OTTAWA-GATINEAU – The CRTC will issue its decision on the purchase of CHUM Ltd. by CTVglobemedia tomorrow morning, Cartt.ca has learned.
It’s a stunningly quick decision, given the size of the deal and the fact the hearing concluded just five weeks ago, but according to sources, none of whom wish to be identified, it was an easy decision because the Commission will deny the biggest part of the acquisition: CTV’s request to purchase CHUM’s Citytv stations.
The CRTC has had a long-standing policy against Canadian broadcasters owning a twin-stick operation – or two commercial over-the-air stations of the same language – in single markets for fear too much market power and if the deal were to go ahead, CTV would have two outlets in each of Toronto, Winnipeg, Calgary, Edmonton and Vancouver.
Some say CanWest Global has a twin-stick in Toronto, for example, and CTV claimed that was a precedent setter, but Global Television is a Toronto station and CH is technically a Hamilton station.
While CTV promised to keep Citytv Toronto and CTV Toronto completely separate, company executives faced tough questioning from the Commissioners during a hearing at the end of April on that portion of the deal (CRTC chair Konrad von Finckenstein wondered aloud of a "national predator"). So tough was the questioning, that CTV apparently saw some writing on the wall right away and offered a larger benefits package on the last day of the hearings, then days later offering to divest the City stations in Winnipeg, Calgary and Edmonton.
The CRTC rejected considering the divestiture offer as it came after the hearing had closed.
According to sources, the rumor 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. The Commission is expected to approve CTV’s ownership of the CHUM radio group, however. It’s not known what the CRTC will say about some of the other specialty assets involved in the sale.
"He wanted this decision out, to prove he was a new, efficient chairman," said one well-placed source who asked not to be named about von Finckenstein. It sure will be a topic of conversation at next week’s Banff World Television Festival.
Tomorrow’s decision will apparently also offer a tight timeline of 30 days or so to find a new purchaser for CHUM, or pieces of CHUM, or for CTV to come back with an altered deal.
The speculation now is that CTV won’t walk away but will try again with the Commission in a new, altered deal, possibly involving Rogers Communications, the company which agreed to take CHUM’s A-Channels off of CTV’s hands. "You don’t come this far and walk away," said a source.
Plus, added another, "Rogers’ agreement to buy the A Channels is contingent on the approval of the entire deal." So if the CRTC does what is supposed to happen tomorrow, it could be a player to purchase CHUM’s Citytv’s because the Citytv channels are a much more attractive asset, of course, than the smaller market A-Channels.
The twin stick policy wouldn’t apply to Rogers’ and its OMNI stations because they are ethnic licenses.
However, noted one of our sources, given Rogers’ and CTV’s recent co-operation in the past on the World Cup of Soccer, the Olympics and the NFL, it’s not beyond possibility that Rogers could end up owning and controlling the Citytv stations "and letting CTV program them."
And, in that scenario, CTV would assume control of the A-Channels.
Stay tuned on this one.
