Will the CRTC let Bell buy Groupe V Media?
By Denis Carmel
MONTREAL – Another chapter in the ongoing saga between Québecor and Bell took place on Wednesday when Bell appeared in front of the CRTC to seek permission to buy Groupe V Media (once known as TQS), a French conventional television network operating in the Quebec market.
The transaction has a price tag of $20 million. The sellers are Remstar (45.14%), Fiducie Seismikmax (9.86%), Caisse de Dépôt et de Placement du Québec (15%), Fonds de Solidarité des travailleurs du Québec (15%), and Investissement Québec (15%). Maxime Rémillard, through Remstar and Seismikmax exercises effective control of the company.
The stations would directly compete with Québecor’s own TVA and, of course, Pierre-Karl Péladeau, Québecor’s CEO, has launched a public relations campaign to incite the CRTC to reject the acquisition (see their ad at right).
The Montreal hearing, done en Français of course, started with some delay due to technical issues.
V Media began by saying how difficult it is for a non-integrated independent player to survive in an era where digital players are dominating the market. Rémillard said that when he took over in 2008, in the middle of a recession, the company was under bankruptcy protection. He rebranded the station and over time invested $37 million in Canadian content. However, profitability never arrived and so he decided to call it quits.
The obvious suitor was Bell and they came to an agreement where Rémillard keeps his two specialty channels (Max and Elle) and Bell takes over the five conventional TV stations. Bell already has a radio and specialty television presence in Québec but no conventional French-language TV, so the acquisition makes sense to offer advertisers a one-stop shopping approach.
It will come at a cost, however. In order to maintain a news offering, V farmed it out, so the broadcaster does not have an in-house news operation, something which Bell has committed to rebuild. It is asking for the status quo, however, until the end of V’s current licence term, in August 2022. At that point, increased levels of contributions would be discussed.
Some questions were asked about where the business decisions would be made. Of course, Bell replied that the broadcaster would be run in Montreal. The question stems from allegations that important French radio and specialty TV decisions following the Astral transaction were transferred to Toronto.
Bell is requesting that the renewal decision take effect on September 1, 2020.
“It’s more than a multi-tentacled octopus, it’s a public menace.” – Pierre Karl Péladeau
Of course Québecor is against the transaction and Péladeau was in fine form: “Now that its control over the media has reached dominant, even predatory, proportions, Bell wants to complete the process of monopolization by acquiring V,” he argued in his opening remarks.
Contrary to Bell, which does not envision an impact on the national market but only on the Francophone market, Péladeau argued that when Bell looks to acquire foreign content to broadcast it in French, it would have an unfair position since the company can split the costs between both markets. He gave the example Game of Thrones, for which Quebecor had tried to obtain the French rights.
ʺSince the prices and volumes of English-language content acquisition in Canada are much higher than for French-language content, Bell will use the acquisition of English-language rights to force content providers to bundle in French-language content, thereby bypassing any competition in the French market,” he added.
Bell also dwarfs Quebecor on the national advertising side as well as the content side, said Péladeau.
Hyperbolic as usual, he added, “Government authorities must intervene to curb this concentration that even George Orwell had not foreseen… It’s more than a multi-tentacled octopus, it’s a public menace,” he added.
But can the CRTC actually say no to this deal?
If the Commission denies the transaction, V will likely shut down. When Remstar bought it in 2008, it bought it from Bell, partner at 40% with Cogeco, when the two companies put it under bankruptcy protection.
Bell and Cogeco had bought it from Québecor when Québecor bought TVA and the CRTC determined it could not keep both.
When TQS was launched, in 1986, TVA, not owned by Québecor at the time, engaged in a price war that saw the ad rates fall dramatically. It is thought that the Quebec market, to this day, has still not recuperated as ad rates are still low compared with the English market.
Thursday is the second and final day of the hearing and will include a presentation from the Independent Broadcast Group, among others, and a final reply from Bell and Remstar.
Photo borrowed from Pierre Karl Péladeau’s Instagram feed.
