Wells: CanWest deal all about local papers
There's going to be a lot of talk on the street today. About the CanWest deal, and how Paul Godfrey, Mr. Nine Lives, has stepped over the carcasses of fallen dynasties to emerge as the titan of the newspaper trade.
By Jennifer WellsStar Business Columnist
Mon., May 10, 2010timer2 min. read
See the Southams lying over there. And the newly fallen Aspers. And, down there, Lord Black, who at least imagined himself a dynasty.
There's going to be a lot of talk about the $1.1-billion deal to buy out the CanWest papers, and how it was favoured because it's cash and it's clean. In other words, there's a lot of real money on the table ($950 million), which makes existing senior debt-holders happy as it gives them the opportunity to say farewell to their investment.
There's going to be a lot of talk on the street, too, because the new, emergent company "contemplates" that it will be publicly traded, the kind of lure that's meant to excite the investment banking community.
Undoubtedly, there will be a great deal of small talk on the street today about how the deal was done and prognostications of its chances of success — or not.
But this isn't the street's story.
This is Canada's story.
I know that sounds corny. And I don't much care.
It's a story that will play out through the newsrooms of the Calgary Herald and the Montreal Gazette and the Edmonton Journal, newspapers that have now been notified that should the deal go through — a closing date of July 15 has been targeted — there will be pensions and benefits and continued employment: all newspaper operations will be maintained.
That's the plan.
It's an audacious bet. Big and ballsy.
And it will fall to Godfrey, long ago Metro chairman, past chief executive officer of the Toronto Blue Jays, current president of National Post Inc., to make it work.
It is difficult for this writer to bring objectivity to this assignment. Because I was born to a newspaper editor, I suppose. And a Southam one at that. Who ran the Winnipeg Tribune in its heyday. And hated sentence fragments.
Time magazine wrote a story on him once. It was the summer of 1962. I mention this only to sneak in an anecdote from that piece. "Even more frightening to him is telegraphic typesetting," said the story. "This mechanical monstrosity,'" maintains Wells, "accelerated the decline of astute news editing."
Times change. Readers recall various commissions into the state of the industry and serial fears over media concentration. The Internet has changed the industry wholly. But local papers do matter in local markets and Paul Godfrey is gambling on that.