OTTAWA – It’s all in the CRTC’s hands now.
Following a review of BCE’s second $3.38 billion proposal to purchase Astral Media inside of 12 months, the Competition Bureau said late Monday it had reached an agreement with Bell “that preserves competition in the supply of English and French pay and specialty television programming services in Canada,” according to the Bureau’s press release.
Under the terms of the Consent Agreement filed with the Competition Tribunal Monday, Bell must divest itself of Astral Media’s ownership interests in Family Channel, Teletoon, Teletoon Retro, Disney XD, the Cartoon Network, Disney Jr. (English and French), Historia, Séries+, Télétoon, Télétoon Rétro, MusiquePlus and Musimax. Additionally, the Consent Agreement contains restrictions on Bell, including a prohibition on imposing restrictive bundling requirements on any other subscription TV provider seeking to carry pay services The Movie Network or Super Écran.
Bell then released its own news, saying it has agreed to sell the 50% interest Astral owns in Teletoon/Télétoon, English-language Teletoon Retro and Cartoon Network (Canada), and French-language Télétoon Rétro, Historia and Séries+ to Corus, which is already the owner of the other 50% of the cartoon stations. Corus will also acquire two Astral radio stations in Ottawa – CKQB-FM (The Bear 106.9) and CJOT-FM (Boom 99.7) – as part of Bell's radio divestitures required under the CRTC's radio ownership policies. That deal with Corus and Bell is worth $400 million.
Corus then said in a release of its own that it will also purchase the 50% interest of Historia and Series+ owned by corporate cousin Shaw Media so that it will own 100% of the two French language specialty channels. As well, Corus is also taking full ownership of ABC Spark, buying the 49% it didn’t own from Shaw Media, partially in exchange for its 20% interest in the Food Network, which is headed over to Shaw. In total, Corus is spending $494 million on the Bell and Shaw Media acquisitions.
The new Bell-Astral deal will see Bell retain TV brands SuperÉcran, CinéPop, Canal Vie, Canal D, VRAK TV, Z Télé, The Movie Network, HBO Canada, and TMN Encore, as well as 77 radio stations, and Astral's national out-of-home advertising business.
All of this (except the outdoor ad division) requires CRTC approval now. The Commission is set to make public Bell’s latest application to purchase Astral sometime this week (probably before chairman Jean-Pierre Blais’ Friday morning speech to the CMPA’s Prime Time conference).
"Consumers who pay for television programming are looking for greater choice, more innovative product offerings, and reasonable prices," said John Pecman, Interim Competition Bureau commissioner, in the release. "Today's agreement is essential to preserving choice for consumers and ensuring continued and effective competition in this area."
During its review, the Bureau said it collected and analyzed a large volume of information from Bell, Astral and many third parties. “In addition, multiple industry participants were interviewed, including: owners of television programming services; cable, satellite and wireless service providers; media buying agencies; and consumer groups,” reads the Bureau’s release. It determined that, without this Consent Agreement, Bell's acquisition of all of Astral's pay and specialty television channels “would likely have led to increased prices, less innovation and reduced choice for television programming.”
“The Bureau's review focussed on whether the proposed transaction would provide Bell with enhanced market power in negotiating the terms of its programming services with distributors,” added its release. “The Bureau determined that Bell's acquisition of Astral's pay and specialty television channels would have led to increased prices and reduced choice and innovation in the television distribution industry.”
Bell has also indicated that it will divest itself of a number of radio stations to comply with the CRTC’s Common Ownership Policy, something it also committed to in the first go-around, which was summarily rejected by the Regulator in October. An auction is now under way to sell Astral FM stations CHHR (Shore 104 FM) and CKZZ Virgin Radio, both in Vancouver; CFQX (Winnipeg, Country QX 104) and CHBM (Toronto, Classic Hits Boom 97.3) and Bell Media FM stations CKCE (Kool 101.5, Calgary); CHIQ (Oldies Fab 94.3 Winnipeg); and CFXJ (Flow 93.5 Toronto); as well as Astral AM station CISL (Vancouver, Oldies AM650). These are the same stations that were for sale the first time around.
Finally, Bell says it “heard the loud and clear desire of Montréal sports fans to retain TSN Radio 690 as an English-language sports station” (Bell had earlier proposed to convert the station to a French-language RDS sports station to meet CRTC rules) and has filed a separate application with the CRTC requesting an exception from application of the common ownership policy to allow the continued operation of TSN Radio 690 by Bell Media. That would give Bell four of six radio English language radio licenses in Montreal.
"This positive news from the Competition Bureau is a major step forward in uniting Astral and Bell Media and delivering on our promise to grow investment and competition in Canadian broadcasting," said George Cope, Bell’s president and CEO in the company’s press release. "This decision preserves the tremendous value the transaction represents to consumers, the Canadian media community, and Astral and Bell shareholders."
The company says that the chosen divestitures respond to the CRTC’s strongly stated public interest concerns, including TV viewership share, identified in its October 18 decision rejecting Bell's original application. Overall, the divestitures will result in Bell Media having a French-language viewing share of 23%, below competitor Québecor's 30.5% share. In English-language viewership, Bell Media will have a 35.7% share, 2% more than Bell Media's current share, states the company.
"The commitment to broadcasting investment and innovation by Astral and Bell Media, and Corus's further expansion into the Québec marketplace, underscores the growing competitiveness in the Canadian broadcasting industry," said Kevin Crull, president of Bell Media, in the release. "We now look forward to demonstrating the many benefits of the transaction to the CRTC and all Canadians."
– Greg O’Brien
