CGM bends slightly in CHUM bid

Three days of hearings concluded yesterday with a concession and a cash top-up by the media behemoth.

CTVglobemedia upped the value of its benefits package and pledged to turn out more local programming in Calgary, Edmonton and Winnipeg on Wednesday, as CRTC hearings into its proposed takeover of CHUM wrapped yesterday, with the feds again putting tough questions to execs from the Toronto media giant.

Answering criticisms heard from interveners throughout the three-day hearings, CGM boosted the would-be production payout to $123.9 million, up from $103.5 million, agreeing to include debt in its calculations of CHUM’s value.

‘We accede to your request,’ said CGM president/CEO Ivan Fecan, who added that $15 million of the top-up would go to television and $5.4 million to radio. CRTC regulations require so-called benefits packages whenever a broadcaster changes hands – generally equal to 10% of a deal’s price tag – to offset any ill effects of consolidation on producers.

The final day of hearings saw the CRTC commissioners return to the tough talk heard on Monday, such as when chairman Konrad von Finckenstein remarked that the buyout is ‘not a done deal’ and that the feds ‘could not jump over the twin-stick policy’ – referring to its rule that limits broadcasters to owning just one TV station per market. The proposed deal would see CGM control two stations in several markets, including Toronto, Winnipeg and Vancouver/Victoria.

Von Finckenstein also likened CGM’s determination to keep CHUM’s flagship Citytv stations – over the floundering A-Channels, which it is selling to Rogers – to a regulatory ‘tsunami’ that will be difficult for the feds to overlook.

Asked what CGM would do if the CRTC forced it to sell the Citys, Fecan told von Finckenstein it would not be in the best interests of the system to ‘tear the heart out of Citytv.’ But, answering complaints that it should pay more for such valuable stations, and hoping the CRTC will make an exception to the twin-stick rule, CGM agreed to pay a 15% benefit on some of the Citys, up from the usual 10%, in Edmonton, Calgary and Winnipeg. These benefits, separate from the $20-million boost, would translate into $6.5 million for local programming.

The offer does not apply to the Citys in Toronto or Vancouver/Victoria because, said Fecan, the CRTC has already broken the twin-stick rule in those markets for other broadcasters. CanWest Global, for instance, owns stations in Toronto and in nearby Hamilton. ‘It is our position that in the Toronto/Hamilton and Vancouver/Victoria markets, we are not asking for new exemptions, but we are stepping into the shoes of existing exemptions.’

CGM turned down a request by the Canadian Film & Television Producers Association to extend to specialty channels the offer Fecan made on Monday of 0% programming overlap on over-the-air channels. (See MiC story.) The CFTPA proposal ‘presupposes unlimited money,’ Fecan stated on Wednesday.

CRTC approval is the last step in the $1.4-billion buyout process. A decision is not expected for at least seven months.

This story first appeared in Playback Daily.