to meet the deadline. And if this happens the corporate bigwigs will either, a) plead for more time on the interest repayments or, b) start firing employees to cut down on expenses and free up cash. Of course, Option B would likely result in the further gutting of staff at Canwest owned newspapers and television stations.
From the rumours I hear, the National Post, Canwest's flagship paper in Canada, is already running on a skeleton staff. Could the Post be the first national paper in Canada to be a casualty of the recession? (If I had money to put down, I'd like to wager the ultra right-wing Toronto Sun will be first to go down for the count)
The story about Canwest's 'worthless' shares certainly makes me think about how the face of Canadian media will change before the economy bounces back. Maybe a broken nose here, or a clipped-off ear there, a la Picasso? Will Canada's three major national dailies (Toronto Star, National Post, Globe and Mail) survive the downturn?
As the Star article points out, the recession continues to depress advertising markets. Of course, advertising is what keeps media corporations in the black (or doesn't), and starving a television station or newspaper of advertising dollars is akin to choking off a person's air supply.
Even now, the decreased supply of ad revenues is doing damage. I've already seen it — Exhibit A being the Globe's slimmed-down sections. And a recent issue of Maclean's magazine featured an advertisement on the cover, front and centre! It was one of those peel-and-look jobs, the kind you sometimes see in high-end fashion magazines for perfume. I'd sure like to know how much Maclean's got for renting out their front lawn to an advertiser. The Star has done something I find comparatively depressing by sometimes placing ads that fold out over half the front page of the paper, obscuring the very headlines that make readers want to pick up a copy!
Canadian newspapers, magazines and television stations need to find new sources of revenue to survive the recession, no ifs, ands or buts.
Interesting examples of alternative means of supporting news organizations include Pink Triangle Press (PTP), which publishes the Xtra! tabloids in Toronto, Vancouver and Ottawa, as well as The Guide, a travel magazine, and Fab Magazine in Toronto. PTP makes most of its' money through press-owned phone sex lines Cruiseline and Squirt, and is a not-for-profit corporation. I think mainstream news organizations should start looking at the benefits (and downsides) of this kind of business model.
On another note, I can't seem to get Fleetwood Mac's 'Go Your Own Way' out of my head these days. Besides being just a kick-ass song, the lyrics seem to promote a spirit of individuality, and a sense of possibility, all neatly tied together with a wonderful, bittersweet chorus. This may end up being my anthem for 2009.
Here's my favourite version on YouTube, from the band's 1997 tour. (I particularly like the harmonized singing from 1:46 — 2:14)
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