Wednesday, October 15, 2008

The Death of Canwest

This dog, worth $18 three years ago, has now fallen through $1.50.
I don't follow this collapse because I have anything against Canwest. I do it because I believe this has huge ramifications for Canadian journalism and the concept of "convergence", which was a $50 word for the old bogeyman of cross-ownership and monopoly.
This company is over-leveraged with high-interest debt. The only way it can stave off bankruptcy is by closing money-losers (the National Post) and dismantling the rest of the company. In normal times, this company would have been raided by a buy-out specialist like Conrad Black, who must be laughing right now.
So, again, this is how I see this going: the TV network is uncoupled from the newspapers. The Asper family may or may not end up with some ownership of the network. The newspapers get sold to... well, who?
Listen very, very carefully for talk of changes to Canada's foreign ownership laws.
Or we can ask these guys, who have been quietly adding to their stake in the company.

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