The Godzilla of all Canadian media conglomerates is born with the official confirmation at 4 p.m. today that CHUM Ltd. is indeed being taken over by Bell Globemedia, which already owns CTV with its 17 specialty channel interests and The Globe and Mail and its stable of Globe and Report on Business branded print, digital, and broadcast properties. Cutting to the chase, initial reaction from media agencies is that the news is not great for marketers.
Media concentration of this calibre does not strike Steve Aronovitch, broadcast investment manager at Toronto’s Starcom Mediavest agency, as potentially positive for marketers. ‘Generally speaking, we like to see more players rather than less in the broadcast world because that gives us the most leverage on pricing and other aspects [of media buying].’
BGM’s cash outlay to acquire CHUM stock will reach a final tally around $1.4 billion, and the deal establishes a $1.7 billion enterprise value for the company. CHUM, a publically traded company with about 90% of its stock held by the Waters family, has agreed to support BellGlobemedia’s acquisition of its stock if certain conditions are met. BGM’s main stakeholder is BCE Inc. with 68.5% of the conglomerate while the remainder is owned by The Woodbridge Co. Ltd., the Thomson family holding company. Other major investors include the Ontario Teachers Pension Plan and TorStar Corporation, which now holds 20% of BGM stock. Both will acquire more by the end of this year.
The timeline for closing of the deal is dependent on regulatory approval.
In the release announcing the betrothal, Ivan Fecan, BGM president/CEO of CTV, stated: ‘The Waters family has built a remarkable organization and our intention is to continue their legacy. With regulatory approval, we intend to serve Canadian audiences with both CTV and Citytv stations. We will maintain separate and independent news divisions in order to ensure a continued diversity and competition in news coverage. The specialty television channels of the two companies are complementary and we are excited by the prospects of adding CHUM’s strong radio stations to our services.’
BellGlobemedia plans to keep all of CHUM’s radio, City, and specialty stations but, because of duplication in some markets, A-Channel and Access Alberta stations will end up on the block in order to gain CRTC approval for the deal.
CTV is already Canada’s leading private broadcaster, currently controlling the ratings war with the majority of top 20 programming. It operates 21 conventional stations across the country in addition to its 17 specialty channels, while CHUM owns 12 local TV stations and 21 specialties, both analogue and digital, as well as 33 radio stations. Most of these assets also have interactive iterations as well, with some of the CHUM digital assets among the most pioneering in Canada when it comes to adopting new tech such as wireless and enhanced television.
Speculation abounds on what will transpire in the areas of franchise duplication, such as music (CTV’s recent investment in the MTV relaunch and CHUM’s market-dominating Much).
CTV television properties include 21 conventional CTV stations (and three indie affliliates), 40% of TQS, and the ASN satellite-to-cable service.
Conventional stations:
Halifax, Moncton, Sydney, N.S., and Saint John, N.B. in the east; Montreal, Que.; Ottawa, Toronto, Kitchener/London, Sudbury, Timmins, North Bay, and Sault Ste. Marie in Ontario; and in the west, Winnipeg, Saskatoon, Regina, Prince Albert and Yorkton in Saskatchewan, Calgary, Lethbridge, and Edmonton in Alberta, and Vancouver.
Specialty channels include:
Analogue – TSN (70.08%), MTV, CTV Newsnet, The Comedy Network, Report on Business Television, Réseau des sports (70.08%), Discovery Channel (56.06%) and OLN (33.33%). CTV also has interests in ARTV and Viewer’s Choice Canada.
Digital – Animal Planet (37.84%), Discovery Civilization (46.95%), Discovery HD Theatre (56.06%), ESPN Classic (70.08%), NHL Network (15.01%), CTV Travel and RIS Info Sports (70.8%).
CHUM television properties
Conventional stations:
Citytv Toronto, Citytv Vancouver, Citytv Calgary, Citytv Edmonton, Citytv Winnipeg, A-Channel Barrie/Toronto, A-Channel Ottawa, A-Channel London, A-Channel Windsor, A-Channel Wingham, A-Channel Victoria/Vancouver BC and CKX Television (Brandon MN).
Specialty channels:
Analog – MuchMusic, MuchMoreMusic, MusiquePlus (50%), MusiMax (50%), Bravo!, ACCESS, CLT, CablePulse24, SPACE: The Imagination Station and Star!.
Specialty channels – BookTelevision, CourtTV Canada, Drive-In Classics, FashionTelevisionChannel, MuchLOUD, and MuchMoreRetro.
Sources inside CHUM say staffers are anticipating cuts will occur in the areas of ad and program sales, marketing, regulatory, HR, and in the senior exec ranks.
