The future of Canwest newspapers

Here’s the official line: the lenders are looking for about $1 billion (to start) to sell the entire newspaper package. They will accept bids for seven weeks, narrow them down for another seven weeks and hopefully come up with the best price. If not, they will form a company, take it public and run it themselves as a new entity. In reality, they want as much of their money back and don’t want to be newspaper owners. There’s already speculation about buyers, ranging from Torstar to Metroland to Paul Godfrey to pension funds and who knows who else will come out of the woodwork. The line is that they are being sold as a package, which includes the money-losing National Post. They argue that you need a national newspaper to allow for advertising synergies with local newspapers. That argument has been in play for over ten years and it hasn’t worked, and no sharp-eyed buyer will buy it. If anyone buys it as a group, the Post will likely simply be shut down, which is a shame since the last four pages of the front section are the best newspaper commentary in Canada. Another option is to break it up and sell off the pieces, which already has some interest according to the Toronto Star, with groups looking at possibly buying the Montreal Gazette and the Ottawa Citizen, and the Alberta dailies. The bottom line is that, regardless of the rhetoric coming out of Canwest and the lawyers, the lenders want the best price possible, whether that means selling the group or breaking up the group and selling the pieces. There is another model that everyone seems to have forgotten about: the original Southam model (pre-Conrad Black), in which each newspaper was expected to be managed locally to reflect the local market, with some common efficiencies in support areas like purchasing, HR, IT and so forth. That worked quite well for many decades, admittedly in the pre-Internet era.

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