The former Alliance Atlantis specialty channels, now controlled and managed by Canwest Global Communications in partnership with Goldman Sachs & Co., have emerged as a bright spot in an otherwise darkening TV ad business. CW Media Holdings, which includes Showcase and History Television, posted higher advertising and subscriber fee revenues as part of its first-quarter results. But the Canwest subsidiary swung to a steep first-quarter loss after recording foreign exchange losses of $57.1 million related to the influence of a weaker loonie on unhedged U.S. denominated senior unsecured notes.

The CW offshoot saw overall revenues climb 9.3% to $106.1 million, compared to $97.1 million in 2007 on a pro forma basis. During the first quarter, traditionally a strong airtime sales period going into the fall TV season, advertising revenue rose 10.6% to $66.7 million, while subscriber fee revenues were up 7% to $38.7 million on a pro forma basis. The biggest advertising gains came with the HGTV Canada, Food Network Canada, Slice and National Geographic Channel assets.

Despite a higher direct profit, CW Media Holdings posted an overall loss of $53.3 million, against a pro forma profit of $19.1 million in 2007, owing to higher interest charges and the collapsing value of the Canadian dollar last fall impacting on U.S. dollar-denominated debt.

Canwest has a 35% equity interest and a 67% voting interest in CW Media Holdings, while Goldman Sachs Capital Partners holds the remaining interests. Canwest plans to combine its own conventional and specialty TV channels with the 13 CW Media Holdings channels in 2011, exercising an option to buy out Goldman Sachs.

Memos and cuts

But buyout plans are a matter for the future. Right now, everything at Canwest happens in relation to a $3.7-billion debt load. Canwest recently put five of its ailing conventional TV stations on the auction block, retaining RBC Capital Markets to shop E! Entertainment-branded TV stations in Montreal (CJNT), Hamilton (CHCH), Red Deer, AB (CHCA), Kelowna, BC (CHBC) and Victoria (CHEK). Left out of the possible sale are three affiliate E! stations owned by the Jim Pattison Group.

In an internal memo to Canwest Global Communications employees dated Jan. 23, senior executives outlined a freeze on hiring, salaries and travel as part of a stepped-up bid to reduce operating costs. Against a backdrop of ‘significant advertising declines,’ publishing executives Dennis Skulsky and Doug Lamb said the media group had entered a severe belt-tightening phase.

‘The recent voluntary buyout program and cost saving initiatives we have implemented are proving to not be enough to offset advertising revenue shortfalls,’ the internal memo stated.

News of this belt-tightening comes shortly after Canwest said it will scrap Global’s noon newscast from Toronto. Spokesman John Douglas said upwards of 20 employees will be impacted by the program cancellation, though other estimates put the body count at around 35.

The move follows a decision first unveiled in November to cancel Global Toronto’s morning newscast and replace it with a simulcast of Hamilton-based CH’s Morning Live with Bob Cowan and Annette Hamm. Hamilton’s own noon-hour show was cut in half to 30 minutes at the time.

As replacement programming in the noon hour, Global will air its investigative news series 16:9 on Mondays, and lifestyle programming during the rest of the week.

On-air pickups

On the programming front, NBC Universal and Global Television have ordered 12 new half-hour eps of Howie Mandel’s hidden-camera show Howie Do It. The show bowed with 770,000 viewers in Canada, before settling into the 650,000 range. The Canadian-made series has lifted the 18-49 demo for both broadcasters on Friday nights.

Elsewhere, Canwest put in a straight-to-series order for 13 eps of homegrown drama Copper, which came through E1 Television via a first-look deal with producer Ilana Frank’s Thump. The series has financing from the Canadian Television Fund, and is being shopped stateside by E1 Television.

Canwest is also weighing a separate pilot from E1 for Shattered, a crime drama that stars Callum Keith Rennie as a former star cop who solves crimes as a damaged recluse through the use of his multiple-personality disorder as a forensic tool.