TORONTO - High-ranking executives at the newspaper operations of media giant Canwest Global Communications Corp. (TSX:CGS) could be included in pay cuts being suggested for unionized workers.
A spokesman for Canwest - which faces another deadline with creditors at midnight Monday night - confirmed that the proposal to slash wages by up to five per cent would involve everyone at the newspaper division.
"In order to get to that $20 million it would require (cuts) right across the board, so that would be executives, all management and union" workers, said Canwest's John Douglas in an interview.
But he said the wage cuts, which were proposed to union members in a letter, aren't set in stone, and they haven't been officially pitched to union leaders in person.
Douglas characterizes them as nothing more than an example used to illustrate the dire situation that Canwest is experiencing as it tries to dig itself out of about $4 billion in debt.
He wouldn't say whether Leonard Asper, who is president and chief executive of the entire Canwest operation, would also take a pay cut.
"You're way ahead of yourself on this thing," he said in response to questions over who would be included in any pay cuts.
"This letter is an invitation for discussions. We have not told anybody that we are seeking a five per cent wage cut rollback."
Still, the suggestion was enough for union leaders to worry about the potential implications of the letter, which was signed by Dennis Skulsky, president and CEO of Canwest's newspaper operations.
So far, both sides haven't started talking with each other, though the company hopes to met with local senior labour representatives sometime this week, according to the letter.
"Our locals will be prepared to go to those first meetings to find out what they really want to talk about, and how they want to talk about it," said CWA/SCA Canada director Arnold Amber.
"But we're definitely going to have to discuss what their (financial) stability is."
Canwest owns the National Post, based in Toronto, as well as a string of big-city dailies from Vancouver to Montreal.
Also, Monday marks the latest deadline for the struggling broadcaster and newspaper company.
The company has until midnight to reach an agreement in principle on a long-term recapitalization with a noteholder committee that represents certain key creditors. A definitive agreement is to be reached on or before July 15.
In Australia, Canwest's Ten Network downplayed recent speculation that the Canadian company could sell off its 56 per cent stake in the Aussie television and advertising operations.
"The new financing arrangements between Canwest and some of its lenders in fact restrict Canwest in its ability to deal with its interests in Ten, without the consent of its lenders," said Ten in a statement.
The Ten holdings are the last remaining major asset of Canwest's foray into international operations. Most recently, it sold its four Turkish radio stations, a deal made at an undisclosed price that was announced in May.
Canwest received about $175 million in fresh financing from U.S. buyout funds and other investors, but it is believed the company will have to appoint new management in any restructuring.
The company ran up a huge debt load when it bought the former Southam newspaper chain and other assets in 2000 for $3.2 billion from Conrad Black's Hollinger group, and took on additional debt from buying the specialty channels of Alliance-Atlantis Communications more than two years ago.