HAMILTON – While the vultures encircle a faltering Canwest Global Communications, most of whom are trying to pry the company’s valuable specialty channels away, the 100 or so people working for the company’s Hamilton TV station are working on their own bid to save their small piece of the lot.
Sources with knowledge of the discussions say that both Corus Entertainment and Astral Media are working their hardest to tempt Goldman Sachs (the U.S. investment bank which owns most of the equity – if not voting control – of the group of specialties which used to be the Alliance Atlantis channels and which are now run and part-owned by Canwest) to sell its position in the holding company that owns the likes of History Television, HGTV, Showcase, Slice, Food Network, National Geographic, IFC, BBC Canada, BBC Kids, Discovery Health, Fine Living, Showcase Action and Showcase Diva.
Canwest faces a debt deadline of this Friday and a bankruptcy protection filing is a real option. CanWest’s $300 million credit facility was cut to $112 million this month and the company is in negotiations to extend the February 27th deadline on the waivers which its banks have granted on the loan.
There are few, if any, suitors for the company’s chain of newspapers and apparently no bidders at all for the five-station E! network the company put up for sale this month, according to sources.
But that doesn’t mean there’s no interest. For the past two and a half weeks, several employees of CH Hamilton (Cartt.ca is based in Hamilton and we’re just calling it what everyone here still calls it since most of us in the Steel City never did take to the E! re-brand), led in part by on-air host Donna Skelly, have been working hard on a plan to try and buy the station and dramatically reformat it.
They’ve hired lawyers, accountants and industry consultant Michael McEwen to help guide them through the process. They have already lobbied local politicians of every level and have been rallying the CH troops to the cause, too.
“We want to keep the license in Hamilton,” Skelly told Cartt.ca on Monday. “My concern is that if someone comes in and buys it they’re just going to slash local programming down to next to nothing.”
(Ed note: This has happened already with TQS, where the new owner – the only bidder for the Quebec conventional broadcaster – bought the station and last year was given permission by the CRTC to gut local news, at least for a while.)
There are a number of big items up in the air still, such as how much will have to be paid to acquire CH Hamilton, if Canwest is willing to sell just one of the five E! stations and what sort of ownership structure it would take. Skelly says they are looking at the community ownership of the CFL’s Saskatchewan Roughriders as one potential model.
The popular host adds that those at CH have seen and heard what their corporate masters – and others – think of local programming: That it’s too expensive and they want their obligations to produce such content dramatically cut by the CRTC because they say they can’t afford it.
However, the money is there and the interest is there – but only if the station is changed and TV ads become far more affordable than they have been recently, said Skelly. And she wants to appear at the CRTC hearing on the broadcasters’ more immediate future in April to plead their case.
A CH in the form Skelly is speaking for, would primarily be a local news and regional programming station, whose format would be along the lines of CBC Newsworld or CP24.
“I think our model is innovative,” she added. It’s a combination of all-news and regional programming. It’s a heavy emphasis on local news but adding other types of programming as well.
There would be no more staff cuts, no pay reductions and the new station would be hiring. And, “we wouldn’t have American programming,” noted Skelly.
Ah the ever-ongoing foreign programming debate. “I think what the problem is the CRTC has allowed (Canadian broadcasters) to blow all their money on American programming at the expense of local programming. They can’t make enough money to pay for those costs so they argue that it’s the local commitment that’s draining them – and I would argue differently.”
But the broadcast executives insist they wouldn’t have all that money they earn in the first place without the advertising sold around the U.S. shows that they buy for the Canadian marketplace – and it’s that money that subsidizes local programming.
Skelly believes the big broadcasters no longer have any idea whether or not they can make money in local content or local news because the big broadcasters’ ad sales are almost completely geared towards national advertisers, pricing local businesses – who still want to be on TV – out of the market.
When Skelly was part of Torstar’s bid in 2003 to try and win a station license for Southern Ontario (that went to Craig Media’s ill-fated Toronto One, now the lightly-viewed SUN TV), she remembers being told then by local companies “we can not afford to advertise on our local station because the broadcasters have priced us out of the market,” she said.
The new CH would offer far lower ad rates and look to tap into the local programming improvement fund the Commission established last year.
The LPIF was announced in the fall by the Commission in its new BDU policy release. The amount carriers must pay for the production of Canadian content was increased from 5% to 6%, with that additional percentage set aside for local news. It’s expected the new fund will bring in about $60 million annually and is supposed to launch September 1st.
“We are a perfect candidate for that fund,” said Skelly.
But without wholesale change, without new thinking about local TV, its future may be short, and in a Hamilton-Halton-Niagara region that numbers about a million people, that is surprising. “You can not let this community go without local news. We’re not served by anyone else,” she added.
If we continue on our existing path, “you’re going to see local and regional news disappear,” cautions Skelly. “We’re not going to get it if they keep allowing the big guys to cry that they can not create local programming or local news. It can be done, just not in the traditional model.”
And without new thinking, new ways of doing TV, the Hamilton-Halton-Niagara region would be the largest in the country without a local TV station.
And that, says Skelly, “would be unforgivable.”
