End in sight to sale of Canwest newspapers
Canwest Limited Partnership's auction of its newspaper holdings grinds on toward a March 5 deadline even after Shaw Communications snapped up the television arm of the once-mighty Canwest Global empire.
On Feb. 12, Calgary-based Shaw gained an 80 per cent voting stake in Canwest Global Communications, the division that owns the Global television network, for an undisclosed amount of money. The sale must still be approved by the Ontario court overseeing Canwest's restructuring.
The Shaw deal does not affect the sale of Canwest LP, the company's newspaper wing.
So far, a group of banks has submitted a so-called stalking horse bid of $925 million for the stable of print publications, including the Ottawa Citizen, the Montreal Gazette and the National Post.
Earlier in February, an Ontario Superior Court judge extended the auction timetable, giving potential bidders until the first week of March to show an interest in the newspapers.
Canwest LP said it has already received outside bids for its newspapers, although it was unclear whether those offers bested the banks' figure.
A stalking horse bid is not usually designed to be a winning bid but to set a floor below which other offers cannot fall.
Some analysts have estimated that Canwest's newspapers might fetch a price in excess of $1 billion.
But many traditional news publications have run into trouble in the past couple of years, with shrinking advertising and dropping readership leaving the potential for growth in doubt.
According to the latest figures from the Arlington, Va.-based Newspaper Association of America, print advertising in the U.S. dropped almost 20 per cent in 2008 compared with 2007.
As well, traditional print and electronic news-gathering organizations have been grappling with competition from other sources of information, such as the internet.
Some prominent newspapers, including the Chicago Tribune and the Denver Post, have filed for bankruptcy protection in the past two years. Others have drastically slashed staff, and some, including the Rocky Mountain News in Denver and the Seattle Post-Intelligencer, have stopped publishing altogether or moved entirely online.
Over the past 12 to 18 months, Canwest said it has cut 840 full-time jobs in an effort to reduce costs. Canwest LP expects to cut another 120 during its 2010 financial year.