VANCOUVER — CanWest has inked a C$3.37 billion ($2.27 billion) deal to buy most of Conrad Black’s Canuck print and Internet assets, creating Canada’s biggest media company — and a big headache for federal politicians and regulators.
The cash, stock and debt package for Black’s Hollinger and Southam chain properties is expected to be completed in September, although the Canadian Competition Bureau must first approve the sale. The media purchase — the largest ever in Canada — will also be scrutinized by the Canadian Radio-Television and Telecommunications Commission, which licenses the country’s broadcasters.
As soon as the transaction was announced Monday, fears were raised about the concentration of power in Canadian media that the newly configured Winnipeg-based firm would represent.
Black’s Hollinger and Southam newspaper chains have a stranglehold on over 60% of the Canadian market, about 1.3 million readers. CanWest, controlled by the Asper family, had sales in the last fiscal year of about $400 million; with the new acquisitions, its sales this year are expected to reach $1.7 billion.
Fast-moving CanWest Global Communications already owns Canada’s second-largest television network. In addition to film and TV producer and distributor Fireworks Entertainment and 20% of the voting shares in Alliance Atlantis, the firm controls several Canuck specialty cable webs (including business channel RobTV, in which it is partnered with rival Thomson’s Globe and Mail newspaper), and film and television production service firms across Canada.
CanWest will acquire 13 metropolitan newspapers, including the Vancouver Sun and Province, Calgary Herald, Montreal Gazette and Ottawa Citizen, a 50% interest in the Toronto-based National Post, as well as 136 smaller community papers, 85 trade publications and all of the Hollinger and Southam Internet properties.
“This is the ultimate convergence transaction,” said CanWest president Leonard Asper, who explained that the deal would provide unique opportunities for advertisers to buy into television, radio and print from one source.
“It will be a massive content storage machine,” Asper said, adding that CanWest had made the decision “some time ago” to be primarily a content provider and not a technology-based company.
Prime Minister Jean Chretien will be happy to see the departure of the government-baiting Conrad Black, who still retains ownership of Hollinger holding companies that control international assets including the London Daily Telegraph, Jerusalem Post and Chicago Sun-Times. Chretien’s governing Liberal party is expected to support the sale.
But London-based Black is not going away soon. He and longtime associate David Radler of Vancouver will join CanWest’s board, and Black will remain chairman of the National Post, whose board will consist of an equal number of Hollinger and CanWest execs.