GATINEAU – A number of companies are worried about Bell getting bigger.
In July 2019, Groupe V Media announced it was selling for $20 million its five conventional stations to Bell Media. V, previously known as TQS, has had a long story of financial and regulatory problems and its acquisition by Bell had been rumoured for quite some time. (Photo at right are the stars of the V show Ne Jamais Faire à la Maison, or Never do this at Home, Marie-Soleil Dion and Jonathan Roberge.)
On October 29th, the CRTC issued it Notice of Hearing with a short intervention period ending on November 28th.
The most impacted player, Québecor, filed a strongly worded intervention opposing the transaction. “Why does Bell want to acquire V now, after selling it in 2008? Clearly, Bell wants to rebuild its monopoly and achieve dominance in the television industry, and more broadly the media sector in Canada. It is therefore imperative that Bell’s acquisition of V be assessed in terms of its impact on competition in the Canadian market as a whole, ‘said Pierre Karl Péladeau, Quebecor president and CEO, in a news release.
It’s worth noting that Quebecor’s TVA Group is the dominant TV company in Quebec. TVA itself said it holds 38.8% market share in the province.
The transaction doesn’t make sense, since V has been losing money steadily since 2015, so their real intention in paying $20 million, argues Quebecor, is to weaken Quebecor, damaging information, news and diversity of voices. “This is about safeguarding democracy,” reads the Quebecor intervention (in French).
According to financial returns filed with the CRTC, V recorded a loss of $3 million in the 2018 broadcast year (ended August 31, 2018) on $42.8 million in total revenue. That came after a $3.5 million loss in 2017. The channel’s revenue has tumbled 36% since 2015, which has caused it to cut staff from 127 people in 2015 to 47 in 2018. Spending on programming has been cut by 13% from 2015 to $34 million in 2018, all according to CRTC filings.
Like many others, the Independent Broadcast Group (IBG) recognizes the transaction is within the rules spelled out by the CRTC in its Diversity of Voices policy. “While IBG/GDI recognizes that the market share tests established by the Commission for the review of transactions of this nature appear to be met, the transaction nonetheless raises concerns that go beyond the scope of this single transaction.”
Cogeco notes in its intervention that if the CRTC were to rule on this transaction before expected legislative changes were to be adopted (some time after the Broadcast and Telecom Legislative Review panel files its report in January), it could have an impact. In its submission, Bell had advocated OTA television stations should be provided with a second revenue stream (fee-for-carriage). It this policy were to come into effect it would have an enormous effect on the business, says Cogeco.
Québec’s department of Culture and Communications asks for more hours to be devoted to local news in a submission but also wants to ensure that the decision-making remains in Quebec and its executives easily available to the Quebec-producing sector.
Telus is concerned about advertising. “A specific concern that the Commission should consider and address is the impact of the proposed transaction on access to advertising. A VI [vertically integrated] entity has incentives to forego advertising revenues generated by its programming services in favour of using the advertising spots for its own advertising of affiliated carriage services, such as wireless and Internet access services. It is relevant to note that wireless services are among the biggest users of TV advertising in Canada. Accordingly, there is significant benefit to a VI entity in getting preferential access to advertising availabilities,” reads the Telus intervention.
The concern most share, however, is that Bell is already too big of a player in the Canadian communications scene. As the Public Interest Advocacy Centre says it: “Consequently, Bell is a company that functions simultaneously as a: horizontally integrated broadcaster; horizontally integrated BDU; VI broadcaster/BDU/producer; VI TSP/broadcasting undertaking (‘the largest vertically integrated provider of telecommunications and broadcasting services in Canada’); and a ‘media conglomerate’. According to the 2018 BCE Annual Report, BCE is prosperous: BCE’s 10-year total shareholder return is 261% since the end of 2008,” notes PIAC.
“However, if the transaction is approved, PIAC submits the CRTC should ensure an appropriate tangible benefits package that flows to consumers through BPF (Broadcasting Participation Fund) and BAF (Broadcast Accessibility Fund) and impose approval conditions to ensure this is the best possible proposal in the circumstances.”
Finally, Production J is fully behind the transaction. The company argues it will offer access to a well-financed private broadcaster, which is critical to them since the doors of the largest one are now closed to it.
The owner of Production J is Julie Snyder, the ex-wife of Pierre-Karl Péladeau.
The hearing will commence on February 12th, in Montréal.
