Chum takeover OK’d with condition

B'caster will have to sell five City-tv stations

Canuck regulator the Canadian Radio-Television and Telecommunications Commission (CRTC) has approved theC$1.4 billion ($1.3 billion) deal for CTVglobemedia to take over rival broadcaster Chum, but with a humongous caveat. The broadcast regulator saidCTV will have to sell off Chum’s five City-tv stations, the jewel in the Chum crown and the primary reason CTV made the deal in the first place.

The five City-tv stations are located in Toronto, Vancouver, Winnipeg, Edmonton, and Calgary. Friday’s decision essentially ensures that there will still be three main TV networks in Canada, all owned by independent companies. The other main network is run by CanWest Global. The most likely buyers for the City-tv outlets are Rogers Media, Quebecor or Astral Media.

Decision appeared to take execs at CTVglobemedia by surprise. In a statement they said, “CTVglobemedia is carefully reviewing today’s CRTC decision and will be assessing its options moving forward.”

But the CRTC ruling allows CTVglobemedia to hang on to Chum’s A-Channel stations, seven outlets located in smaller markets.However, it will likely scuttle April’s deal wherein Rogers Media, one of Canada’s largest cable operators, acquired the A-Channel stations plus three specialty channels from Chum for $129 million. The deal with Rogers included a clause saying the sale was predicated on CTVglobemedia’s takeover of Chum going ahead without any major conditions being imposed by the CRTC.

“The purpose of this policy is to maintain diversity of voices within the Canadian broadcasting system,” said CRTC head honcho Konrad von Finckenstein. “Some exceptions to the policy were granted in the past for failing stations in secondary markets. CTVglobemedia asked for the exception using arguments based upon competitive equality and the impact of new media. However the commission was not convinced by CTVglobemedia’s arguments.”

The approval of the CTVglobemedia takeover of Chum is conditional on the trustee responsible for the City-tv stations coming up within a plan in the next 30 days for the sale of the City-tv stations.

Actors union ACTRA (Alliance of Canadian Cinema, Television and Radio Artists), which rarely has anything nice to say about the CRTC, applauded the commission for its decision. During the recent CRTC hearings about the deal, ACTRA had asked that CTVglobemedia not be allowed to dominate in the major markets.

“Keeping more broadcasters in the system means more windows for Canadian shows,” said ACTRA national president Richard Hardacre. “So this is somewhat positive. However is it enough to indicate that the CRTC is moving in the right direction to save Canadian drama? Has the CTVglobemedia/Chum decision shown that the CRTC is listening to the persistent argument of Canadian actors, writers, directors and producers?”

With the CRTC conditions in place, the CTVglobemedia deal will allow the company to pick-up from Chum seven television stations, 34 radio stations and whole or part ownership of 20 specialty TV channels, including Bravo!, MuchMusic, Space, Star!TV, Fashion Television and TV Land.

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