MONTREAL – As predicted, Quebecor CEO Pierre Karl Péladeau hates the proposed purchase of the V network and Noovo.ca by Bell Media.
The acquisition of the network and its digital assets by Bell “will further undermine an already precarious ecosystem by allowing a dominant player to become still more so,” reads a Quebecor press release sent out about 24 hours after Bell’s announcement Wednesday.
“The transaction will significantly alter the balance of power between media companies and have major consequences,” adds the statement.
The company worres that Bell, with its power in “conventional television, specialty channel, pay TV, radio, distribution, Internet, mobile, digital media and out-of-home businesses across Canada, its control over pro sport teams, and more than a billion dollars in annual television advertising revenues,” will crush any and all competition. With a company as large and monied as Bell behind V, instead of independent ownership relying solely on the diminishing returns of the network, major consequences would certainly be on the horizon for Quebecor’s TVA in its home market of Quebec.
However, as media commentator and Cartt.ca contributor Steve Faguy pointed out in his blog, Quebecor is the biggest of the big dogs in the province by far, with 37% of the TV market, followed by Bell with its specialty channels at 17%. Even adding V’s 7% market share doesn’t get it near TVA, or to the 35% market threshold the CRTC considers to be problematic market power.
“Bell, the largest vertically integrated provider of telecommunications and broadcasting services in Canada, already holds a dominant position in both the French and English specialty channel markets and the radio market across Canada. It will now be able to dramatically increase its power and dominance in the French-language market in terms of competitive posture, advertising revenues and content offerings, ultimately at the expense of the consumer,” insists the Quebecor statement.
“The impact on the competitive landscape and the implications of across-the-board media concentration in the hands of Bell, in both the English- and French-language markets, must also be considered.”
Quebecor’s statement also pointed out the Competition Bureau last year blocked Bell’s attempted acquisition of specialty channels Séries+ and Historia from Corus for competitive reasons. “Applying the same reasoning, the acquisition of a conventional network and its digital assets by a giant such as Bell should raise even graver concerns,” reads the Quebecor release.
That said, the CRTC and government usually default to doing whatever it takes to keep struggling media outlets afloat, no matter what, or no matter how the Commission might have to pretzelize its own rules – and V is struggling, as our story yesterday shows. In fact, many regulatory caveats were placed in the current owner of V’s conditions of licence when it purchased then-bankrupt TQS in 2008 (which was re-named V) and immediately cut all news and slashed program spending to the bone. (The current V owner was called Remstar Diffusion back then.)
As well, it is hard to see who else could buy V because the CRTC and Competition Bureau certainly would not allow Quebecor to purchase the network, given its dominance in Quebec and it is difficult to think of another company which would be interested in buying V. Noovo could be purchase by anyone, however, as the online world is exempt from CRTC regulations.
All of that said, Péladeau is adamant this deal must be turned down. "Bell was originally a monopoly and its actions of recent years appear to be aimed at becoming a monopoly again and adopting a business model based on the elimination of all competition," he said in his press release.
"The acquisition of a French-language conventional network will not only increase Bell's dominance but prevent other players from being competitive in content acquisition and advertising offerings. After the absorption of Astral by Bell, yet another Québec head office will be swept away by a Toronto-based giant. At the end of the day, Québec television viewers will lose out. Is this the future we want for Québec television?
“As a shareholder in V through Investissement Québec, the government of Québec must intervene to block this deal. In the long run, this takeover would threaten our ability to maintain the requisite resources to sustain our newsrooms and our expertise in news coverage, one of the foundations of a healthy and vibrant democracy."
Added TVA president and CEO France Lauzière, in her company’s statement: "It is short-sighted to think that this transaction will strengthen Québec's television ecosystem. As in the case of the acquisition of Astral's specialty channels, the addition of an over-the-air network will only increase Bell's bargaining power and lead to a market controlled by one dominant player, negatively affecting consumer choice."
Quebecor plans to make its case to the appropriate regulators.
