Revenue: $1.4 billion
Profit: $30.1 million
The parent company of the Global Television Network — one of two major private TV networks in Canada — undoubtedly thought it had scored a cross-media coup when it became the country’s largest newspaper publisher with the November 2000 purchase of most of the Canadian newspaper assets of Conrad Black’s Hollinger Group for C$3.2 billion ($2.05 billion). A newly bulked up CanWest posted revenues of $1.4 billion for fiscal 2001, which ended Aug. 31, more than double those of the previous year.
The deal took CanWest’s debt load to a stratospheric $2.6 billion, however, service of which pulled earnings on the year from $113.7 million in 2000 to $30.1 million in 2001. CanWest needed a strong economy to save the day.
Instead, it got Sept. 11 and the subsequent economic slowdown, which has left CanWest increasingly battered and bruised.
In its search for synergies and savings, CanWest has put noncore assets on the block and pinkslipped 400 workers.
CanWest, however, has done better on the TV side, economic downturn notwithstanding. It launched six digital nets in September 2001, three of which, DejaView, Lonestar and FoxSportworld Canada, have so far been among the more popular on the digital dial. Strong TV ratings in Canada, Australia and Ireland have somewhat offset ad woes — Winnipeg-based CanWest owns broadcast companies in Australia, New Zealand, Ireland and the U.K., as well as the L.A.-based production and distribution company Fireworks Entertainment, which posted respectable first and second quarters.
Paying down the debt remains the company’s top priority, and in addition to negotiating with its lenders for greater flexibility. Overall CanWest wants to slash its debt, which at the end of the third quarter stood at $3.5 billion, by an additional $600 million-$800 million.