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Gordon Pitts

With $2-billion deal for CanWest, Shaw wins battle of media titans Add to ...

Thirteen years ago, the battle for control of broadcast giant Western International Communications escalated into a bitter personal showdown between two ambitious Western Canadian families: the Aspers of Manitoba and the Shaws of Alberta.

Patriarchs Izzy Asper and JR Shaw met at a Toronto hotel. Only two other people were at the dinner – Izzy’s younger son and heir apparent, clean-cut lawyer Leonard Asper, and JR’s oldest child, goateed biker guy and college dropout Jim Shaw.

Yesterday, Jim Shaw, 52, now CEO of cable giant Shaw Communications Inc., cemented his family’s legacy with a $2-billion deal, while Leonard Asper, 45, lost his family’s legacy.

With the purchase of the distressed broadcast assets of CanWest Global Communications Corp. from Goldman Sachs, the Shaws join mega-players CTVglobemedia Inc. and Rogers Communications Inc. in the major leagues of private media empires.

Before his death in 2003, Izzy Asper, the builder of CanWest, said he suggested at the meeting on Western International Communications that the two families carve up the company’s Western broadcasting assets. The Shaws rejected a deal, he said, deciding to battle for the big prize.

Scruffy, irreverent Jim Shaw got the last word in, summing up his family’s disruption of Izzy Asper’s expansion dreams. “We really shook his peaches,” he crowed to a reporter afterward.

That comment set off two more years of bitter bidding wars and courtroom battles, and millions of dollars in added costs, until CanWest and Shaw finally split the WIC assets much as Izzy Asper had predicted.

Yesterday, Jim and JR Shaw shook those peaches right out of the tree with a deal that includes the stations that Izzy and Leonard Asper had acquired at such expense in the WIC agreement.

The peaches comment had turned the younger Mr. Shaw into a media darling, and won him the enmity of the Aspers. Most observers said it was Jim being his wacky, unpredictable self. He’d say anything to get a rise out of people, according to conventional wisdom, while the charming, crafty JR pulled the strings.

Today, the broadcast titan of the West is clearly Jim Shaw, who snorts and paws in a reasonable imitation of the prairie buffalo in the metal sculpture outside Shaw Communications’ Calgary offices.

The buyout of the CanWest broadcast assets from Goldman Sachs is the most important deal Jim Shaw has done, and another chapter in a life of being underestimated.

Even yesterday, he was in danger of being eclipsed by his father. While this deal is Jim’s game, JR at 75 plays a key background role, and, according to some in the Asper camp, is still trying to score points from the bitter WIC battle.

“Change is in the air,” Jim said yesterday in a conference call.

The Shaw family came out of western Ontario in the 1960s, when JR’s father, Francis, had his irons in a lot of fires, from building pipelines to hauling pigs. Young James Robert (JR) Shaw moved to Edmonton to run the family’s pipe-coating business, and, in 1970, acquired the new cable TV licence for the Alberta capital.

He left the family fold (while remaining a shareholder), consolidated the nascent cable TV business in the West, and edged east to challenge other industry pioneers. The Shaw story became interwoven with the ambitions of another cable entrepreneur, Toronto’s Ted Rogers, leading to a game-changing swap of assets during Mr. Rogers’s takeover of Maclean Hunter Ltd. in 1994.

While JR built the empire, Jim dropped out of school and took more interest in Harleys than coaxial cable. He did landscaping and odd jobs, living on burgers and beer.

JR wondered why he had accumulated all the cable assets when his son seemed so indifferent. That precipitated a showdown at the son’s apartment in Victoria. The two had dinner. JR made his pitch and went to bed; Jim didn’t sleep a wink. The next morning, he told his father he wanted to run the business some day.

The father, who changed his legal name to JR to avoid confusion with his son, often seems bemused over the younger man’s personality. “Jim does things differently – very casual. He’s his own person,” he once said.

But media peers say Jim’s laid-back style conceals a driving competitive spirit.

Others like the way that Jim, as a family scion, has allowed professional managers to handle day-to-day operations, and say he is strong in customer service.

“He has the outward appearance of a cowboy, but he’s not a stupid hick. Boy, I tell you, he has made some sharp moves,” Toronto broadcast tycoon Allan Slaight once said.

JR managed to bring the entire family into the business. He put together radio and TV broadcaster Corus Entertainment Inc. partly for daughter Heather, with veteran media executive John Cassaday at the helm. A younger son, Brad, has taken a key operational role in Shaw, and another daughter, Julie, has been in and out of the company as a facilities manager.

Jim insisted yesterday there is no thought of combining CanWest with Corus.

Except for the Corus spinoff, the cable company stayed largely on the sidelines during the media acquisition frenzy, a sharp contrast with the empire-building Aspers, who accumulated billions of dollars of debt in the name of media convergence.

As for Jim Shaw, he insists he will continue to shake the peaches. “I’m traditionally a nonconformist,” he once said, “and the day I conform is the day I won’t be here.”

 

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