CRTC TO NIX CHUM SALE 'Twin sticks' ruling due today Sun Media and Canadian Press The federal broadcast regulator will hand down its verdict on CTVglobemedia's $1.4-billion purchase of CHUM Ltd. today amid expectations that Canada's largest private TV network will be forced to sell some or all of CHUM's five Citytv stations, a key element of the deal.
Sources told CP that the Canadian Radio-television and Telecommunications Commission will make the selloff of at least some of the stations -- including the flagship Toronto station -- a condition for approving the takeover of CHUM. The Toronto broadcaster has an extensive network of radio and television stations, including six A-Channels and 21 specialty channels.
"CTVglobemedia isn't going to like this decision," one source said, on condition of anonymity.
A television industry web newsletter, cartt.ca, also reported yesterday the CRTC will today deny CTV's request to purchase the Citytv stations.
"According to sources, the rumour of the decision coming quickly and negatively has been bouncing through the industry for a couple of weeks and is well known through CTV and CHUM already," Greg O'Brien reported on the website.
Sun Media sources at CTV yesterday confirmed the cartt.ca report.
A spokesman for the network told CP she had not seen the decision and had no comment. The CRTC also would not comment other than saying the decision would be released late this morning.
In what was believed to be an effort to make the CHUM purchase more palatable to the commission, CTVglobemedia agreed in April to sell the A-Channel network and several other stations to Rogers Communications Inc. for $137.5 million.
The deal, however, was contingent on CRTC's approval of the CHUM takeover.
But the CRTC is expected to rule that CTV's ownership of the Citytv stations in Toronto, Vancouver, Edmonton, Calgary and Winnipeg would violate the regulator's "twin sticks" policy that prohibits two or more conventional stations from being owned by one network in any single market.
During public hearings in April, one CRTC commissioner pointedly asked CTVglobemedia boss Ivan Fecan why he had not sold off the Citytv network and kept the A-Channels, most of which are not in cities with an existing CTV station.
Fecan had argued that the Citytv stations were "teetering at the financial edge" and needed CTVglobemedia's deep pockets to have the resources to return to their original mission of providing provocative, innovative and edgy programming to a younger audience.
He reminded the commissioners that the CRTC had allowed CanWest Global Communications Corp. to violate the twin sticks policy in several markets when the regulator was shown that such purchases rescued stations that otherwise would have gone bankrupt.
Despite his arguments, most CRTC commissioners appeared skeptical, challenging Fecan on whether the Citytv stations really were close to financial ruin.
"Then along you come and ask us to give an exemption in five cities," commission chairman Konrad von Finckenstein responded during the hearings. "How do we justify that and still retain any validity as a regulator who is applying its policies?"
Sensing the application was in trouble, Fecan had told the commission he might be willing to spin off some of the Citytv stations in Winnipeg, Edmonton and Calgary, but the commissioners said it was too late to make such an amendment to the broadcaster's application.
ASSETS
CTVglobemedia's CTV division operates 21 conventional television stations across Canada and has interests in 15 specialty channels.
Other CTVglobemedia investments include the Globe and Mail newspaper and an interest in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs, Toronto Raptors and the Air Canada Centre. The company also has a stake in Dome Productions, a mobile high-definition TV production company. |