Two more CTVgm stations going dark, and Canwest sheds its Score stake
CTVglobemedia is closing two A stations in southwestern Ontario in August. And elsewhere on the economic impact watch, Canwest Global Communications is selling off its stake in Score.
CTVglobemedia will close two A stations in southwestern Ontario when their licenses expire in August, the company announced on Wednesday.
Citing ‘financial pressures’ and what it says is a broken economic model for Canadian television, the broadcaster plans to close CKNX-TV in Wingham and CHWI-TV in Wheatley; the latter of which is branded A Windsor, where it re-broadcasts. Wingham is a small town of some 3,000 people between London and Owen Sound.
‘This decision was difficult but necessary,’ said CTVgm EVP of corporate affair Paul Sparkes in a release. The news follows word that CTVgm will shut down Manitoba’s CKX-TV in the summer if a buyer cannot be found.
Sparkes added – in an apparent jab at the CRTC and its decision to withhold fee-for-carriage rights from conventional networks – that the company may need to consider similar actions in other markets ‘given the current regulatory framework.’
The loss of the stations stands to reduce local news coverage in the region – sending viewers to London or the CBC affiliate in Windsor, CBET.
In all, 26 employees will leave, according to A London station manager Don Mumford, who also oversees operations for Windsor and Wingham. He says A London will service those markets and will continue to send reporters to cover stories of ‘significant nature’ that occur in Windsor.
The network also operates As in Barrie, Victoria, Ottawa and Halifax, while Alberta’s ACCESS channel airs A programming in certain prime-time hours.
‘Since CTV is not going to re-apply for the license, our hopes are that the license will be up for grabs for someone else,’ said Peter Murdoch, VP of media at the Communications, Energy and Paperworkers Union of Canada, which represents staff at the stations.
‘There’s no question we’re in difficult times, and no question that broadcasters would like fee for carriage, and we support that. I just hope that they’re not using the closings as a leverage for that argument…that’s not a good argument for closing station.’
Meanwhile, Canwest Global Communications is selling around 16.6 million shares in Score Media to the latter’s parent company to raise $6.6 million.
John Levy, Score Media’s CEO and controlling shareholder, will also mop up Canwest’s remaining shares in his company as part of a private placement to be conducted by Genuity Capital Markets.
Levy is buying his company’s shares from Canwest at around $0.40 each, a discount to the current share price for Score Media at around $0.54 on the Toronto Stock Exchange. Levy said his stock buy-back reflected his company’s ‘strong balance sheet.’
Canwest acquired the block of shares in Score Media in 2007 when it acquired Alliance Atlantis Communications with financial partner Goldman Sachs & Co. Now, two years later, Canwest has hired RBC Capital Markets to help raise new capital and sell off non-core assets to stay in business.
The search for a financial life raft comes ahead of this Friday’s deadline for Canwest to refinance an existing $300 million credit facility to avoid a breach of key lending covenants.
‘What is often overlooked is that Canwest’s businesses are highly profitable and generate well over $500-million a year in operating profits. Our issue is that in this recession, those profits have been reduced by a serious downturn in revenue so our ‘mortgage’ is too high for our lenders’ liking,’ CEO Leonard Asper said in a memo to company employees, as rumours about a possible filing for bankruptcy protection continued to swirl. Also on the auction block are five E!-branded TV stations.
From Playback Daily