End in sight to sale of Canwest newspapers

Canwest Limited Partnership's auction of itsnewspaperholdings grinds on toward a March 5 deadline even afterShaw Communicationssnapped up the television arm of the once-mighty Canwest Global empire.

On Feb. 12, Calgary-based Shaw gained an 80 per cent voting stake in Canwest Global Communications, the divisionthat owns the Global television network, for an undisclosed amount of money. The sale must still be approved by the Ontario court overseeing Canwest's restructuring.

The Shawdeal does not affect the sale of Canwest LP,the company's newspaper wing.

So far, a group of banks has submitted a so-called stalking horse bid of $925 million for the stable of print publications, including theOttawa Citizen, the Montreal Gazette and the National Post.

Earlier in February, an Ontario Superior Court judge extended the auction timetable, giving potential bidders until the first week of March to show an interest in the newspapers.

Canwest LP said it has already received outside bids for its newspapers, although it was unclear whether those offers bested the banks' figure.

A stalking horse bid is not usually designed to be a winning bidbut to set a floor below which other offers cannot fall.

Some analysts have estimated that Canwest'snewspapers mightfetch a price in excess of $1 billion.

But many traditional news publications have run into trouble in thepast couple of years, with shrinking advertising and dropping readership leaving the potential for growth in doubt.

According to the latest figures from the Arlington, Va.-based Newspaper Association of America, print advertising in the U.S. dropped almost 20 per cent in 2008 comparedwith 2007.

As well,traditional print and electronic news-gathering organizations have been grappling with competition from other sources of information, such as the internet.

Some prominent newspapers, including the Chicago Tribune and the Denver Post, have filed for bankruptcy protection in the past two years. Others have drastically slashed staff, and some, includingthe Rocky Mountain News in Denver and the Seattle Post-Intelligencer, havestopped publishingaltogether or moved entirely online.

Over the past 12 to 18 months, Canwest said it has cut 840 full-time jobs in an effort to reduce costs. Canwest LP expects to cut another 120 during its 2010 financial year.