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CanWest Global Communications Corp. said Wednesday it will consider selling off assets if the economic downturn gutting the media sector puts increased pressure on its lending agreements with banks.

At the company's annual meeting in Toronto, CanWest chief executive officer Leonard Asper told shareholders the company is considering several “levers” to maintain its debt payments and stay on-side with its bank covenants, which require the company to keep debt to within a certain ratio of its earnings for its various divisions.

CanWest has said for the past year that selling smaller assets was a possibility, but that could be given more of a focus if economic conditions worsen.

With companies across the media sector facing a precipitous drop in ad revenue as business spending dries up, CanWest warned Wednesday that it may be unable to meet one of its financial covenants.

“No stone will be left unturned in terms of meeting our covenants,” Mr. Asper said after the meeting, during a conference call with analysts. “Everything in our entire portfolio is getting a good look over.”

CanWest announced a $33-million loss in the first quarter, compared with profit of $41-million in the same period last year. It said in a statement that “based upon current revenue and expense projections,” the covenant is now a concern.

Though the covenant in question applies only to about $72-million of CanWest's $3.6-billion debt, it is the second time in the past four months the company could be forced to negotiate an easing of its bank covenants. If that route doesn't work, the sale of non-core operations such as CanWest's radio stations in Turkey or, potentially, shares in its Australian TV stations could be explored.

CanWest secured breathing room in late 2008 on those covenants. But the worsening economy has since increased the pressure, Mr. Asper said.

The company's revenue rose 2 per cent to $886-million in the quarter, but publishing and TV revenue dropped more than 7 per cent, reflecting the slowdown in advertising. CanWest owns the Global Television network, major daily newspapers across Canada, including the National Post, and several cable TV channels, in addition to international broadcasting assets in Turkey and Australia.

Across the media industry, broadcasters and newspaper publishers are slashing costs to deal with a drop in advertising that has accelerated since September and did not let up even during the holiday season.

Corus Entertainment Inc., which owns radio stations and cable channels such as YTV and Treehouse, said Wednesday it is lowering profit forecast for 2009. Though Corus made $40.6-million in the last quarter, an increase of 3 per cent, the company is expecting to earn about 5 per cent less this year than originally forecast.

Astral Media Inc., the country's largest pay-TV and radio broadcaster, has so far bucked the trend and reported a profit of $42.4-million, an increase of 13 per cent over the previous year. However, Astral CEO Ian Greenberg told analysts Wednesday that the company will be challenged to maintain that growth.

At Wednesday's meeting, Mr. Asper summed up the apprehension in the media sector these days. “We have no certainty that we are at the bottom; I don't think anyone in this room feels comfortable saying that,” Mr. Asper said. “It's hard to say it's getting worse, but it's certainly not getting better.”