Global Ontario’s 25th Anniversary – From 1974 to 1999

On a cold November night in 1976 at the Global Television studios, three men sit around a table in the midst of a late-night brainstorming session that is dragging on for hours. Israel Asper, Paul Morton and Seymour Epstein, three of the four shareholders in Global Television, are trying to figure out the best way to deal with Allan Slaight of IWC Communications, a 45% partner in Global and its president, who is blocking their active participation in the Ontario station.

The sound of a garbage can toppling interrupts the meeting.

Down one of the hallways in the sprawling complex located in dark, industrial Don Mills, Ont., the men find a caretaker bending beside a bag of garbage, hastily trying to reload the contents that are strewn across the floor.

Not one to avoid getting his hands dirty, Asper bends down to help, only to notice a piece of legal letterhead addressed to Slaight and IWC Communications.

His eyes fix on one of the paragraphs. It relates the details of the buy-sell clause in the 1974 agreement signed by the investors who financed Asper’s original takeover of cash-strapped Global. When triggered by one partner, the buy-sell clause allows the other to sell or buy the company at the price set by the initiating party within a 30-day time period.

The legal memorandum goes on to suggest that iwc should pull the trigger on Dec. 22, since Morton, Asper and Epstein would all be away on vacation and unable to respond until Jan. 5. The other partners would be unable to raise the sufficient capital under short notice and iwc could take control of Global.

First thing next morning, Asper is at the TD Bank persuading the director to extend his line of credit.

In late December, Slaight delivers his ultimatum: he is prepared to pay his partners $6.8 million for Global. Asper and Morton, who share a 45% stake in the station, bide their time, and just prior to the 30-day cut-off march into Slaight’s office and deliver their counter-offer, effectively taking control of Global.

Twenty-three years since that night, Asper helms a Canadian broadcasting conglomerate of which Global Ontario is the flagship station. The CanWest Global system of television stations spans from Halifax and Saint John, to Quebec City, Regina, Saskatoon, and Vancouver. It also stretches internationally into New Zealand, Australia and Ireland. Combined, CanWest Global reaches more than 40 million English-speaking viewers around the world. As the richest Canadian broadcasting network, it recorded 1998 net earnings totaling $51.7 million.

But the path leading to the pinnacle has been rocky. The iwc takeover bid was only one of many battles waged along the way, including many that stretched well into 1998.

Searching for an apt epitaph to last year, which included the well-publicized happenings at the Canadian Television Policy Review Hearings and ongoing criticism of CanWest’s Canadian content performance, one CanWest Global executive suggested ‘The Year CanWest Took a Shit-kicking’.

But nothing has come easily, says Asper in retrospect.

‘It has been put together by the dint of determination.’

The third force

When tax lawyer turned politician Izzy Asper first set his sights on establishing an independent tv station in Winnipeg, he was already looking east for programming synergies at a tiny upstart station in Toronto headed by broadcast promoter Al Bruner and Peter Hill.

In 1973, the Canadian broadcast scene consisted primarily of cbc and ctv affiliates. The crtc, however, was granting licences for new stations in Edmonton, Toronto, Calgary, Vancouver and Winnipeg, where Asper was focusing his attention.

Along with Peter Liba, an executive assistant to the leader of the Manitoba Liberal party, he formed an investment syndicate to raise capital for the project, which included Morton, then an owner of a chain of movie theaters in Winnipeg, and Epstein, a Toronto broadcast engineer.

By the time Asper was filing his Winnipeg application with the crtc in early 1974, the Toronto Global station was already under construction and Bruner offered Asper advice on engineering and sales operations. The two stations made plans to share the same technical staff and began discussions about Global becoming a major source of programming for the Winnipeg station, cknd-tv.

They also began to envision a system of stations sprawling across Canada which would rival the entrenched broadcast networks.

‘Al Bruner and I schemed and dreamed,’ recalls Asper.

‘We were the pioneers of what we called the third force. It was such an outrageous idea at the time – that these little fledgling stations would one day be an equivalent to ctv. We believed that with Global as the flagship there would emerge a strong programming relationship between all the new independent stations.’

The global rescue

At 6 p.m. est on Wednesday, Jan. 6, 1974, Global Television went on air with much fanfare and with Asper and the cknd launch team rooting for their eastern cohorts in the background, even helping out on the launch.

‘Global was to be the front-runner – the first Canadian independent regional station,’ recalls Asper, whose own station cknd signed on almost two years later on Sept. 1, 1975.

But Global quickly fell into a financial hole. Three months after its launch, Global was losing $50,000 a day and went into receivership. Its key investors, Maclean-Hunter and Odeon Theatres of England, were unwilling to put up any more money to save the station.

‘Global hadn’t planned enough financial resources to see them through a slow startup and their program strategy was too ambitious for a startup, especially since it wasn’t getting the audience or the revenue,’ says Asper.

Epstein, as engineering consultant on the Global project, was owed $30,000 for his services and faced personal bankruptcy if the station wasn’t saved. He went looking for help in Winnipeg.

Asper and Morton decided to buy out Global.

‘I always envisioned that Global and cknd would somehow end up linked together but I never expected it would happen this way, through bankruptcy,’ says Asper. ‘We believed in the concept of Global, we were part of it, and we saw our main source of program supply disappearing and just couldn’t let that happen.’

Coming up with the money proved a challenge. Epstein and Asper spent all-night sessions on the phone trying to figure out how to raise the cash.

They rounded up a group of investors, including Allan Slaight of iwc, and with the help of Arni Thorstein, a securities underwriter, raised $2.9 million of the $3.2 million in capital required.

Convincing the Winnipeg investors to invest in a Toronto tv station was a tough sell, says Asper. ‘Our only case was that if Global goes dark, CanWest in Winnipeg will have a hell of a time finding programming to compete against ctv.

‘And somehow we persuaded Toronto Dominion Bank president Dick Thompson that we knew what we were doing.’ The bank came through with a loan to cover the balance.

During the first year after the Global rescue Asper recalls many a night sitting at home in his den and playing over and over again the Global launch music for inspiration, trying to convince himself that it was going to work.

‘I have to admit we were pretty terror struck by the whole thing,’ says Asper. ‘We stood to lose everything we owned. We faced personal bankruptcy. It was pretty scary. If we didn’t pull off the rescue we were doomed.’

In an effort to buoy up the sinking ship, costs were cut, staff reduced and Global went after American programming that would draw large audiences and high revenues.

‘The stars were out of our eyes,’ says Asper. ‘We were facing issues of survival, not art.’

With its excessive play of American programming like Love Boat, Global was soon coined The Love Boat Network, the legacy of which the company continues to carry to this day. Asper says it was pure business sense.

‘Just remember when Global went broke there was no lineup of big money in Central Canada to come and save it – it was considered a lost cause. So you bet we exercised every survival technique we could think of. I would be much more pleased to be The Love Boat Network with several hundred jobs saved than the Titanic, which is what Global was.’

It would take until 1978 before Global would turn a profit for the first time.

The father of Global

In 1952, David Mintz founded kvos-tv, a Washington state tv station which served the Vancouver market. He also ran a West Coast production company which produced some of the original programming on Global, including a coproduction with Hanna-Barbera and an interview show featuring different aspects of Canadian life.

In 1977, Mintz set up a side business – a tv sales representation shop for the four Western provinces – and took on Global as his main client. In the matter of a year, Mintz increased Global’s Western Canadian sales from $70,000 to $1.5 million and expanded the representation into the western u.s.

About this time, Asper began to pester Mintz to leave the West Coast and take on the Global presidency. In 1979, Mintz finally said yes, steering the growth of Global for the next 14 years and taking it from the station with the lowest ratings in the Toronto market to number one by the time of his retirement in 1993.

‘He has forgotten more than we will ever know,’ says Asper.

Rolling the dice

At a 1984 board meeting, Mintz matter-of-factly announced to Global’s board of directors that he wanted to acquire Hill Street Blues and St. Elsewhere, two of the most costly shows on the air. One of the board members asked if Mintz could guarantee that if they spent this exorbitant amount of money it would result in a profit.

Mintz’s response was an honest ‘No.’

‘But I urged them to roll the dice,’ says Mintz. And they did. The following year Global’s profits rose by 35%.

‘I give accolades to Izzy, Seymour, Paul and the board, because without their belief, and the competence of the people who surrounded me, the success would never have happened,’ says Mintz. ‘The board of directors of Global backed me in every recommendation I made. I had the backing I needed to take those chances.’

Mintz’s strategy was to go after top American programming to garner large audiences and begin to compete head to head with ctv.

‘He was the guy who gave us the courage to take risks,’ says Asper of Mintz.

‘Until then we had been lurking in the background, taking what was left over. We didn’t have the financial resources to go head to head with the big boys. But Dave was the push on that.

‘He is the father of Global.’

Mintz’s numerous coups included taking Cheers away from ctv because the distributor had two Canadian shows which ctv wouldn’t take. Mintz agreed to take the whole package.

When he decided Global should have The Young and the Restless, which was on a yearly renewable contract to chch in Hamilton, Mintz made a higher offer but the distributor refused to take it, not wanting to upset chch. Mintz hopped on a plane to New York and made the president of the distribution company aware of the situation. Global ended up with The Young and the Restless.

Once the American programs brought some money flowing into Global’s coffers, Mintz began to add Canadian programming to Global’s schedule, such as the long-forgotten Matt and Jenny. In the early ’80s, before the word coproduction had been invented, Global teamed up with TV South Hampton in England and Reeves in l.a. to produce 26 half-hours on psychic phenomena.

Mintz also recalls the first show he made with Alliance Atlantis ceo Michael MacMillan, a kids’ program called Troopers.

‘Michael brought it in on time and on budget, and when he came to see us and said he had an idea to do 26 half-hours of Canadian short stories, we said you’ve got a deal. And Michael said, ‘Just like that?’ And I said, ‘Just like that,’ and wrote up the deal on a piece of paper. One of those half-hours won an Academy Award.’

Not all of Global’s ventures proved as successful, such as the ill-fated attempt to enter the recording business by investing in TeeVee Records, which was promoted exclusively on Global. The project ended up putting Global $4 million in the red.

To boost its sports ratings and appeal to male viewers, Global purchased the Metro-Croatia soccer team (renamed the Blizzard) for $1.6 million in order to obtain the broadcasting rights to the team. The ratings were dismal and Global eventually unloaded the soccer club after having spent more than $3 million on advertising and cheerleaders.

The auction

On Dec. 14, 1989 at the Richardson Building in Winnipeg, the ownership of Global was once again put to the test. Asper sat in a small boardroom in the building. Morton and Epstein waited in a nearby office. At 9:30 a.m. Master Goldberg, stopwatch in hand, opened the bidding of a secret auction which would award the highest bidder control of Global. The opening price tag was $125 million. Over the next 70 minutes the bid was raised 14 times until Epstein and Morton accepted Asper’s $150 million offer for their 40% share of Global.

The auction was a culmination of an internal power struggle and a deteriorating relationship between Asper on one hand and Morton and Epstein on the other end.

Between 1977 and 1982, Asper had slowly been increasing his stake in Global through a merchant bank that invested in communications companies. The company was a partnership with Gerald Schwartz, but in 1983 Schwartz and Asper parted ways. Asper kept the rights to the name of the company and the new parent company became CanWest Communications.

Asper then made a deal with most of the shareholders to purchase their stake in Global Ventures Western Limited, which gave Asper a 60% controlling interest in the Global Television Network.

Before the exchange was complete and without informing Asper, Epstein and Morton attempted to take control of Global by making an offer to the CanWest board.

In August 1983, the CanWest capital shareholders decided to sell their communications holdings to Asper as originally planned. But Asper’s relationship with Morton and Epstein was on shaky ground. The situation came to a head in 1984 over an agreement with Asper that would have enabled Morton and Epstein to increase their share in Global by an additional 22% for $20 million.

Asper refused to sell and Morton and Epstein launched a $50-million breach-of-contract lawsuit against Asper, who in turn counter-sued his partners for misrepresentation and corporate oppression. The legal battle waged on for five years, producing more than 10,000 pages of testimony and millions of dollars in legal fees.

Throughout the dispute, Mintz continued on as president, staying outside the feud. ‘The dispute was all in the courts,’ says Mintz. ‘Never once did the three partners do anything that was detrimental to the operation of Global. They all had the best interest of Global at heart.’

In fact, during this period Global thrived. In 1987, it became the first English Canadian tv station to exceed $100 million in sales, producing a pretax profit of $20 million.

In 1989, the Manitoba Queen’s Bench Court threw out the Morton/Epstein claim against Asper and gave judgment in favor of Asper’s claim of oppression, ordering that the future of Global was to be determined by auction.

Sward, Shea sign on

By the spring of 1993, Mintz wanted to go into semi-retirement and Asper reorganized the company. Jim Sward, the president and coo of Rogers Cantel Mobile Communications, was brought on board to oversee all Canadian operations and would eventually take over as president and ceo of the Global Television Network. In September 1996, Kevin Shea joined the company as president and coo of Global East which encompasses the Ontario station and CanWest’s properties in Montreal and the Maritimes.

Looking back over the past three years of Global Television’s history, Shea points to the strong improvement in news programming as the highlight.

Up until two years ago, Global’s newscasts were in last place in the Ontario market.

‘When I started, Jim Sward said that if I decided to seriously take a look at how we are going to improve in the area of news, it would take an awful lot of courage,’ says Shea.

Shea took on the challenge and embarked on a complete overhaul of the supper-hour newscast.

‘We turned the place upside down – a new vp of news, added resources, people and dollars, live eyes, helicopters and new anchors,’ explains Shea.

‘Global Ontario is the network hub. We were preparing for this entity to be able to deliver on the whole aspect of national news once we were awarded the opportunity to become a third national network.’

Since the revamping, ratings have jumped from ones and twos to fours and fives.

‘We are neck and neck with cfto’s supper-hour news, which is the dominant market leader,’ says Shea. ‘We have clearly moved into second place and pushed cbc and Citytv out of the way. This has been incredibly rewarding to me and a tribute to our news management team here at Global.’

CanWest enters production

Asper’s long uphill battle towards the goal of national coverage finally arrived in 1997 when CanWest concluded a long-term, full program supply output deal with WIC Western International Communications for all CanWest programming to be broadcast throughout Alberta. By Sept. 1, 1997, 88% of English Canada was under its signal.

The national system was rebranded under the name of its flagship Ontario station – Global Television Network. Another coup came in 1998 when an agreement was struck with Shaw and CanWest Global began the process of acquiring the television assets of wic.

By this time next year, the national network dream may be more complete as the Aspers take ownership of wic’s Alberta stations, provided the deal with Shaw Communications goes ahead as planned.

But looking back, Asper views CanWest Global’s entry into tv production with the 1998 buyout of Fireworks Entertainment as the most crucial of Global’s recent milestones.

‘That is probably one of the most important moves we will ever make,’ he says. ‘A broadcaster is an exhibitor and scheduler and developer of audiences, but at the end of the day it comes down to the product. With so many new technologies, like the Internet and satellites, programming rules the roost.’

Looking forward, Asper says the next big challenge for Global is in Canadian drama, although he hastens to add that Global’s record with Canadian programming is not as bad as its competitors make it out to be.

‘Global’s Canadian drama programming has double the viewing audience of ctv’s drama programming – that’s a little known fact,’ he says. ‘The Outer Limits gets the largest audience of any Canadian show and Traders has beaten er on a few occasions. At the end of the day, it matters if anyone is watching, and our Canadian programming is well watched.’

‘We are on the cusp of producing some decent Canadian drama, Robert Lantos notwithstanding,’ says Asper, referring to comments made about CanWest by Robert Lantos upon acceptance of an award at Ryerson Polytechnic University, and which has spurred speculation that CanWest Global will file a lawsuit.

‘Robert, we are going to deal with,’ says Asper. ‘What he did was absolutely an hysterical tirade that is malicious, probably defamatory and not true. He provides us with a good opportunity to refute the lie and we will.’

Asper will not comment on whether this will result in a lawsuit, but says ‘Let’s put it this way, we are going to prove that his allegations are unfounded.

‘CanWest Global will enter the next millennium with the capacity to produce first-class exportable Canadian programming. We are now in the position to take the system to a much higher plateau.

‘I think our best days are ahead of us.’