CanWest Global Still Thinks It's About the Channels

CanWest Global Communications Corp. (CWG) with GS Capital Partners are spending CDN$ 2.3 Billion to purchase Alliance Atlantis. GS Partners will take the CSI franchise, CanWest gets the rest. The purchase price will be allocated according to EBITDA. So it'’s very difficult to determine the financial impact on CanWest.

GS Capital Partners clearly is taking the hot content property. CanWest is bulking up with more specialty channels and is making comments about how this will improve programming and help promotion. CanWest has a very traditional old school view of media given its concentration on TV Stations and Print Media. The internet offerings are anemic and internally costly.

At the same time you have Yahoo (YHOO) and Akimbo announcing new video delivery deals. Google (GOOG) swallowing Youtube. CBS Corp. (CBS) said Tuesday it will broadcast user-generated video from Google Inc.'s YouTube before the Super Bowl. Also CBS is partnering with Sling Media Inc. to allow users to post clips from TV shows on the Web and share them with friends. Furthermore on Tuesday, Apple's (AAPL) CEO Steve Jobs announced Apple TV that connects televisions to computers and the Internet.

CanWest still thinks it'’s about the channels. CBS will now manage 100% of international distribution for CSI. CanWest is probably shooting its foot off.

CWG 1-yr chart: