There is no New Year’s resolution to cut back on spending at CanWest Global Communications. The once one-station broadcaster has pegged its market and is continuing on a buying spree that took it from Chile to the Maritimes in 1994.

The CanWest approach to acquisitions in the world market goes like this: Think like one of the big players. Buy like the big players. Make Canadian properties your first priority while putting down roots in foreign markets that contribute to the company’s health and stabilize Canadian investments.

You have to set priorities, but you can’t limit yourself, says Izzy Asper, CanWest Global chairman and ceo.

‘We’ve taken leaps forward in adding to our Canadian critical mass. Our number one priority is to open doors in Canada and we still have a long way to go, but at the same time, Canada is finite. What’s become very clear to us is that we cannot defend Canada unless we are a larger player than just Canada. Home base is not secure, in our opinion, if we remain only here,’ he says.

With six Canadian stations, stations in New Zealand, Australia, and Chile, and possible plans to bid for a fifth British tv station and Canadian specialty services, CanWest is in a growing phase unprecedented in its 22-year history.

Record profits reflect that growth. In the year ending Aug. 31, 1993, the company’s revenue increased $15 million to a record $248 million. Operating profit was $69.5 million, up $14.9 million from the previous year.

The increase is due in part to CanWest’s shares of Australia’s Network Ten, which generated revenues of $218 million and net earnings of $17.3 million nine months after acquisition. If profits increase proportionately over the next year, shareholders will have a full return on their $?????????????? investment by the end of 1995. TV3 in New Zealand generated $??? million, while Global Television, the company’s Canadian flagship station, pulled in $???????????????.

According to Asper, the catalyst to the momentum that continues to build was a decision made 10 years ago to go head-to-head with the CTV Television Network and conduct itself as if it were the third force in Canadian broadcasting. There has been no looking back.

After rescuing Global Television from receivership in 1974, CanWest launched cknd-tv Winnipeg in 1975, stv in Regina and Saskatoon in ’87, New Zealand’s TV3 in ’91, and Network Ten in Australia in 1992.

In ’94, CanWest established a presence in the Maritimes with the purchase of mitv in August for a net cost of around $12 million, says Asper. It moved into its first foreign-language market in June with the purchase of 50% of La Red Television Network in Chile, and shareholders in Network Ten recouped $25 million of their original $50 million investment a mere two years after the deal was signed.

It’s a long way from a single Winnipeg-based station, but CanWest hasn’t yet reached that goal of becoming the third national broadcasting force equal to ctv and cbc, says Asper.

CanWest broadcasts are reaching about 77% of the English-speaking market, and programming supplies to Alberta and Quebec take that number over 80%. But with the crtc’s rejection of its application for a private commercial network in Alberta in June, CanWest’s lack of presence in the Alberta market continues to thwart its efforts to be one of the big three.

Frustrating

It’s frustrating, says Asper, but it’s not slowing CanWest down. A growing presence in Canada is always priority one, but that doesn’t negate investing in strongholds in what has become essentially a world market.

All signs point to Asper’s bidding for the fifth British tv network on the block again. On returning from a week in London in December, Asper said carefully, ‘At this point, we’ve made the decision we’re interested, but we’ve not made the decision to apply.’

There are several different groups investigating possible alliances, but Asper won’t divulge potential partners.

If a bid is constructed, it will be CanWest’s second attempt to lay claim to Channel 5. In 1992, it signed on as the third major financial backer of Five TV Limited, an equal partner with New York-based Sony Columbia Pictures Entertainment and Thames Television of London. ChumCity’s Moses Znaimer joined the group as a developer.

Asper was reportedly willing to invest between $30 million to $50 million, but in return wanted management control of the consortium and a heavy fee for running it under contract. Thames ceo Richard Dunn reportedly put his foot down.

Asper withdrew both public support and cash later that summer after the rest of the group contested his conditions for the station’s startup.

Time Warner quickly came onside after CanWest’s exit, but the consortium’s bid was ultimately rejected by the Independent Television Commission, Britain’s tv regulator, in 1993.

Today, the outspoken broadcasting icon says he withdrew support because the business plans the consortium was putting forward were flawed. That decision was reinforced when the itc rejected the bid, says Asper from the CanWest head office in Winnipeg.

‘Having done nine television startups and having experience with how fragile they are, we were not satisfied that the group assembled was taking appropriate steps. Our experience was not going to be given appropriate recognition and we withdrew. We were ultimately vindicated when the itc turned it down on exactly those grounds,’ he says.

If CanWest wins the British broadcast licence, it will be its first foreign investment in a project it can never fully own. British foreign ownership restrictions dictate that only ec companies can own more than 49% of a tv venture in the u.k.

The potential for 100% Canadian ownership has been part of the criteria for CanWest foreign investments since it began shopping outside Canadian borders in 1991.

It was key to investments in Network Ten and TV3. CanWest bought 20% of TV3 for about $15 million, with an option to buy another 30% at nominal cost, which it will undoubtedly do, says Asper. Network 10 carried a $50 million price tag, complete with the option of buying the remaining 50%.

Ownership regulations played a particularly significant role when CanWest began scouting for investments in a non English-language country, says Asper.

CanWest looked at acquiring a public network in Romania, but found the language was limited to too small a group. Chile, however, offered La Red Television Network, a three-year-old television station, albeit a far from profitable one, which was transmitting to all major centers in Chile and reaching up to 13 million Spanish-speaking people.

South America’s affordable labor, variety of terrain, and growing commercial environment advertisers wanted to reach, added fuel to the fire. After a year of research, CanWest bought a 50% interest in La Red in June, partnering with Consorclo Periodistico de Chile S.A. (Copesa), a leading Chilean newspaper and magazine publisher.

It was a healthy $15 million investment in a project CanWest has the potential to own, says Asper. Representatives for CanWest lobbied successfully to get Chile into the North American Free Trade Agreement this year, which stabilized the investment in what he calls the most North Americanized of the South American countries.

‘We picked right, but we haven’t proved we know what we’re doing,’ says Asper. ‘The station’s far from making a profit.’

The short-term plan is to simply experiment, he says.

‘We’re discovering what North American expertise is exportable and what isn’t. What is exportable, we’re doing well, and what isn’t, we’re learning. We will be doing local programming, but it’ll be a year before we can gauge our success.’

While La Red tries to move into the black down south, CanWest will be keeping a close eye on the happenings at home surrounding ChumCity’s acquisition of Alberta’s educational network, Access.

The transferring of Access to the private broadcaster from the Alberta government is pending crtc approval. Should it go through, Asper says he will be monitoring whether ChumCity runs the service as a learning channel or as a commercial service.

If Access is operated as a commercial network, it will foreclose the Alberta market for another commercial broadcasting service, says Asper. In that case, the issue of due process comes to the forefront.

‘Those frequencies were given to Access in a non-competitive process, not as public broadcasters. If it’s going to be a competitive service, then we wonder if the frequency shouldn’t be made available for competitive applications. If tvontario suddenly announced it had sold to me, I think there would be a howl, because this licence was granted for educational television, and if it’s not going to be used for this anymore, we should call for competitive applications. I’m not sure this isn’t what the crtc will have to do,’ says Asper.

Challenges ahead

Challenges in the year ahead include reapplying for specialty service licensing. CanWest’s three services, Grown Up Channel, T’ellevision and Headline News were rejected last February. Asper won’t say if these specific services will pitch again, but confirms CanWest will be bidding for a licence.

Streamlining and revamping mitv is high on the agenda. mitv is the umbrella for cihf-tv in Dartmouth, n.s., serving the Nova Scotia market, and cihf-tv 2 in Saint John, n.b., serving New Brunswick.

CanWest bought the stations from New Brunswick Broadcasting in August. In the six years mitv’s been on the air, it has never made a profit. ‘We’re going to have to find creative ways to make a profit in Irving territory,’ says Asper. The Irvings, industrial giants with a virtual monopoly on local media holdings on the east coast, have only recently begun to divest some of their properties.

The sheer size of the Irving family’s influence might intimidate most smaller broadcasters. But going up against the bigger players and winning is something Asper, and therefore CanWest, thrive on.

‘TV3 was dominated by nbc in the u.s. and it went into bankruptcy, so we are smug that we’ve achieved what we have there,’ says Asper. ‘We enjoy the challenge of achieving something a larger company couldn’t achieve.’