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Canwest roulette: Paul Godfrey bets $1.1 billion on newspapers, spins the wheel

This marks the end of the Canwest saga and the beginning of the Paul Godfrey saga. Godfrey, president and CEO of the National Post, has led a group of moneybags to buy the newspapers of the Canwest chain for $1.1 billion. Given that Shaw claimed the TV stations earlier, the core of the company—and the Asper family’s dream of a media monopoly—is now officially torn apart, although in surprisingly fewer pieces than predicted.

Reports the Globe and Mail:

Recruited several weeks ago to run the business, Mr. Godfrey, 71, will now be the man leading the newspapers out of bankruptcy court and, he hopes, into a new era of profitability. The group buying the newspapers includes dozens of financial players, such as U.S. fund manager Golden Tree Asset Management, who intend to make their money back by selling the company in an initial public offering this summer.

The deal keeps the newspaper company intact. When the publications emerge from creditor protection in July, none of them will be sold or closed, despite past financial troubles, Mr. Godfrey said. The chain of papers includes 13 large dailies, including the Post, the Montreal Gazette, the Ottawa Citizen and the Vancouver Sun, and 35 small community papers in Western Canada.

No closures? There must be some sweat-free brows in newsrooms across the country today. The plan, according to the Globe, is to get the papers level and take them public again (Canwest shares were delisted some time back) to make a profit. Basically, they’re flipping a house, but the house is made of newspapers.

The other serious offer was from Torstar, which would have created a super-monster newspaper chain in a deal that probably would have needed regulatory approval before it could have gone through. It would, however, have been fun to see the right-leaning columnists at the Post sign on to the Atkinson Principles. It remains to be seen whether Godfrey just overpaid for a bunch of newspapers that, like the entire industry, were having money problems even before the recession hit.

• Canwest approves $1.1 billion offer to acquire the businesses of Canwest Limited Partnership [Canwest] • With a salesman’s touch, Paul Godfrey claims CanWest [Globe and Mail]
• Canwest sells newspapers to creditor group for $1.1B [CBC]
• Wells: CanWest deal all about local papers [Toronto Star]