Wednesday, February 4, 2009

Is The End coming near for Global?

I heard on the radio this morning that CanWest stock dropped to about 40 cents yesterday. They may be in violation of debt covenants as early as this month -- if its debt exceeds five times EBITDA (earnings before interest, depreciaton and amoritzation). And it's getting dangerously close to that threshold. I thought, could this really be possible?

Yes. Maybe it is.

It's hard to believe that it was over three decades ago in 1975 that a maverick Winnipeg businessman took a bold gamble in television in an era where in many parts of Canada it was just CBC and CTV and nothing else. "Izzy" Asper bought up the facilities of an endangered station in North Dakota, trucked them over to the Canadian side of the border and switched the first two call letters -- thus, KCND became CKND. (This became possible when the CRTC announced a new license for Winnipeg and KCND, which relied almost completely on Canadian advertisers, realized they would lose them and go bankrupt, because the Canadian companies could then no longer advertise on American stations and deduct the costs for taxes -- so they just sold out.)

What was the first show they broadcast when the station relocated to Canada? Believe it or not, the Jerry Lewis Telethon.

From this base, he bought up one station at a time and had the nerve to also put up repeat transmitters to bring the signals in the big centres to the smaller ones -- something CBC has been doing almost from the start. The stations pretty much had their own identities although it was understood they were part of a larger whole -- even though the CRTC tried hard to maintain the Anglophone duopoly. But eventually, when Asper finally succeeded in getting stations in Alberta, he had close to a national network (Newfoundland is still the odd man out -- you can only get Global on cable or satellite there). He christened it with the name that had always given to the Ontario station, Global (which was started in 1974 but got scooped up by Asper when it ran into difficulties).

Odd thing, it mostly carried American shows. They had some original programming -- most famously What Will They Think of Next, Super Dave, Jake and the Kid and Ready or Not -- not to mention the wackiest news team until CityTV switched from their black box studio to their "environment" and videographers. Who can forget Bob McAdory on the same set as Thalia Assuras and Peter Trueman and Bill Brahman -- I think that's what his name was, he had that kind old face and did human interest stories well into his nineties. But it make them tons of cash by keeping it simple.

The Aspers were also quite restless and wanted to be kingpins in print media as well. In a complicated game of musical chairs, they eventually got hold of Southam News which they promptly renamed CanWest Media.

They've tried integrating print and television media. Out west, they've been successful -- with both major dailies in Vancouver as well as a local edition of the National Post they have 87% of the market in the Lower Mainland. A similar story appears in major centres in Alberta and Saskatchewan, where thanks to the Aspers neither the local newspapers nor the local Global stations can even mention syllable one of the name "Gwynne Dyer."

A completely biased approach to reportage on Israel. And no good news about anyone who's a Muslim either or has family connections to Shias, Sunnis or the Druze -- not even Casey Kasem. (Ironic, since Global ran the Scooby Doo cartoons for years and we all know Kasem was the voice of Shaggy!)

At least there they have to complete with the local Suns -- if you can call a tabloid competition. (Sidebar, both companies need to learn from outside Canada, where some tabloids such as the Chicago Sun Times and the LA Daily News in the States, and the Times of London and the Daily Mail in the UK, are actually quite well laid out in content.)

In Central and Eastern Canada, however, it's been a disaster. Because the market is so much more crowded, especially in southern Ontario, the NP has lagged in fourth place from the start and the profits from the TV station have essentially been used to bail out the paper -- which also explains why just about the only original shows they have left is that silly phone in quiz show in the mornings where you pay two bucks to be put on hold for a half hour then get hung up on, and ET Canada. (We don't need Mary Hart light, thank you very much.) Do they really think they can fund a newspaper by slashing their morning news show in Toronto?

Why is the NP dying? No, it's not its neo-con orientation. The simple reason: Not much in terms of classified ads relative to other local and regional papers. If you wanted to sell something, would you put the ad in the Star or the Post? Exactly.

The NP actually started out as a pretty good paper, in my opinion, but it has gone downhill to a joke. It got bailed out as long as Global had the Canadian broadcast rights for the NFL but it lost that to CTV some time ago -- and that's a huge loss of advertising revenue. And that was before the recession really hit, which could reduce revenues even more,

The only good thing left in it is the Financial Post, a long standing paper of good repute and which was in very good hands when it was published by the Toronto Sun (although even then I really couldn't care less what Terrence Corcoran or Diane Francis have to think). At this point, the only way to save the whole thing from collapsing is to make the FP the front sections, and strip down news to perhaps a four page summary (like the sports section was in the old days). It might pigeonhole the paper back to the Bay Street crowd, but at least it could focus its resources on financial reportage and become a serious competitor to the Globe and Mail again.

If the Aspers have to sell off either the papers or the stations -- maybe even their foreign assets such as Aussie's Channel 10 -- that would be a good thing. Global is in major need of a reboot, and one that puts some kick back into Canadian programming and news content that is relevant. And I don't mean ET Canada or Gameface (or whatever that show is called). We need fresh voices and open-minded ones, not the closed ones at the CanWest board.

As for the papers -- well, I'm glad my local paper is owned by the Star and not the Aspers although reading it lately one couldn't really tell the difference except for the fact I can actually read Dyer's columns.

About the only way to save Global now is to run couple oriented soft-core porn late night (sad but true) -- except that market has already been taken by City and Québec's TQS!

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Warren K said...

That is a very good post. You should send it to Bourrie so he can link.

BlastFurnace said...

Thanks for the compliment, Warren.