Canwest sells stake in Score Media

16.5 mil class A shares go for $8 mil

TORONTO -- Debt-strapped Canwest Global Communications has sold its first assets in its bid to stay solvent, selling a stake in rival broadcaster Score Media for about CAN$10 million ($8 million).

The Winnipeg-based company on Wednesday sold 16.5 million class A shares in Score Media, which operates Canadian cable sports channel The Score, to the broadcaster's majority owner.

Toronto investment bank RBC Capital Markets also is shopping five E!-branded TV stations and fielding possible bids for the 13 cable channels that Canwest Global controls and manages in partnership with Goldman Sachs & Co.

The sale comes ahead of a Friday deadline for Canwest Global to renegotiate with its bankers borrowing arrangements to prevent it from breaching debt covenants. Canwest is carrying a $3.13 billion debt load.

The distress sales at Canwest Global are also the latest sign of trouble for Canadian broadcasters due to an ongoing collapse in advertising revenue.

Pubcaster CBC disclosed that it faces a projected CAN$65 million ($52 million) revenue shortfall for the current fiscal year ending March 31.

"We are still working away at finalizing plans. Nothing has yet been determined," CBC president Hubert Lacroix said in an internal memo to staff Tuesday in which he addressed the possibility of job and programming cuts.

The pucaster has asked the federal government for a bridge loan to avoid drastic cost-cutting moves in the short term but is concerned about ad revenue over the next 12 months.

"The more pressing issue is our budget for 2009-10. The combination of a severe slump in our commercial revenues, coupled with rising costs of production, is a menacing test that will demand some tough choices on our part," Lacroix wrote.

Elsewhere, despite a thriving cable business at Quebecor, the Quebec media group on Wednesday posted a narrowed fourth-quarter loss on asset writedowns.

Montreal-based Quebecor said that it lost $276 million, after recording a $538 million non-cash impairment charge, mostly to write down the value of its struggling newspaper business.

Quebecor revenue rose 3.9% to $800 million, as it pulled in more cable and wireless phone subscriber fees.

Elsewhere Wednesday, rival CTV said it is shutting down two broadcast TV stations in southern Ontario because "the traditional economic model for Canadian television is broken."

The current license for CKNX Wingham and CHWI Wheatley are set to expire at the end of August, and CTV will not seek their renewal at upcoming regulatory hearings, the company said.