October 27, 2009 / 8:39 PM / 10 years ago

Canwest's fall deals big blow to Aspers' home town

* Aspers were “huge champions of Winnipeg”

* Canwest decline a blow to civic pride - mayor

* Family still pushing museum, football stadium

By Rod Nickel

WINNIPEG, Manitoba, Oct 27 (Reuters) - From the top of the tallest building to a ballpark, hospital and business school, the Canwest and Asper names brand the Western Canadian city of Winnipeg as the birthplace of a media empire.

The only cranes in the city’s modest downtown are building the Canadian Museum for Human Rights, an ambitious project to create a national institution, spearheaded by the Aspers.

“You really can’t look in any direction without seeing their impact,” said Dave Angus, president of the local Chamber of Commerce. “They have been huge champions of Winnipeg.”

But like its rise, Canwest Global Communications Corp’s CGS.TO rapid fall under the weight of a huge debtload is felt most acutely in Winnipeg, which the Aspers have long favored with donations and high-profile investments.

Most of all, Canwest added a swagger to the step of a famously self-deprecating Prairie city.

“When you see a giant like that going through what it’s going through, it definitely has an impact ... on people’s psyche,” said Mayor Sam Katz.

The company, which filed for bankruptcy protection for some of its units earlier in October, continued its recapitalization process on Tuesday in an Ontario courtroom as it struggles with a debtload of about C$4 billion ($3.8 billion).

Founded by tax lawyer Israel “Izzy” Asper, Canwest grew from a single Winnipeg TV station in 1975 into the country’s third television network. It became the country’s biggest newspaper publisher in 2000 when it bought a chain of dailies, including the National Post, from press baron Conrad Black’s Hollinger International for C$3.2 billion.

Three years later, it set up its national newsroom in Winnipeg, leading some to compare the city and its newfound media profile with CNN’s home town of Atlanta.

The expansion continued in 2007 when it teamed up with an affiliate of U.S. investment bank Goldman Sachs (GS.N) to buy specialty-TV group Alliance Atlantis for C$2.3 billion.

“Where everyone thought they would leave the city, Israel Asper was committed to keep the headquarters here,” Katz said.

The family’s ambition helped transform its home town but the same trait likely helped bring down its media empire.

The company, which employs 7,400 people, was already creaking under heavy debt from the Hollinger and Alliance deals, when it was slammed by the downturn in advertising revenues brought on by the global recession.

Canwest spokesman John Douglas said the company and Asper family had no comment.

HIGH-PROFILE HEAD OFFICE

Winnipeg, a Prairie city built around the grain trade, owes much of any international reputation it has to a storybook bear called Winnie the Pooh, who was named for the city, and to the Asper family.

Canwest is by far the highest profile of Winnipeg’s small group of head offices, which also includes grain handler James Richardson International and IGM Financial Inc (IGM.TO).

But Canwest’s national newsroom has now moved to Ottawa and it only has 25 head-office jobs left in the city, according to reports, along with 200 in a financial office and TV workers.

Yet the family is still widely supported. The United Way charity is among Canwest’s creditors but has said it’s not worried about the several thousand dollars Canwest owes it, given the family’s history of support.

As Izzy Asper’s empire grew, so did its largesse. The Asper and Canwest foundations have donated C$125 million to charity.

“They are us and we support them 100 percent,” the Chamber of Commerce’s Angus said. “Unlike some other communities that tend to eat their young.”

The Asper Foundation, a charity separate from Canwest, will not be affected by the recapitalization plans, foundation president Gail Asper said this month. Also untouched is the Museum for Human Rights, a charity that has raised C$267 million from governments and the private sector.

Izzy’s son David Asper, meanwhile, continues to pursue plans to build a stadium for the city’s Canadian Football League Blue Bombers with a C$100 million contribution.

“Let’s not think for a moment the Aspers aren’t still here,” Mayor Katz said. “They’re here. Things will have to change, but who knows what will be down the road.”

$1=$1.06 Canadian Editing by Rob Wilson

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