Where's Leonard Asper These Days?

[jon]

The Kid Stays in the Picture
by Joe Castaldo
Canadian Business magazine
July 2014
Watching his family's Canwest empire collapse taught Leonard Asper a few useful lessons. With Anthem Media Group, he's bent on building a broadcast business of his own. Why it will look nothing like his last one

Leonard Asper turns the corner to head for his office when he sees a short, tautly muscled man at the other end of the hallway. The guy's ears, bloated and cauliflowered, suggest he's someone who's spent some time brawling. In fact, he's a professional mixed martial artist, here to film an interview for The Fight Network, a cable channel dedicated to combat sports that Asper operates. The CEO has a question for him.

"I hear you're into fishing," he tells the fighter, a welterweight named Josh Koscheck. "Have you been up north, to Ketchikan in Alaska?" Asper asks. "It's crazy. Like, you'll hook a salmon and a whale will take it right from your line." Though Asper turned 50 this year, his tousled hair and easy grin lend him a boyish appearance. So does the long-sleeved shirt, loose-fitting jeans and sneakers he's wearing. After a few minutes, Asper gets to the pitch: his company, Anthem Media Group, has a stake in a hunting and fishing channel. How would Koscheck feel about doing a show? Koscheck knows he can't fight forever ("it's the training that's brutal") and jumps at the idea. Asper keeps talking. "'Cause I'd love to get you in a boat and have a different fighter with you each time." They part ways with a promise to be in touch.

"I couldn't pass up that opportunity," Asper explains to me as we head back to his office. It was the kind of exchange he loves, where ideas are hashed out and acted upon swiftly. It's how he likes to operate at Anthem, a small but growing team of 45 employees, working out of an old brick building in Toronto's Liberty Village. It's a far cry from his days as head of Canwest Global Communications, a faltering giant where necessity more often mandated cutting back than building out. Asper has a connection to guys like Koscheck. He's been pummelled and trounced in the past, too. But his battle scars are easier to hide.

In the mid-2000s, Asper was the most powerful media executive in the country as CEO of Canwest, the conglomerate his father, Izzy Asper, founded in Winnipeg in the 1970s. That was before the 2008 financial crisis set off a terrible chain of events: creditor protection, boardroom fights and a court challenge that saw the Aspers lose control of the company. After an ordeal like that, it's easy to envision Asper as a defeated man, an impression he's eager to counter. "Enough with the maudlin Len Asper stories," he writes to me in a later e-mail.

There are other things he'd rather talk about, such as what's playing on the television mounted on his office wall: the Fantasy Sports Network (FNTSY), which is the latest channel from Anthem. "I'm really happy with the product," he says, "even though right now we've got a podcast on." The program, Dear Mr. Fantasy, a talk-radio-style show for fantasy baseball fans with a dedicated online following, shows only an undulating sound wave onscreen.

Fantasy sports may sound bizarre to the uninitiated, but businesses are beginning to realize all the time people spend on their hockey and baseball pools is a big market opportunity, as much as US$3.5 billion a year. The goal with the network, the only 24-hour station dedicated to the subject, is to create the CNBC of fantasy sports. Asper envisions fantasy league players trading athletes based on what they learn from the channel in the same way investors trade stocks while watching cable news. "This thing, I hope, will be on in trading rooms around the country. It will be in doctors' offices and in beer stores," he says. The channel, which launched in March, is just part of Asper's ultimate plan to put together a suite of niche television, online and mobile channels targeting male viewers. Advertisers have a hard time reaching men, and by creating a dedicated venue for testosterone-infused programming, he plans to serve up this demographic on a silver platter.

For Asper, the new venture also represents a chance to build a business of his own. His dad laid the groundwork for Canwest, and the business was mature when Asper took it over. At Canwest, the corporate environment made it difficult to truly flex entrepreneurial muscle. He can do that every day now. Should Anthem succeed, he might just lay waste to that "maudlin Len Asper" image, too.

Asper doesn't like to dwell on Canwest. He says he never thinks about it and seems to have no tolerance for self-pity. ("It was a bummer. Move on," he says.) But it's easier to understand where Asper is today, when you understand where he's been.

His father appointed him CEO of Canwest in 1999 when Leonard was just 35 years old. (Izzy died in 2003.) At its height, the company owned more than 40 newspapers and 36 television channels across the country, including the National Post and Global Television, as well as radio and TV assets in Australia and Turkey. But Canwest carried a lot of debt, and when credit markets froze in 2008, it faced a cash crunch. Hedge funds purchased the company's debt in a creeping ploy for control. And while Asper struggled to get more breathing room from lenders, the company ultimately filed for creditor protection in 2009. Shaw Communications later made a bid for the television assets, which Asper opposed. He tried to put together his own offer which would see the Aspers continue to play a role in the broadcast division. That pitted him against his fellow board directors and led to his resignation from Canwest. He lost the television arm to Shaw in court. JR Shaw, a peer of Izzy's, refused to let Asper keep the Canwest name, even though Shaw had no plans to use it.

When the tumult ended in early 2010, Asper retreated to his cottage at Lake of the Woods. Within weeks, he grew anxious to get back to work. He considered real estate and natural resources, but decided he knew the media business best. It provided a chance to test a theory, too. In his final days at Canwest, Asper had watched advertising revenue plummet in almost every division, with the exception of the Food Network and HGTV. Both channels had dedicated, well-defined audiences, and advertisers knew exactly who they were reaching, even boosting spending during the worst of the financial crisis. "That's the model," says Asper. "You need targeted destinations for communities that are passionate about the subject."

Research showed that women made the majority of household purchasing decisions, which was why U.S. companies like Scripps Networks Interactive, which owns a handful of channels geared to women, including the original Food Network and HGTV, were performing strongly. "But I was hearing from advertisers going after men that it's very hard to reach them on television and even on online video," Asper says. He hatched a plan to apply the Scripps model to men -- or at least to a certain prosaic, bro-ish kind of man. He ran the idea past contacts in the media and ad industries, and became convinced the concept was viable. He just needed the right launching pad.

Through a mutual contact, he was put in touch with Loudon Owen, a Toronto venture capitalist and an investor in the Fight Network. The channel, founded in 2005 to broadcast boxing matches and other combat sports, had been through various restructurings and by 2010 was adrift. The situation had improved with the addition of a general manager from The Score, but Owen felt it needed an experienced executive at the top. "I actually remember saying to Len, 'If anybody should be running the Fight Network, it's you. You are the fighter,'" he recalls. The Fight Network fit Asper's ideal of a niche product with a heavy male audience that had potential on platforms beyond television. He bought a large stake (later increased to 51%) and signed on as CEO in December 2010, nine months after leaving Canwest. The network was restructured under Anthem Media Group, of which Asper owns 68%. He brought a sense of direction to the network and expanded it by purchasing a chunk of the Pursuit Channel, a hunting and fishing outlet he plans to bring to Canada. Anthem also bought the rights to a library of extreme sports programming, including shows about kiteboarding and skateboarding, and will launch a new channel called Edge Sport by next year.

The fantasy sports endeavour is the first to be hatched internally. Asper had asked staff to table their biggest ideas. Chad Midgley, the company's vice-president of programming and production, pitched fantasy sports. "Len's initial reaction was, 'What is fantasy sports, and why the hell would anybody care about this?'" Midgley says.

Fantasy sports work like this: Anyone can join a pool for a particular sport and draft a fantasy team consisting of real-world players, just as a fund manager might pick a basket of stocks. The success of this imaginary team is based on the actual performance of those athletes. NFL football is the most popular fantasy sport, but there are leagues devoted to almost everything, including cricket and NASCAR. Fans always assume they can do a better job than league owners; fantasy sports allows them to prove it.

Midgley first thought about a channel like this years ago, and developed it further with the Fight Network's general manager before taking it to Asper, who made his own inquiries. Advertisers were excited. Research from the Fantasy Sports Trade Association shows why. More than 35 million North Americans play some form of fantasy sports. Almost all of them (80%) are men with money to spend, and they devote more than eight hours per week to it. "These guys need info all day long," Asper says. "So we said, 'Let's stop the other stuff we're doing, and let's do this.'"

There's already an entire universe of fantasy sports content online, and to establish a foothold, Asper talked with the owners of RotoExperts.com, a popular fantasy sports website based in New York. Louis Maione, who founded the site while working on Wall Street, had been thinking about expanding into video. "I hear about this guy Len Asper, and I start reading about him," Maione says. "This is a real TV guy. He's going to be competition." Asper had only intended to discuss content sharing, but Anthem ended up buying RotoExperts and hiring Maione.

FNTSY debuted with roughly five hours of original programming per day. That included a one-hour news show filmed in Toronto with anchor Laura Diakun and another focused on prop betting (oddball wagers like the first player to score in a game) hosted by a gruff jock named Gabriel Morency, who seems incapable of speaking without shouting. Like most sports programs, the shows feature people yakking around tables. But fantasy players are more concerned about the individual performances of athletes, so both broadcasts dive deep into players' abilities, shortcomings and injury reports.

The material is useful for hard-core fantasy players, but it's not the most visually compelling stuff. "We need our Jim Cramer," Asper says. Celebrity tie-ins are another option. "Jay Z runs a big musician's league, and Geddy Lee is a huge fantasy baseball player. I think we can bring in a lot of celebrities." Reality fantasy content (despite the oxymoron) holds promise, and Asper envisions following high-stakes players who participate in pools with entry fees in the thousands of dollars. There are even fantasy leagues for TV shows like The Bachelor. "You could fantasy-ize a lot of subjects ," he says.

FNTSY is getting a boost from Bloomberg Sports. In May, Anthem announced a partnership with the financial information giant, which started its own sports analytics division in 2010. Beginning in June, Bloomberg will produce a program from its studio in New York City that will air exclusively on FNTSY. The show will use Bloomberg's proprietary data tools to analyze athletes and predict how they'll perform, just as Bloomberg's financial data helps investors decide which securities to buy. As part of the agreement, users of Bloomberg terminals (there are more than 315,000 in financial institutions around the world) can punch in "FNTSY" to access the network's content.

So far, the network is only available to MTS cable subscribers in Manitoba (which amounts to around 100,000 households) and free to stream online everywhere else. Viewer feedback has been encouraging, and Asper says "several thousand" people have signed up online. Other indicators show adoption has been slow. Fewer than 2,000 people follow the network's Twitter account, and its YouTube channel has only 161 subscribers. That said, it's still early, and the network has yet to begin marketing itself.

Asper is working to secure more distribution agreements, and FNTSY will be available to eight million Roku users in the U.S. this month. But it's unclear whether cable companies really need any more help reaching this underserved demographic. "Other, bigger options in the market can effectively deliver what advertisers want in terms of reaching the sports fan," says Michael Neale, chief investment officer at media buying agency MediaCom. Live sports will still be the biggest draw for advertisers and command the highest prices. "I believe fantasy sports would offer high duplication with little incremental reach," Neale says.

The network ran spots from Toyota and Budweiser at launch, but other advertisers have held off until Asper secures more distribution agreements. He maintains the sports fan's desire for content is "virtually insatiable," and the goal with any Anthem channel is not to muscle out behemoths like TSN. "It's based on getting 10% of any market, not 80%," he says. The company can pull that off because it's a low-cost operation. Even the lobby couch at Anthem's headquarters doubles as on-set furniture for guests.

There are few people in business who have gone through what Asper has: running a huge corporation, watching it crumble, and then starting something new. He no doubt learned some lessons he can use today, provided he had reflected on the past. "I never, never look back," Asper said in one interview. But how could he not?

"It burns him inside," says friend and business partner David Lubotta. "I'm sure he thinks about it every day of his life." When I ask Asper about his Canwest experience, it's clear he has some spent at least some time thinking about it. Running a company with no debt feels liberating, he says. He's not afraid of debt, but he would approach it more conservatively. If he were heading up a large company again, he says he would limit every division to a maximum of 120 people so decisions could be made quickly and bureaucracy reduced. Asper also believes he would recognize the signs of trouble in the financial markets and within his own company sooner to prevent outside interference -- especially from hedge funds. "Hedge funds are terrorists. In a good way," he says. "They make a lot of money for their investors by terrorizing other companies." The ordeal showed him the unsavoury aspects of human nature, too. There is a select group of people at Canwest that he believes could have altered the company's fate for the better had they supported him and acted differently. "I thought they would be allies to the end, and they were not. Those people I have some contempt for, and I will have a long memory about that," he says. Asper understands why these people, whom he won't name, turned against him when he was losing control of the company: People only defer to leaders when they're in charge. "The second there's some slippage in that perception…you have to assume everybody will run for the hills. Everybody will look after their own self-interests, and they will screw you," he says. "It's like [how] very few people in Nazi Germany were willing to step up when the Nazis came."

Asper says all of this placidly, sipping tea from Tim Hortons, as we sit in his office. A "Keep Calm and Carry On" poster hangs on the wall behind him. These days, Asper surrounds himself with reminders to maintain a balanced outlook on life. The company that he and Lubotta use to invest in startups, Sygnus Ventures, is named for a song series by Rush known as Cygnus X-1. (Someone had already registered "Cygnus," so Asper changed the spelling.) "In these two songs, Cygnus becomes the mythical god of balance that tries to settle the battle of the two hemispheres of the brain," he says. "Balance is to have reason and objectivism in your life, but also passion, love and play." Perhaps realizing how self-serious he sounds, he adds, "You asked, man!" (Asper's boat, incidentally, is also named Cygnus -- but spelled the way Neil Peart had intended.)

His approach to business today is serving him well at Anthem. In May, Asper secured a distribution deal with a large U.S. cable company for both FNTSY and the Fight Network, the details of which were unavailable at press time, and an agreement with Sask-Tel, which means access to another 50,000 households in Canada. That puts the company ahead of schedule, Asper says.

With every step forward at Anthem, it seems less appropriate to cast Asper as a maudlin figure. And yet there is a sentimental side to him, and a more personal milestone he's reaching for beyond bottom-line numbers. In December 2009, Asper visited his father's burial site in Winnipeg and left a loonie at the grave. He vowed to reclaim it only when certain goals were accomplished. He's keeping the specifics private. "It could be defined in different ways, but it's just a successful run," Asper says. "I've got it very firmly in my mind."