Canwest Media: Suffering the Recession like other Media

Canwest Media Inc. (TSX: CGS and CGS.A), one of Canada’s media giants, is based out of Winnipeg, Manitoba.  Founded in 1974, the company owns several specialty channels, including E! Canada, Global Television (its main network channel) and Food Network Canada.  It also owns a conservative newspaper, The National Post and the broadcasting portion of Alliance Atlantis.  Like most Canadian broadcasters, Canwest shows predominantly American programming, but it also produces its own content, including television series, Da Kink in my Hair and the Canadian edition of Entertainment Tonight.

Recently, the company has come to the attention of media due to the impact of recession.  Not unlike its peers in the media world, Canwest has suffered a great deal because of the economy, with advertising dollars being lost.  Even in major markets like Toronto, shows have had to be cancelled and staff (especially crew members of news shows) laid off.  Some even speculated that its newspaper, The National Post, might be at risk as well.  Canwest owed the banks $1o0 million and has had to come up with the money by last Friday.  Fortunately, it was able to get a loan extension to March 11.

In addition to its money-related issues, Canwest has experienced controversy, especially with its publications.  For one, its Southam newspaper division used to be owned by Conrad Black, the media baron now in prison for several different charges including money laundering, racketeering and obstruction of justice.  Also, a few years ago, it attempted to implement a national editorial policy by not allowing local papers to publish with a regional point of view.  This led to protest by some papers, including a byline strike.  Other editorial controversies included the firing of a columnist who was critical of former Canadian Prime Minister, Jean Chretien and another who thought Chretien should resign.

On Tuesday, March 3, Canwest opened at 0.34 (CGS) and closed at 0.2950 (CGS). For CGS.A, the opening was 0.26 and its closing was 0.25.   Its 52-week high and low were  and 5.50 and 0.29 (CGS) and 5.52 and 0.25 (CGS.A).  The recession has definitely taken a toll on Canwest.