Black Press founder joins CanWest paper chase

VICTORIA and TORONTO -- B.C. newspaper magnate David Black is making a bid for CanWest LP's chain of dailies, adding a major industry player to an auction that has now attracted a half-dozen groups.

In an interview at his home office in Victoria, Mr. Black, founder of Black Press Ltd., said he is convinced there is a profitable future for newspapers and that the current industry malaise is due to recession and heavy debt loads, rather than a fundamentally dead business model.

"There might be an opportunity to step up and run something bigger in Canada - and hopefully we can do it well," he said.

If successful, Mr. Black - no relation to Conrad Black - would suddenly become the country's largest newspaper baron and the owner of titles such as the Montreal Gazette, Vancouver Sun and National Post. But he is up against a number of other interested parties, including one group led by National Post president Paul Godfrey and a second that includes community newspaper publisher Glacier Media Inc. of Vancouver.

Officials close to the restructuring say they believe there are at least six potential bidders, a number that is based on conversations with potential suitors. That would make for busier days for the bankers that will assess the offers, as only two or three serious groups were expected to go for the assets a month ago. But it is not known exactly how many will officially step forward.

Mr. Black didn't indicate how he would finance his bid for CanWest's 46 newspapers, which include 11 urban dailies.

He strongly suggested he has significant backing, saying that in order to win the CanWest auction, a bidder must have its financing secured.

Creditors of CanWest LP, led by Bank of Nova Scotia, have indicated they will take the company public if they do not receive at least $950-million for the assets. CanWest's newspapers have been operating under creditor protection since January.

Sources said the most likely backer of the Black bid is Platinum Equity LLC, a California private equity firm.

Platinum Equity would not comment, but Mr. Black is close with the firm, which recruited him as a consultant to help it enter the newspaper business last year with the purchase of the San Diego Union-Tribune. Mr. Black continues to consult for Platinum Equity on the Union-Tribune and last year also was involved with its failed bid for the Boston Globe.

Restructuring officials will spend about a week to 10 days after bids come in to determine which are the most serious and go from there. The final contenders will likely visit each major newspaper to hear detailed presentations from local management. A sale is expected to be completed by April.

It is not clear what will happen to the CanWest papers after that. While the creditors want a single bid for all the assets, what the winning group does after victory is not known - and some observers have said the assets could get divided.

Glacier is said to want CanWest's 35 community papers. Mr. Black, whose firm owns only a handful of daily papers, indicated he wants to run the big CanWest city papers, as well as the community papers - many of which currently compete with his own papers.

In Vancouver, CanWest owns both dailies, the Sun and the Province, but Mr. Black said closing one isn't evitable, suggesting it may be more profitable to run two.

Mr. Black is known for running lean operations. At the Union-Tribune, a quarter of the staff have been laid off, though Mr. Black insists the paper is as good today as it was before Platinum equity bought it. In Honolulu, he is in the process of consolidating two newspapers into one, leading to "quite a few [layoffs], unfortunately."

He is not, as some critics charge, a savage capitalist. Now in his early 60s, he has run newspapers since he was 29, and he said it saddens him that the only business answer in Honolulu is to shut down one of the dailies.

"There just isn't the money there used to be. It's a shame," he said. On seeing the city go to one from two papers: "I think you've lost something that's quite important."

With files from reporter Tara Perkins in Toronto