CRTC to CTVgm: yes and no
The commission's decision to greenlight the sale of most of CHUM's assets to CTVglobemedia - but not its five City stations - means that 'The buyers can exhale now,' says Starcom's Lauren Richards.
Just before noon today, the Canadian Radio-television and Telecommunications Commission approved the transfer of what it termed ‘effective control’ of CHUM to CTVglobemedia – but only if CTVgm submits a plan within the next 30 days for selling the five Citytv stations in Toronto, Winnipeg, Edmonton, Calgary and Vancouver CGM included in the $1.7-billion deal.
The bombshell decision signifies the CRTC’s determination to stick with its broadcast ownership rules, which stipulate that no licensee can operate more than one conventional TV station in one language in a given market. That policy, says commission chairman Konrad von Finckenstein, is based on ‘maintaining diversity of voices within the Canadian broadcasting system.’ He noted that, while exceptions have been granted in the past ‘for failing stations in secondary markets,’ the CRTC was ‘not convinced by CTVgm’s arguments’ that it be afforded the same privilege.
MiC took a quick straw poll in the media community as soon as the CRTC announcement arrived. ‘The buyers can exhale now,’ says Lauren Richards CEO, Starcom MediaVest Group. ‘That’s not to say that CTV isn’t a great partner and we wish them all the best. They’ve done some wonderful things for the buying community. But to have a healthy environment, we need more competition, not less.
‘Anyway,’ Richards continues, ‘I don’t think we should look at this as what CTVgm doesn’t have now, but what they do have, which is staggeringly huge with all the assets they’re acquiring with specialty and radio. The CRTC has given them lots to work with.’
Lynda Cooke, managing director of PHD Canada, says she too is relieved that the CRTC chose not to deepen media consolidation this time around. ‘Our perspective is, the more competition the better. It allows us to keep rates down. We’re still a little worried about whether CTV is going to start forcing packaging and raising rates in general. But for now, with all our CHUM deals already done, it should be status quo, at least for the fall.’
The Association of Canadian Advertisers quickly weighed in on today’s announcement, saying it is ‘very pleased (because) the decision will ensure a continued competitive marketplace for advertisers in these key markets.’ Echoing its spring interventions with both the CRTC and the Competition Bureau, the ACA said ‘the addition of these Citytv stations to the CTV stable was a cause for serious concern for advertisers, since it would have given undue competitive advantage to the same owner of two local stations. This would have significantly diminished advertisers’ ability to leverage purchases of TV time, resulting in excessive market cost increases for commercials in five key TV markets.’
Speculation is now raging about which media biggie may decide to chase the plum City properties. Quebecor and Rogers seem likely to try their luck. But Richards has another candidate in mind. If she had her druthers, it would be Corus Entertainment. ‘I would like to go on record as saying that, in the industry, one of the partners we really respect is Corus,’ she tells MiC. ‘They are very good partners in working through opportunities with us, and I’d love to see them get bigger.’