Canada's incredibly shrinking newspaper empire
At the risk of Vancouver Sun reporter Jeff Lee accusing me of conducting a drive-by shooting on his employer, I've decided to share the following facts about the newspaper's parent company.
This morning, I noticed that Postmedia Network Canada Corp. B shares are trading at 78 cents and the A shares are trading at 75 cents. The company's market capitalization is just over $30 million.
That's for a corporation that owns the National Post, Province, Vancouver Sun, Edmonton Journal, Calgary Herald, Regina Leader-Post, Saskatoon StarPhoenix, the Windsor Star, Ottawa Citizen, Montreal Gazette, websites, and printing plants, including a large one in Kennedy Heights in Surrey.
It's amazing to think that the country's most influential newspaper chain is worth a mere $30 million, which is chump change to local billionaires like Jimmy Pattison or lululemon founder Chip Wilson.
It's even more remarkable when you consider what the Asper family paid the Conrad Black empire for control of his somewhat larger chain of newspapers (13 metro papers, magazines, websites, and 130 community papers).
In 2000 just before the dot-com bubble burst, CanWest Global Communications Corp. forked over $2.2 billion in cash, another $600 million in nonvoting shares, and $77.6 million in multiple-voting shares. This left Hollinger with 15 percent ownership of CanWest.
In 12 years, a chain that was worth more than $2.8 billion in the eyes of the Asper family has shrunk to just over one percent of that amount. The entire deal was valued at $3.5 billion, because Hollinger took back a $700-million subordinated debenture.
To be fair, Postmedia has shed some assets, including the Victoria Times-Colonist and its chain of Lower Mainland community papers to Glacier Media.
But as we approach the 12th anniversary of the CanWest-Hollinger deal on Tuesday (July 31), it's still a stunning drop in value, leaving me to ponder if it's even possible for Postmedia's share price to fall any further.
Follow Charlie Smith on Twitter at twitter.com/csmithstraight.