TORONTO – "There’ll be no big announcements today so you can get off the edge of your seats," CanWest Global CEO Leonard Asper told a gathering of shareholders and financial analysts today in Toronto while opening the company’s first ever investors’ day.
Some highlights from the executive presentations and from the Q&A session were:
* The company has looked at U.S. acquisitions – specifically of cable TV channels but, "we don’t have the stomach or the legs to take on a U.S. investment," said Asper. He added the company no longer sees it necessary to have a U.S. asset base even though it’s growing larger as an international media firm. "We will not actively pursue a U.S. acquisition," he said.
* While the company once said it wanted to decrease its reliance on ad revenue, bringing it down from 80% of revenues down to 50%, Asper said this isn’t really feasible, given the fact that so much content is expected – and given – for free. "We’ll focus on diversity within the advertising line," he said. "So, we’ll have all different types of advertising." The CEO also pointed out that Canadian TV now only makes up 23% of annual revenues, with 25% coming from its TEN investment in Australia and 40% from its newspaper group.
* As for acquiring specialty channels in Canada? "We won’t rule that out," Asper said.
* TV and radio president Kathy Dore gave a broad overview of the recent changes at Global Television and Global News and said an overhaul of CH is in the works and will be revealed later this year. "We want to better target CH as a complementary but distinctive brand," she said. "It’s relatively ill-defined and is hampered by its lack of a national reach." New branding and new programming will make the channel still look like a Global relative, but will also make it much more distinct.
One practice that will stop is the swapping of shows between CH and Global, which happened all too often in years past, making it hard for viewers to find favorite programs. "We’ll also expand the coverage of CH and bring the network to areas it doesn’t currently serve," added Dore.
* The company’s lone analog specialty, Prime, is also in the beginning stages of a re-brand and repositioning, added Dore and all of the company’s digi-nets (MenTV, Mystery, Xtreme Sports, Fox Sports World Canada, Deja View, Lonestar and Cool TV) are going through a detailed strategic review right now.
* After the Olympics, Global Television will unveil a re-jigged schedule where Monday nights will feature Prison Break, 24, The Apprentice; Tuesdays: Fear Factor, House, Gilmore Girls; Wednesdays: The new NBC mid-season slate, including Heist; Thursday: Survivor, My Name is Earl, The Office, Without a Trace; and Fridays: Las Vegas, Numbers, Conviction (a new NBC show).
* The publications side of the company "is going to see a reduced head count in quarter two," said publications group president Dennis Skulsky, who also added there’s now a hiring freeze in that division.
* Neither Dose nor The National Post is shutting down, as many have rumored. In fact the freebie Dose has almost 250,000 daily readers.
* CanWest MediaWorks’ on-line activities, such as canada.com, working.com, driving.ca and shopping.ca, (with renting.ca and remembering.ca to come) saw a 67% revenue gain in the first quarter of 2006, as compared to Q1 2005, said Arturo Duran, president of CanWest Interactive.
* When asked about margins on the TV side and when those might improve, given the money being spent on marketing and programming, CanWest MediaWorks president Peter Viner said: "40% margins may never return."
* Viner says he sees better days ahead not only thanks to the work that Global Television is doing to improve their product, but also because a rather large revenue stream at CTV is drying up. When BCE purchased Bell Globemedia for $2.3 billion back in 2002, it was made to produce a benefits package of over $230 million (the CRTC routinely asks for 10% in all media purchases).
Viner said that "this is the last year of that benefit money" and we will see expensive programming "like (Canadian) Idol and others change or disappear."
* Global Television has the Canadian rights to do a home-grown version of The Apprentice, for example (among other reality formats), but has not decided if it will go ahead, said Dore.
* The fees paid to the CRTC are way too high, said Asper. Of the $100 million or so that broadcasters pay to the Commission annually for their licenses, "about $75 million goes into the (federal government’s) consolidated revenue fund" and not towards the cost of regulating. "Don’t quote me on exact figures," added Asper, but it’s a huge overpayment."
* CanWest International president Tom Strike, as well as Asper, defended the company’s move into the Turkish radio market, saying the country and market has just what it wants: A stable, growing, huge economy and reasonably priced assets to buy. "There are 72 million people in Turkey, half of whom are under the age of 40 – and well-educated," said Strike.
Asper said CanWest did explore purchasing a newspaper and a national TV network but was out-bid for the TV assets and decided to walk away from the publishing possibility. "I don’t rule out the idea we’ll get into the TV business there," he added.
* CanWest’s new U.K. radio station may not be a sole asset for long. Strike said the company is applying for as many as six new licenses over the next 12 months and that the one it was awarded last year, serving Southampton, will probably launch this fall. The commercial radio market in the U.K. is pretty underdeveloped, he said, with just 280 private radio stations in all of the United Kingdom (the U.S. has over 10,000). It costs between two and four million pounds to launch a station there.
