(Adds background, details, updates stock price)
By Wojtek Dabrowski
TORONTO Nov 3 The National Post, the flagship
daily newspaper of Canwest Global Communications CGS.TO, is
significantly cutting back its presence in two Western Canadian
provinces, a spokesman said on Monday.
The money-losing Post is suspending home delivery in the
province of Manitoba -- Canwest's home market -- and will only
provide Saturday newspapers for retail purchase in Manitoba and
The paper's operations elsewhere in Canada are not
"The cold, hard reality right now is that the cost of the
newspaper is not great enough to cover the printing and
distribution cost in these smaller markets," Canwest spokesman
John Douglas said, adding: "The two markets put together are
not very large in terms of what the circulation was."
The Post will sell discounted digital subscriptions instead
and has also struck a content-sharing deal with the Winnipeg
Free Press. Under that agreement, the Free Press has started to
print some Post columns and business news.
The moves come as Canwest, Canada's biggest media company,
tries to cope with significant headwinds because of the global
Last year, Canwest expanded its television holdings by
partnering with an affiliate of U.S. investment bank Goldman
Sachs (GS.N) to buy specialty TV group Alliance Atlantis
Communications for C$2.3 billion.
Canwest owns Canada's Global network of TV stations and has
Australian TV operations through Network Ten.
The company's media asset base is reliant on advertising
revenue. However, because of the weak economy, many companies
are expected to trim their ad budgets, which in turn doesn't
bode well for firms like Canwest.
That is in part why the Winnipeg, Manitoba-based company
has seen its shares slide into penny stock territory. On
Monday, the shares were flat at 92 Canadian cents on the
Toronto Stock Exchange.
In early August, Canwest's stock jumped well over C$2 after
a media report that suggested the company may be planning to go
private, but no deal has materialized.
Canwest is carrying about C$3.7 billion ($3.1 billion) in
debt on its books, which has raised some investors' eyebrows.
While media companies in the United States have begun
undergoing painful job cuts and restructurings, widespread cost
cutting has yet to take place in Canada, where drops in ad
revenues and readership numbers have not been so severe.
Analysts and critics have long speculated that the Post
could be shuttered because of the estimated tens of millions of
dollars in losses it has generated since its launch 10 years
Asked whether Canwest has made any firm decisions about the
Toronto-based newspaper's future, Douglas replied: "the
National Post has been on a road to profitability. It continues
to make headway on that."
However, he also confirmed the daily continues to lose
(Reporting by Wojtek Dabrowski; editing by Richard Valdmanis)