Back in 2010, when the late Izzy Asper's media empire was in its death throes, a wake of bond vultures got busy buying up Canwest debt at peanuts on the dollar. They installed seasoned political operative Paul Godfrey as their titular figurehead and before you knew it, Canada was rocking a brand spanking new media conglomerate under the PostMedia banner.
As an investment by the vultures, the new entity has thus far honoured at face value the obligations the vultures bought up for peanuts. As a newspaper chain, it has the most readership of any media conglomerate in Canada. As a viable investment for regular folks it's been dead in the water and circling the drain since the get-go.
That's why the news that somebody paid real money, albeit not a lot of it, for almost 20% of the company left me flabbergasted. Everything at the former Canwest that can be stripped, looted, or outsourced has been, ages ago. They're an industry leader in the exploitation of unpaid interns. Their real estate is long gone in sale-leasebacks. What's the attraction? There is no possible upside by standard investment metrics.
But I think I've got it figured out.
The 11 millions Ed Mule paid for his 20% share of Postmedia is pocket change. It got him a coast to coast newspaper network with big schlep in Ottawa and some of the provincial capitals. This isn't a financial investment; it's an investment in a bully pulpit.
If you want to guide Canadian public opinion to happy thoughts about trade agreements, pipelines, tar sludge, Iran... whatever, what better way to do it than with the nation's biggest newspaper network?
As a potential profit centre, Mule has vastly overpaid for his slice of Postmedia.
As a PR platform he practically got it for nothing.