Court approves Post's transfer to publishing division

ShareThisAn Ontario court has cleared the way for Canwest Global Communications Corp. to move the National Post into its publishing division, where it will join the companies other newspapers, The Globe and Mail reports.

The company had stated that it would likely have to close the Post if the transfer were not allowed.

The Globe's Grant Robertson wrote:

"Sources close to the restructuring said there was little doubt the move would take place since all major creditors agreed in advance to the proposal and there were no legal objections. However, the shift has broader implications for the company.

"Before the shuffle, the National Post was part of CanWest Media Inc., which filed for court protection from creditors three weeks ago. CanWest Media is the holding company for the operating assets of CanWest Global.

"CanWest is moving the Post into its newspaper subsidiary, CanWest LP, to group all of the company's print assets together in advance of a separate filing for court protection for that business."

A Canwest news release states:

"Shared service agreements that govern content sharing between CMI and Canwest LP and allow for consolidated and co-ordinated advertising sales will continue under the re-alignment until at least August 31, 2010. To date, the attractiveness of a co-ordinated advertising sales effort has been widely endorsed by the marketplace. CMI and Canwest LP will be able to negotiate continuing arrangements to be put in place beyond their scheduled expiry date."

In an Oct. 31 editorial titled "The rumours of our demise...," the Post editorial board responds to the many reports "predicting the imminent closure of the National Post."

The editorial writer states:

"The firestorm of uninformed speculation was ignited by one paragraph in a 33-page court filing pointing out it was doubtful the National Post could sustain operations in the absence of funding for its current — albeit minor — losses. That is the case for any operation until it crosses into profitability.

"As a media organization, we understand as well as anyone else that the most controversial element in a story often finds its way to the top. We also understand that all elements of a story have to be put in context.

"This is the context. There is no debate this 11-year-old newspaper has lost a lot of money since launch, particularly in the early years. That’s what newly launched newspapers do. USA Today lost money its first decade as well.

"Court documents filed in association with the transfer reveal a steady improvement in the bottom line from an annual loss in fiscal 2001 of $65-million to $12.7-million in fiscal 2008.

"The last fiscal year saw single-digit losses and that number is expected to come down further this year. And as our online audience and revenues continue to grow, we will cross the line into profitability.

"On the other side of the coin, the Post paid the newspaper group $21.5-million last year for services such as printing, distribution and technological support, according to filings. Do the math, and you get a sense of the net value of the Post to the chain."