Canwest, Shaw: Analysts & industry weigh in

The cable giant will have access to content on dozens of channels, control of broadcast and online. But it must preserve diversity, says CFTPA's Bolen

By Etan Vlessing
February 12, 2010

As reported earlier today, Shaw Communications emerged on top in a solicitation process led by RBC Capital Markets to find a Canadian ‘preferred equity investor’ for Canwest to make a minimum $65 million investment the company.

Details about the bid were slow to be revealed throughout the day, but as Friday comes to a close, a clearer picture of what the acquired company could look like is starting to form, as are the opinions around it.

In an investors note today, Thomas Weisel Partners analyst Ben Mogil predicted Shaw subsidiary Corus Entertainment will acquire the 35% stake in the former Alliance Atlantis channels.

Shaw will get the front door keys to Global Television, specialty channels like MovieTime, DejaView and Fox Sports World, and a 35% stake in the 13 specialty channels operated in partnership with Goldman Sachs & Co. The deal echoes Comcast’s recent takeover of NBC in that Shaw will gain access to rich media content and control of its flow to broadcast and online platforms. The deal does not include Canwest Global’s print division, which is currently being auctioned off.

CFTPA president and CEO Norm Bolen said Friday it is crucial that Corus operates separately from Canwest to preserve ‘diversity’ in the broadcast sector.

There are other hurdles to overcome. Canwest cautions that the Shaw investment is but one milestone required before it can emerge from creditor protection. Others include resolving all outstanding debtor claims against holding company Canwest Media Inc., and securing creditor, CRTC and court approval for the overall restructuring plan. Canwest also notes that any or all of the remaining milestones could impact the financial restructuring plan and the company’s final ownership structure.

Still, the Shaw deal elicited a sigh of relief industry-wide.

‘This is good for Canwest,’ said ACTRA national executive director Stephen Waddell. ‘This indicates a confidence that Jim Shaw has in broadcasting and in the future of broadcasting, notwithstanding his criticism of the broadcasters in the past.’

The CFTPA’s Bolen echoed the hope that Shaw’s investment will help restore ‘financial stability’ for Canwest Global.

The Shaw investment also means Canada’s big three cable operators, including Rogers Communications and Quebecor Media, now own huge chunks of the Canadian airwaves just as the Canada Media Fund gets set to fund broadcaster-affiliated production from March 1.