In the fall of 1999, Izzy Asper—Canwest’s founder, animating spirit and autocratic warlord—finally surrendered official command to his younger son, Leonard (while staying on as executive chairman). His 35-year-old heir hosted a private family dinner to celebrate the occasion. “What will this mean for me?” the freshly minted president and CEO asked, looking around the table, then answered his own question: “Nothing,” he said. “I will always get in the last words, ‘Yes. Dad. No. Dad. Right away, Dad.’ ”
Nearly a decade later, as the world has turned into an economic killing field, Leonard misses the affirming echo of his father, who had a million miles on his meter and seemed capable of handling any emergency. Izzy died in 2003 but his last deal, the purchase by Canwest Global Communications Corp. of Conrad Black’s newspaper chain, buried the Winnipeg-based company in a catacomb of debt—$4.1 billion—from which it never emerged. That debt, added to later financial obligations, has dragged the entire media empire to the very brink of insolvency. As Maclean’s went to press late Tuesday night, Canwest was still locked in negotiations with its lenders, searching for some way to restructure, without tearing the company apart.
It has been a tragic fall from grace triggered by a confluence of three factors: the unprecedented free fall in advertising revenues on which the Canwest properties depend, and the commensurate decline in value of its assets—once Canada’s largest media holdings—that eliminated the firm’s backup positions, such as the possible sale of its once-luminous Australian TV network. The third factor was Leonard Asper’s gentlemanly management style, which didn’t fit the drastic shift in circumstances.
In Izzy’s day, Canwest’s enemies were mainly uppity Palestinian militants, critics of Winnipeg culture, and the lowbrows who preferred elevator music to jazz. Now, the threats faced by the family which controls the working majority of Canwest’s stock are deadly and immediate. Leonard Asper has been trying to spin off non-core assets in a desperate attempt to stop the slide. It hasn’t worked. After posting a loss of $1.4 billion in the last quarter, the avalanche has now reached terminal velocity.
The company’s debt agreements were all subject to covenants; each missed obligation set off fiscally punishing consequences. As its business crumbled over the past year, Canwest found itself scrambling from missed deadline to missed deadline, desperate to keep its creditors at bay. It was not a case of vulture capitalists claiming their prey. No one was anxious to take over the firm’s struggling assets, since it was very clear that the greatest asset—Izzy’s uncanny ability to balance the untidy and overextended empire’s fiscal resources—was an irreplaceable element in the mix. Try as he might, Leonard didn’t have the killer instinct of his father, and when you are running a family company, it’s difficult, as one observer put it, to go against the wishes of a blood relative who carved the family turkey last Thanksgiving.
Looking back, it’s easy to pick the moment when Izzy Asper’s youngest child learned the lesson that eventually landed him in Izzy’s job. It happened one summer afternoon in 1968, when Leonard was only four years old. He sold lemonade to passersby in front of his Winnipeg home and boasted to his father that he had earned six dollars. Izzy, who loved his kids but raised them to follow a frontier business ethic, used the occasion to give the boy a lesson in how business really worked. “How much did it cost your mother to go to the store and what did she pay for the lemonade?” he asked. “What was the cost of the Dixie cups? What was the price of your cart and the tray you used as a cash register?”
The harsh realities of entrepreneurship must have sunk in because Leonard readily admits that as an executive he never signed a business deal without remembering the lemonade episode—though at the time, he recalls, “I’d lost six dollars and was a puddle of tears.” At eight, he was trying to memorize the headlines in the Globe and Mail so that he could keep up with supper conversations; four years later he was regularly perusing the Wall Street Journal and the Canadian Securities Handbook. “In our house nothing came for free,” he remembers. “Our parents didn’t give us money just because they had it. There was no reward unless you earned it. No handouts, but unconditional support.”
Leonard was the shyest of the family and sometimes forgot what he had rehearsed when it was his turn to speak out at the dinner table. But he was also the most studious. He attended Brandeis in Waltham, near Boston, the only non-sectarian Jewish college in the U.S., where he graduated with honours in political science. It was his first taste of independence, and it was there that he began to gain the self-confidence that drove him to aspire to the highest office in his father’s firm. Following graduation, he took a law degree at the University of Toronto and in 1997, when both his elder brother David and his sister Gail declined the honour—even before it had been offered—Leonard launched himself on the path to succeed the legendary Izzy.
