Leonard Asper’s bright, white new offices in mid-town Toronto appear locked in a time warp, as if it’s 2002 all over again.
Walls are lined with memorabilia of his late father Izzy, newspaper pages of business triumphs, and a book on the glorious first 20 years of CanWest Global Communications Corp., which the Asper family built into the country’s third television force.
It is a jarring reminder of how far, how fast, Leonard has fallen – from CEO of Canada’s biggest media company to seeing it slip away in bankruptcy protection and asset sales. Now, he is reconstructing his career on the platform of a “combat sports” TV channel.
Mr. Asper, boyish-looking in blue jeans and blazer, explains that he is randomly pulling stuff out of boxes to fill his bare walls. Still, this immersion in past glories fits with his mindset – that CanWest’s demise was an unlucky accident, one bad break in a lifetime trajectory of success.
Asked what he learned from the collapse, he says: “It was a comet hitting the Earth, basically.” In hindsight, he might have built better safety cushions in CanWest’s debt-heavy capital structure, but he could not have anticipated the worst financial meltdown in 80 years.
“We had cushions for every possible normal eventuality, but probably not for Halley’s Comet,” he says.
It is a response that will anger critics who believe Mr. Asper, by loading up on debt for big, fanciful acquisitions in newspapers and specialty channels, placed CanWest in the path of the onrushing fireball.
But in the education of Leonard Asper, the big lesson is that life occasionally hands you a beating – and then you pick yourself up off the canvas and start punching again.
He recognizes that outsiders will take their shots, but insists he knows best the inside story of how he tried to save the company. “I have enough friends in the financial and business world who know what happened, and no one is saying to me, ‘You screwed up.’ I try to give myself a very hard cold analysis about what happened and I think I did what I could.”
If CanWest could have just held on for another quarter, the economic rebound could have lifted it through the crisis, he concludes – which means we might be sitting not in the nice-but-nondescript offices of his holding company, but on the 31st floor at Winnipeg’s Portage and Main, where he once ruled as a media titan.
This positive frame of mind comes naturally – he works out a lot and doesn’t lose sleep in the most trying times. He will need this detached composure as he strives to be a player again, which he believes is within his grasp.
“I just know what I can do – I just know what it takes to succeed. I am 100-per-cent confident that I’ve got it,” he says.
This is the first time since the breakup of CanWest that he has talked openly about the debacle – though he is clearly more interested in discussing Fight Network, the specialty channel in which he recently bought a 30-per-cent interest, with an option for majority control.
If CanWest was Izzy’s baby, the Fight Network is Leonard’s newly adopted wild child, a scrappy street fighter that speaks to his inner Sugar Ray Leonard. But he insists it is not about forging a comeback because he hasn’t really gone anywhere.
“I won’t ever acknowledge there is some place to come back from. Just mentally and intellectually I can’t get my head around that. I look at it as ‘what happened, happened.’ ”
He is saddened over losses to shareholders – which include himself – and for some former employees. Still, “it was not some epic failure but I look at it as the ups and downs of business.”
Mr. Asper’s undimmed entrepreneurial flame seems rational when you consider that, even after being CanWest CEO for more than a decade, he is turning 47 this month. He is only four years older than his lawyer father Izzy was when, reeling from political setbacks as Manitoba Liberal Leader, he plunged into the broadcast business. Among his key acquisitions was a rival TV station KCND in North Dakota, which he packed up and moved to Winnipeg.
The Fight Network is Leonard’s KCND, a small asset on which he hopes to build a big company. He says he is in a much better position than his father in the mid-1970s, because he has the positive legacy of CanWest to grow on – great experience, wide global contacts, and good personal wealth still in hand.
When Izzy bought KCND, he had little hands-on business experience, but he leveraged his Winnipeg assets to buy into a new Toronto-based superstation called Global, which had fallen on hard times.
Thus began the turbulent saga of CanWest Global, which the older Mr. Asper built into a national network to rival CBC and CTV. Izzy Asper had three lawyer children, and in 1999, he promoted his 35-year-old youngest son Leonard to CEO, with David and Gail playing roles in philanthropy and real estate and on the CanWest board.
With visions of cross-media synergies, the Aspers stunned the business world in 2000 by buying the Southam newspaper chain from Conrad Black for $3.2-billion.
But Izzy Asper died suddenly in 2003, leaving Leonard alone holding the reins. To fill CanWest’s vacuum in specialty TV channels, Leonard in 2007 bought Alliance Atlantis Communications Inc. and its stable of channels for $2.3-billion in a controversial partnership with U.S. investment bank Goldman Sachs.
He argues that the deal has turned out to be “an absolute winner,” and he would do it again tomorrow. It buoys Mr. Asper’s self-confidence as a deal maker in his own right as he takes another run at the brass ring.
But there is one clear regret – he should have relied less heavily on debt and more on equity to buy newspapers, which proved to be a non-growth asset. That decision, of course, was made with his father at a time when the marriage of TV and newspapers was trumpeted by the Aspers as magical.
Even so, that debt proved manageable for nearly a decade, he insists, until the global economy went south in spectacular fashion. The newspaper subsidiary breached a covenant, and blood-smelling hedge funds exploited the wound and circled the entire organization.
In other recessions, he might have ridden out the crisis through refinancing and asset sales, but the historic credit crunch shut down such transactions. There were reports in early 2008 of a bid for CanWest’s Australian interests, but he insists he never saw a solid offer.
The one firm bid, he says, came right on the eve of the financial crisis, when an unidentified player was poised to buy the Australian unit. A solution was at hand, but Lehman Brothers collapsed and the world plunged into freefall. The window closed.
He resigned as CEO in 2010 and made a futile bid to hold on to the television interests. In the final selloff, the broadcast part went to Shaw Communications Inc. and the newspapers were wrapped into a new company, Postmedia Network Canada Corp.
Leonard says he is hardly blasé about the outcome – “I’m very pissed off at what happened” – but he wants to do his talking through his actions. “I like business, the rough and tumble, and I just want to go back to what I was doing at CanWest – every day I walked in and asked how we could do it better.”
He is heartened that so many older, successful entrepreneurs had a “CanWest moment” in their earlier careers – such as gold baron Peter Munk who as a young man was at the helm of a consumer electronics firm that flamed out in the 1960s.
Mr. Asper feels Canada, and particularly its media, is brutal in the treatment of entrepreneurs who try and fail and try again. Contrast this to the United States where entrepreneurs shoot for the stars and when they miss, pick themselves up and do it again without being stigmatized as unregenerate losers.
On Bay Street and in the broader Canadian business world, the serious players aren’t nearly as hard on each other, he points out. They accept the hard knocks of commerce, where winners are never as smart as they look and losers never as stupid. “It’s a lot like hockey. Someone loses a playoff game when the puck goes in off a skate but it could have gone the other way at the other end.”
And he does not speculate on whether the wily, combative Izzy might have wriggled out of the final CanWest crisis. “I try not to think of it, because I think you’d kill yourself,” Leonard says. He just knows that life can dish out second acts – he points to the old Winnipeg Jets souvenir rug under his meeting table. He likes to paraphrase the counsel of his father’s onetime partner, financier Gerry Schwartz: “You’re young, you have money, you have time.”