WINNIPEG – Unable to meet their financial expectations, Canwest Global Communications Corp. says it had sold its three U.K.-based radio stations.
While the sale price was not disclosed Canwest president and CEO Leonard Asper added that the sale of the three properties will enable the company to improve its operating profit by about $7 million annually.
The company’s wholly-owned subsidiary, Canwest MediaWorks UK Limited has completed the sale of its “Original 106fm” branded radio operations in Bristol, England and Aberdeen, Scotland to private investors that include members of the stations’ management group. A third station that services the Solent region of England has been sold to Complete Communications Corporation Limited. All will continue to operate under the “Original FM” brand name through licence agreements with Canwest.
After reviewing the U.K radio industry earlier this year, Canwest determined that the growth potential in this mature market was limited and that it would be better to focus resources in areas that had better long-term prospects.
“Our strategy is to focus on our core assets, improve our balance sheet and invest in higher-growth products and areas of the media business,’’ explains Asper. “When reviewing our properties, we determined that the prospects for FM radio in the U.K. were not consistent with the company’s long-term growth strategy.”
Canwest first applied for its first FM licence in 2004 to complement its television holdings in Ireland. At the time, U.K.’s radio market was expected to grow significantly. However, by the time the broadcast regulator issued the licenses, two years had passed and the radio market had become intensely competitive and the growth outlook was significantly reduced.
