Aspers Acquire Black's Newspapers

Aspers Acquire Black's Newspapers

Leonard Asper wrapped up the last bit of business in the $3.5-billion deal that reshaped Canada's media landscape by cellular telephone in a car. Nothing surprising about that - except this was a bumper car at Tinkertown, an amusement park just outside Winnipeg. Asper let his three-year-old daughter, Sarah, drive while he took the call on July 30 to iron out a final wrinkle. The next morning, he was in Toronto, along with his legendary father, Israel (Izzy) Asper, to announce that their family's CanWest Global Communications Corp. was scooping up 13 of the country's biggest daily newspapers from Conrad Black's Hollinger International Inc., along with 136 smaller papers, and even a 50-per-cent stake in Black's beloved National Post.

It was Leonard, not Izzy, who did most of the talking to the startled business media and dazzled investment community. Putting on a display of the calm confidence that had allowed him to be off fooling around with his kids on the eve of the announcement, the younger Asper served notice that he is a different sort of mogul than his driven father. Where Izzy, who turns 68 on Aug. 11, is famous for his bluntness and bluster, Leonard, 36, was all poise and precision. But if the son stepped out of his father's shadow, he has hardly put the old man out to pasture. "There's no doubt that in this deal Izzy was the major player," Leonard Asper told Maclean's last week in a two-hour interview in his Winnipeg office. But he added that he "does take some credit for having designed the strategy" that is supposed to make the ambitious acquisition work for CanWest.

Izzy the hard-nosed dealmaker, Leonard the long-term strategist. That's how company insiders and family confidants sum up the current balance between the two Aspers. Izzy is still relied on when it comes to tough bargaining with the likes of Black. But Leonard is credited with having a vision for meshing CanWest's Global television network, its new stable of newspapers and its all-important new Internet properties. Even though he has an older brother, David, 41, and sister, Gail, 40, both of whom are active in the family businesses, his status as Izzy's corporate heir is now indisputable. He has been groomed for the role for at least a decade - maybe a lifetime.

Leonard Asper has taken his elders by surprise with how rapidly he has put his stamp on the company that had been so much his father's. Peter Viner, 54, stepped aside last September as CanWest's president and chief executive officer to make room for Leonard. Viner had taken on the job two years earlier, with Izzy Asper still playing a dominant role as CanWest's executive chairman. The understanding was that the two older men were preparing the way for Leonard to take over. "He was relatively untried, but keen and smart," says Viner, now CanWest vice- chairman. "It has been a bigger success earlier than we had anticipated."

The first sign of how the kid planned to run things, Viner says, was his decision to "single-handedly stickhandle" a crucial set of Canadian Radio-television and Telecommunications Commission hearings last spring. At stake: CanWest's $800-million bid to buy a string of TV stations from Vancouver's WIC Western International Communications Ltd. There was a strong chance the federal broadcasting regulator would refuse to approve the deal on ownership concentration grounds. "Leonard elected to go before the CRTC with none of the old guard and present a new face," Viner notes. The gamble paid off. Last month, the CRTC approved the acquisition, handing CanWest the stations it needs to turn Global into a truly national network to compete with CTV and the CBC.

It was a long-standing dream of Izzy's come true-under his son's direction. But then, Izzy and Babs Asper didn't raise their kids to be losers. Leonard, Gail and David grew up in Winnipeg's posh Wellington Crescent district with a strong sense of both family and community. In some ways, it was a typical Canadian upbringing. Leonard and David spent hours in the frigid prairie winters playing hockey with a frozen tennis ball in the driveway. They went to cottages and camps in the summer.

But this was no average family. In the early 1970s, Izzy, a tax lawyer, was leader of the Manitoba Liberals, struggling - and failing - to boost the party into contention with the Conservatives and New Democrats. Then in 1974, he turned his attention to making money, founding a new Winnipeg TV station, CKND, and taking over the near-bankrupt Toronto-based Global Television Network. Izzy soon emerged as one of the best-known - and easily caricatured - figures in Canadian business. He chain-smoked and engaged in serial corporate litigation. He quaffed martinis and served up dry quotes with a twist. "Never start a war, but if you're in one take no prisoners," went one of the famous Asper aphorisms. "Never forget the system is based on greed," advised another.

In 1977, Asper and Gerald Schwartz, then a legal colleague, formed CanWest Capital Corp., an investment company that scooped up everything from a fertilizer maker to a life insurance company. When Schwartz split for Toronto in 1983 to form the leveraged-buyout shop Onex Corp., Asper held on to the broadcasting assets and stayed in Winnipeg. Schwartz thrived, but Asper has arguably won bigger. His holdings spread across Canada and have since expanded to New Zealand, Australia and Ireland. Both men are forces, commensurate with the size of the cheques they write, in the federal Liberal party.

For Leonard, growing up as an Asper in Winnipeg meant feeling very visible. He chose to attend a U.S. university - Brandeis near Boston - largely for the anonymity. "That was a good way to get out of my family's shadow," he says. "Those kids from New York didn't care about anyone from Winnipeg." After graduating with a BA in political science in 1986, he went on to the University of Toronto law school. His two older siblings are also lawyers. "Izzy insisted that before any of the three of us could be considered to come into the business we had to be reasonably educated," David explains. By the time Leonard was articling at a Toronto law firm in 1990, CanWest's future as a family enterprise was in doubt. Izzy had been tempted by serious takeover offers. "Around that time," Leonard recalls, "my dad said, 'I love this business, but I'm not tied to it, so unless you guys see any reason to continue it, let's collect our marbles and go home.' "

David had been playing a prominent role in CanWest, but was turning his attention to criminal law - in spectacular fashion, joining the successful crusade to get David Milgaard, who had been wrongly convicted of murder, out of prison. Gail had also worked in senior roles, but decided the demanding corporate life was not for her. That left Leonard. For him, the choice was easy. "I said, 'This is a unique business,' " he recalls. " 'We have a chance to have a big, international, fun corporation.' "

Leonard's apprenticeship was systematic. Working in the Toronto headquarters of Global Television, he spent a few months in each of the major departments, from production to finance, between 1991 and 1993. That fall, at the family's summer cottage at Falcon Lake, 130 km east of Winnipeg, his father told him it was time to move back home. Unfortunately, Izzy happened to raise the subject in front of Leonard's girlfriend, Susan Higgins, who was working in the fashion business in Toronto at the time and had no idea that a return to Winnipeg was in the cards. "We had to pick her jaw up off the floor," Leonard recalls. They were subsequently married, now have two children, Sarah and a younger daughter, Olivia, 17 months, and live on Wellington Crescent next door to David, just a few doors down from Izzy and Babs. Sister Gail lives with her family not far away.

Leonard's return to Winnipeg as CanWest's director of corporate development in 1994 marked the beginning of a new era. He gradually introduced changes in the plush three-floor headquarters at the top of a bank tower at the storied corner of Portage and Main. "We have to move towards more structure and process," he says of the fast-growing company, chuckling about how top executives used to keep track of affairs largely by chatting casually in the hallways. "There was a lot of, 'How're we doing?' I've put in place very comprehensive weekly operating reports." Leonard sees the contrast between the ways he and his father do business as a matter of vastly different experiences. "I just haven't been screwed in business as many times as my father has," he says. "So I probably don't have as cynical a view. I try to get people to do things because they like me and agree with what I'm doing, as opposed to my father, who probably has less patience for that sort of thing."

While father and son have different management styles, there are parallels in their personal tastes. Both love convertibles - Izzy his Mercedes-Benz, Leonard his exotic British TVR sports car. Music means a lot to them - Izzy devoted to jazz and Gershwin, Leonard still clinging to a boyhood enthusiasm for Rush, the thinking hoser's heavy-metal band, and newer hard-hitting groups like Soundgarden.

Izzy Asper has been acutely aware of the pitfalls of soft-hearted offspring assuming control of hard-earned family fortunes. Leonard laughs about how books on family legacies that were frittered away - from the Bacardi liquor empire to the Steinberg retail chain - are "required reading" for the Aspers. "I've read 'em all," he says.

Family friends tend to credit their mother, Babs, for the fact that Leonard, David and Gail appear to have avoided conflict. She is described as a calming influence, compared with her volatile husband. One close acquaintance says Leonard is in some ways more like her than Izzy. But Leonard seems taken aback by that suggestion. "I would have said more like my dad," he says, then revises: "Well, maybe more like my mother 10 years ago. But the more time I've spent with Izzy, the more I've become like him."

One thing that has been passed down undiluted is a staunch loyalty to Winnipeg. A senior CanWest executive, speaking on the condition that he not be named, said keeping the parent company headquarters there, instead of moving to Toronto, where the Global TV network is based, carries a price. Recruiting top media industry talent to Winnipeg can be tough. But Leonard Asper declares that one of his proudest achievements is the coterie of five key new executives he has lured to the Manitoba capital to share his head office's sweeping view of the meandering Red River and, beyond it, St. Boniface Cathedral's elegant white dome.

Besides, Winnipeg has charms that cannot be transplanted. There are Leonard's "non-negotiable" weekly pickup hockey games with old buddies. There are the Salisbury House cheeseburgers he regularly indulges in on his drive home from work when he can't face his wife's penchant for low-fat food. And then there were the looks on the faces around Bay Street when the crew from Portage and Main swept in to grab prize assets of Canada's most famous, urbane, London-based newspaper mogul. During 26 years of tough dealing and steady expansion, the business establishment learned not to count Izzy Asper out. After last week, few are betting against his younger son, either.

The Asper Empire

With the acquisition of virtually all of Hollinger's principal Canadian media properties, CanWest Global would become the largest media organization in the country. The new CanWest Global's major Canadian holdings:

British Columbia

Newspapers: The Vancouver Sun, The Province (Vancouver), Times-Colonist (Victoria); Global Network TV Stations: CHEK* (Victoria), CHBC** (Kelowna)

Alberta

Newspapers: Calgary Herald, The Edmonton Journal; Global Network TV Stations: Calgary, Edmonton and Lethbridge, CKRD** (Red Deer)

Saskatchewan

Newspapers: The Leader Post (Regina), The StarPhoenix (Saskatoon); Global Network TV Stations: Saskatoon and Regina

Ontario

Newspapers: Ottawa Citizen, National Post (50%, Toronto), The Windsor Star; Global Network TV Stations: Global Ontario (based in Toronto), CHCH* (Hamilton)

Quebec

Newspapers: The Gazette (Montreal); Global Network TV Stations: Global Quebec (based in Montreal), CJNT* (Montreal; pending CRTC approval)

Nova Scotia

Newspapers: The Daily News (Halifax); Global Network TV Stations: Global Atlantic (based in Halifax)

Prince Edward Island

Newspapers: The Guardian (Charlottetown)

Newfoundland

Newspapers: The Telegram (St. John's)

Internet

Canada.com, Careerclick.com, Carclick.com, Faceoff.com (80%)

Specialty Channels

Globe Prime, ROBTv (50%, pending CRTC approval)

* Independent stations owned by Global

** CBC affiliates owned by Global

Source: CanWest Global Communications Corp.

Maclean's August 14, 2000