TORONTO — Canada’s broadcast regulator has approved CTV’s takeover of NetStar Communications, with some strings attached.
Although the Canadian Radio-Television and Telecommunication Commission approved the deal, the Canuck broadcast regulator has two concerns with CTV’s ownership of a 68% stake in NetStar Communications and has put two conditions on its approval.
The CRTC found that control of specialty powerhouse NetStar would give CTV too much control in sports broadcasting in Canada. NetStar owns the Sports Network (TSN) and le Reseau des Sports (RDS), and CTV holds a 40% interest in SportsNet and 33% of the Outdoor Life Channel. To even the playing field, the CRTC has therefore required that CTV divest itself of its interest in SportsNet within one year.
The CRTC was also concerned about the pull that NetStar minority shareholder ESPN will have if the deal goes through as written. As one proviso for winning control of NetStar, CTV agreed that after three years ESPN will be able to rebrand TSN.
It is believed that ESPN plans to change TSN’s name to ESPN Canada.
“That would be excessive influence from a foreign minority shareholder,” CRTC spokesman Denis Carmel said. CTV has been required, as a result, to amend the shareholder and trademark license agreements among CTV, NetStar and ESPN accordingly.
CTV, NetStar and ESPN reported that they are reviewing the decision.