Canwest files for bankruptcy: another media meltdown

THE bankruptcy reorganization of Canada's largest media company, announced Tuesday, is another sign that the debt-driven model of newspaper and TV chains no longer works.

The company is Canwest Global Communications, Winnipeg. It owns The Vancouver Sun and other big-city papers, as well as The National Post, the more conservative of Canada's two nationwide papers. Canwest owns Global Television and specialty TV stations. Some of these properties were included in yesterday's filing and some not.

Canwest's businesses were roped together by the late Israel Asper with debt that earlier this year was at a staggering $4 billion Canadian. It was too much, and in an environment of lowered advertising revenues, Canwest could not pay the interest on it.

That's happening industrywide. It does not mean the end of newspapers. Canwest's CEO, Leonard Asper, says the reorganization will strengthen the company — and if he manages it right, it should.

The National Post's rival, The Globe and Mail, speculates the Canwest LP newspaper unit will be split up, with newspapers going to different owners. We hope so. A chain as big as Canwest Global Communications in a country as small as Canada is a monstrosity. It is too much power in one place.

A paper like The Vancouver Sun should not be owned by a public corporation in Winnipeg. Its owners should be people who know and care about Vancouver, and probably people who live there. They should not look at their newspaper as collateral for acquisitions but as an operating enterprise in the business of journalism.

A few years ago, views like ours were considered old-fashioned and impractical in the new world of media giantism. Now the giants fall.

Readers should keep a note of who is filing for bankruptcy reorganization and who isn't. Always, debt is at the center of it, and usually debt not for the purpose of journalism.