Canwest responds to client concerns
Agency reactions paint a brighter picture against a backdrop of doom-infused headlines.
It’s been a rough few weeks for Canada’s largest media empire. Following the recent sale of its Australian Ten Network, Canwest Media faced a barrage of damning headlines from across the country and abroad as it filed for creditor protection – a move that would, under the Companies’ Creditors Arrangement Act (‘CCAA’), reduce its shareholder stake to 2.3%. But the move also bought time to restructure and recapitalize its Canwest Global assets, which include the National Post, Global Television, MovieTime, DejaView and Fox Sports World, a collection of units representing 30% of its revenues. Meanwhile, units not included in the filing – TVtropolis, Mystery TV, Men TV, 13 specialty channels including National Geographic Channel, Slice, History Television, Food Network and Showcase, as well as the co’s publishing and associated online and mobile operations – though protected by a forbearance agreement until the end of the month, are being eyed by Canada’s other major media companies.
To reassure advertisers that on air it’s business as usual, an email was sent to clients the morning of the announcement, and released to MiC, which states: ‘It’s important to understand that this is a pre-packaged strategic filing in that the outcome has been predetermined because we have the support of our major debt holders to implement a financial restructuring that will enable the business to emerge stable, more competitive and better able to deal with the current issues facing a competitive broadcasting industry.’
To further address the concerns, less than 72 hours after the CCAA filing announcement the media giant’s sales teams, led by Canwest Broadcasting executive VP sales Errol Da-Ré, president Peter Viner and National Post VP sales Mark Spencer, met with heads of media agencies representing over 80% of its business to secure confidence and ‘clarify the facts.’
‘There’s a lot of noise and misinformation swirling around when something like this happens,’ Da-Ré tells MiC. ‘We wanted to get ahead of the speculation and tell our advertisers and agencies that there is a strategic plan that will see us emerge from this filing in four to six months [as] a stronger industry competitor, with a lower debt load and a renewed financial outlook,’ he says. ‘Those who have only scanned the headlines have questions about the future. That is why personal outreach has been so important. We have been looking our clients and agencies square in the eye, given them our reassurance, told them the whole story and responded to their questions.’
Speaking to MiC this weekend, Da-Ré reveals the level of support from agency clients has been ‘extremely positive.’
‘We spent a great deal of time reaching out to [advertisers and agency clients] to provide them with the facts: that we have up to $100 million in court-approved funds and $65 million in cash reserves to operate during this period; that we have a very strong programming lineup and that we have supply agreements with our major studios throughout the year,’ Da-Ré tells MiC. ‘Once the facts were on the table,’ he tells MiC, ‘our agencies and clients understood our position better. They are not only telling us that they are with us, but that their marketing plans will not be altered by this in any way. They realize this is a balance sheet restructuring and that we remain committed to our television brands staying together and our plan.’
ZenithOptimedia president and CEO Sunni Boot, who was one of the media mavens recently approached by Canwest, tells MiC she views the CCAA filing of creditor protection as having ‘a very positive outcome for the industry,’ and that Canwest’s focus on the restructuring of its business for financial stability and growth is ‘important to the buying community who views Canwest as a strong entity in the market with excellent brands, high demand content and a top-notch sales and creative team.’
‘ZenithOptimedia is a buyer,’ says Boot. ‘We want more sellers not less. We want those sellers to be aggressive and strong so that we can access the best broadcast, digital or print media at the best price.’
PHD Canada president Fred Forster echoed Boot’s sentiments, saying, ‘we see the restructuring of the debt under CCAA as a positive for the future overall health of the business. We also believe that retention of Omnicom Media Group business and the confidence of our clients will be a priority for any new or revised ownership, as we are arguably their single biggest customer. Whatever the eventual ownership structure of the holding company and the operating divisions going forward, we believe that the major media assets will continue to operate including conventional TV, specialty TV, newspapers and digital.’
‘We plan to conduct business as usual; there will be no cancelling of plans,’ Mediaedge:cia president Bruce Neve also tells MiC. ‘In fact, we expect an even stronger desire by Canwest to be flexible, creative and to over deliver within the current environment. Time will tell what the three business units will look like coming out the other end.’