In one way, CanWest Global Communications chairman and founder I.H. Asper has never left his home province of Manitoba. But between his purchase of a small TV station in 1975, and his choice today to keep one of Canada’s largest media empires headquartered in Winnipeg, Mr. Asper has traveled far and wide. The one-time tax lawyer and politician has built what was once Canada’s smallest national television network into a media powerhouse that owns 16 TV stations, 7 specialty channels, 120 community newspapers, and 26 daily newspapers, including the National Post. Earthy, frank and expansive, Mr. Asper reflects, projects and muses about his life and many businesses.
IN HIS 40-YEAR CAREER, I.H. “IZZY” ASPER HAS REINVENTED HIMSELF MANY TIMES. HE HAS VARIOUSLY BEEN A LAWYER, JOURNALIST, EDUCATOR, POLITICIAN, ENTREPRENEUR AND IN HIS LATEST INCARNATION, AN INTERNATIONAL MEDIA MOGUL.
While almost single-handedly building the CanWest Global Television Network from a single station into Canada’s third national network (and arguably the most profitable), Izzy Asper has held fast to his vision of having a major Canadian multinational corporation based in Winnipeg. With the acquisition of the Southam newspapers and the National Post from Hollinger, CanWest Global and Izzy Asper are now a major force in Canadian media. Mr. Asper met with IBJ in his office overlooking downtown Winnipeg.
that…” I said, “I’m telling you, you did. You’ve been snowed by your guys and you don’t realize the ramifications.” It wasn’t only the NEP but a bunch of other stuff. I could read you incoherent tax legislation that’s still there from those days. Incoherent. No human mind could understand what the law is and you’re bound by it.
So anyway, it didn’t work. Our shareholders got antsy, their banks got antsy, they kept calling and pleading for dividends. They couldn’t service their own debt, they pleaded for us to sell assets, and I refused because we were building and growing and we weren’t in business to make money by selling companies. The pressure became utterly intense. The directors rebelled, sold one of our prime assets over my profound and vigorous objection. I was heartbroken and I was supposed to be out of business in ‘87, made it my final career…and when I realized what they were doing I blew the whistle and said “Okay, we’re going to liquidate and I’m going to buy you out.” It took me until ‘84 to get them all paid…sold all the companies except communications.
I bought them all out, mortgaged up to the eyebrows and recreated it, but I couldn’t get out now. I had all this debt. So I didn’t get out of business. Then a year later the Global war began because my colleagues decided that I was in a weakened position and that they could do some very unpleasant things and get away with it. And we fought, and that war lasted five years in court. So it was only in 1989 that I could now say okay, the Global war is over, we now know what we own, and now it’s time for me to leave.
I made a rule that no kids came into the business. I don’t believe in nepotism and I don’t believe in dynasties. But my daughter was practising law in Halifax and was talking about starting up a family. …Her husband was a student in Halifax, but she wanted to move back to Winnipeg.
So I said move back to Winnipeg and we’ll get you into our company law firm and you’ll spend your time doing our legal work. To which she replied, “Why should I go to some law firm, I’ll come into CanWest and do the legal work in there.” I said, “That’s probably a better idea.” And so she did. Then Leonard said, “I thought we had a rule here, no kids in the business.” And I chauvinistically said, “Come on, nobody’s in the business, just your sister practising law.” So Leonard said he was coming in. And David said, “Wait a minute”…he was practising criminal law so I couldn’t say no.
So now not only could I not get out, I had to train these kids because they said they wanted to take it very seriously. They really liked what I was doing and they said “that’s what we want to do.”
So five years ago having planted the seeds, I said okay, we’ll begin the process of getting me out. And the first step is I’ll give up being CEO, but none of the kids were ready. So my dear friend Peter Viner who’s been with us since day one (He got to Global exactly three weeks before I did. He was the sales manager before it went bankrupt) said okay, I’ll take it. He was my President in Australia. And I said, you’ve got to come home and get me the hell out of here. He said okay, fine, but let me work with the kids for two-three-four-five years, and I’ll tell you when and which of them are ready and that’s when I’m gone. Peter had done quite well in our stock and he didn’t need the travails. And he wasn’t a Winnipegger, his life was really in Sydney or Toronto. So anyway about two years later he declared, “You guys decide amongst yourselves who you want to name and I’ll mentor them for a little while,” and then of course he stayed, he’s still with us. So the kids decided on Leonard. Leonard had the personality and the disciplines.
But it’s got to be difficult. These are your children as well as your successors.
You’re talking about the enormous growth in these last five years. It’s because I stepped out of being CEO that we were able to achieve everything that we got done. Because there was a guy, me, who had 30 to 40 years of Experience who was now sprung, who is free now to do nothing but think and say what we have to do. Because when you’re the CEO the job is nothing but putting fingers in dikes, putting out fires all over the place, never getting what you want to do, never getting it done…because you come in, in the morning, determine the day, take a look at whatever. Maybe then somebody walks in says hey we’ve got an explosion or whatever and some prima donna is doing this…so that’s the morning and then you come back in the afternoon, there’s 30 phone calls and faxes, etc.
But once I got out of having that day-to-day routine, that was when I said okay, guys, here’s what we’re going to do.
I’m going to load you guys up with so much action, so much debt, that you can’t get into any trouble for the next five years because you’re going to grind away to perfect that. And by then you’ll all be five years older and I’ve seen that anything that can happen will happen. So that’s basically what we did.
For the first time in the history of the company, there was one person who had the vision of where we wanted to go. Doing a deal with Conrad Black on the newspapers, if you had a day job…you’d put it away and go at it again and then something else would intervene. Unless you have the time and patience to massage things and conceptualize them again and that’s the best use of any person who’s been around for 40 years. You really have that humongous bank of knowledge to draw on about how to do things and when to do them.
Why did you do that deal with Conrad Black?
Why did we do it? Well, I don’t know where to start. So in no priority: It took me 25 years, scratching, kicking, clawing, against absolutely brutal resistance, getting a national television network. Whatever could be done to stop us was tried. It’s quite a remarkable story. And it’s the first time that any single person has ever built a national television network in the United States or Canada. There’s always somebody to stop you—partners, shareholders, regulators, laws. And it took 25 years to get there. Here with a stroke of a pen you could have a national print network in a matter of hours, not 25 years, so the only issue was, do you want to be in print? I’ve engaged a writer to tell the Southam story, and I can tell you it took the Southam Group 100-125-130 years, at least that, to amass and put together a national newspaper chain, and here we were able to acquire at what will turn out to be a reasonable price, albeit certainly not a cheap price…but when you think about what it would cost you to get there the hard way, the way I know, Global, it was a piece of cake compared to that.
I really believe in, I won’t use the word ‘convergence,’ but I really believe, if you’re running television in Canada, then you’ve got to also be in the production business, you should also be in the print business, you should also be in the outdoor advertising business, and you should also be in the radio business…if that’s your sphere of interest.
So in business terms it was a good outlet, and here it was all laid out. It didn’t start out that way. I’ll tell you how the deal developed sometime.
But the third reason was that about five years ago, as I started to get more time to look at the world, we began to feel a bit threatened—by globalization and international trade, and the Canadian and American governments more or less coalescing and fusing the two economies. It was just a matter of time when all the television product that we buy now would no longer be available to us because NBC would buy all the North America rights and be broadcasting Friends or whatever the top shows are to you via satellite or cable, and we Canadian broadcasters would not have top, international product. So we believed we’d better strengthen home base. One of our unfinished things by the way is we have to get into the United States…for the first time we’re seeing, because of the economic situation, a viable opportunity in the United States.
We felt we had to strengthen home base and there was nothing more the regulators were going to let us do in Canada. Rightly or wrongly, for good or bad, size is not particularly encouraged in Canada. For example, when we arounds and in a turnaround the magic hour is when your cash becomes positive and the bleeding ends. Then you have options. Until then you have no options. You have to win on every roll of the dice. Australia was a receivership. New Zealand was a bankruptcy. Ireland was licensed 10 years earlier, but the guy couldn’t figure out how to put it on the air. Now it’s possible…two years out it’s profitable. Winnipeg start-up, Regina start-up, Saskatoon start-up. …And we had to prove to the CRTC that they were economically viable.
Why is that? When you tried to set up those stations, the CRTC blocked you. And when you tried to buy the Alberta stations they blocked you.
In the first one you mentioned, not only did the CRTC question my ability or want to protect the local guys on the ground, but even when they granted the license, the ‘very reverend” Mulroney stepped in and for the first time in Canadian history, he quashed the CRTC license. And I’ll probably take to my grave the confidences I was given about what was being said in the Cabinet. It was essentially political.
You alluded to the United States, obviously you feel very strongly that CanWest Global is not specifically a Canadian company, it’s a company working within a world universe.
I hope so.
And that as a consequence, you’re going to have to grow within the North American market a lot more than you have in the past?
Do you see anything on the horizon that you could talk about at this point?
I can’t predict which way it will go. We are flexible in which venues we take in the United States, but there’s no question we have to be in the United States, whether that’s in broadcast television or production. Our production unit is getting into the United States. A lot of our production material is being shown in the United States, and Fireworks is now selling stuff in about 100 countries and developing credibility with the outlets.
But we have to be in the United States. We don’t have a choice. We’ve been in the United States. When CanWest was a multifaceted company, we were in life insurance: We had Monarch Life here and we had Crown Trust in Toronto, we had Canadian Realty Trust…and we had John Alden Life in Florida. Its profits dwarfed the Canadian’s all combined. We were the first over-the-air pay television broadcasters in Boston…Boston, New Orleans, Albuquerque, Baltimore… I’ve got blood all over me to prove it, back in the ’70s. So we have a feeling for the United States, but we’re also aware of the fact that there are too many Canadians who think that Americans are just like Canadians, and they’re not. You can’t take a Canadian approach in the U.S. because you’re not competing with Canadians. You’re competing with Americans who have a different culture and a different perspective on what you do.
And the velocity of change in the United States is staggering. One year NBC is No.1. Next year NBC is a bum at No.4. We’ve been No.1 in our target demographics here for years and we’re spoiled. Our managers have learned to understand that by being in places like New Zealand, which is highly local; Australia is even quite local. We run a breakfast show in Ireland—they’ve never had a breakfast show in that country, and they’re loving it. It’s doing very well, but boy isn’t it tuned to the local scene?
Americans on the other hand are worse exporters than we are. Canadians are very sensitive to the local dynamics, because no one is sensitive to ours, so we have this natural inclination to be very respectful of the demographics and the character and the personality of where we go. The Americans think every place in the world is Milwaukee. They really do. And so whatever works in Minnesota has to work in Tanzania. We took over New Zealand which was bankrupt from NBC…how can NBC go bankrupt in New Zealand? Because they thought it was Milwaukee. And there are a lot of examples of the same thing.
You have been very visible in your support of charities, of schools like the University of Manitoba, the things you’ve done in the city of Winnipeg. You have the Asper Foundation that you’ve set up which your daughter is running. Why are you doing this?
I am the offspring of immigrants, and Prairie immigrants at that. And these people who would otherwise have been cinders in one of Hitler’s ovens have a great sense of gratitude to Canada for offering them shelter…people arriving with no money, people arriving not being able to speak a word of English from all over the place. And so you get taught that you owe and you have an un-discharged debt to this country. And there’s also that Prairie thing too. We’re not communists…we don’t say we’re our brother’s keeper, but we do say we’re our brother’s helper. And that’s part of the culture in the Prairies.
Out of that immigrant background, you develop a sense of commitment. That’s why I went into public life. All I wanted out of my career in politics was to be premier. The reason I wanted to be premier is because I had a vision of what I could do with Manitoba to create prosperity for all the people who were being exported because there were no opportunities. Unfortunately the public got this offer and found they could refuse it, and so. …But public service is something I feel very strongly about. I think everyone has a debt. I didn’t pay for my university education. I wouldn’t have the comforts I have without that education. I didn’t pay for my heart bypass operation, somebody else paid for it. Sure, maybe I did it in my taxes…but I got the surgery, which cost $80,000 in the United States…whatever…it’s a good country. And the business community should be the first to understand that.
And many businesses in corporate terms understand that…for example, we belong to the Centre for Philanthropy. All the members give two percent of our pre-tax income to charity. But not enough businessmen do it personally.
Let me give you an example. The University of Manitoba is 125 years old. We endowed a chair in International Law about three years ago. That was the first fully endowed chair at the University of Manitoba. Now you think about the University of Western Ontario. You’ve got endowments like crazy because somehow your citizens were educated to understand they had an obligation. Part of it is because it was in London as opposed to Toronto, a small city where people were really proud of their university. I’m just trying to set an example. And I’m told that setting an example is working, that others are coming to the party. I don’t need the money. I live a very simple life and I don’t believe in creating inherited parasites. You want to look after your family, everyone has that obligation, but my greatest legacy will be the Asper Foundation. As I said, I’m just warming up on it because I’m finally getting the time to.
I also do it to set an example for my children and my grandchildren. Don’t just take up space…count, matter, do something. I’m not being pious or sanctimonious about it. I just think culturally, for me it’s automatic. That’s serving the Judean culture and I believe it’s a Christian culture— Judeo-Christian values, which I live by, well, to the extent I can. But as I say there’s nothing heroic or praiseworthy about it. It’s just being true to your code and being able to be satisfied that you’re not taking up space, that you do matter. I’ve felt this way all my life. And I’m confident my children will do the same thing.
I thank you for your time. You’ve been very gracious.