WHY WOULD KEITH PELLEY move to Rogers Communications? That’s the question the industry is asking this week. There are many speculative answers, but let’s try to look at some facts before we lob our own opinion-grenades.
Pelley is a sports guy. A TV guy. A sports TV guy. He’s a heck of a broadcast executive who is still riding a massive wave of goodwill generated by the stellar Winter Olympics broadcast, one which he constructed from the ground up and oversaw. He and his people did a terrific job and with a bit of downtime between now and the 2012 Olympics in London, he was given a plum EVP post at CTVglobemedia about four months ago to go along with his job of running the CTV-Rogers Olympics broadcast consortium.
And yet he’s leaving the company with the top sports TV brands and so many of the top sports and television properties for Rogers Media, a nice division within the RCI stable, but on the TV side, pretty small potatoes compared to CTVgm.
Rogers has a small OTA network in Citytv and a multicultural network OMNI. CTVgm has the biggest, most popular OTA network in Canada. Rogers has in its specialty TV stable Rogers Sportsnet and its regional channels, the new Sportsnet One, OLN, G4TechTV and Bio. CTVgm has TSN, TSN2, ESPN Classic Canada, RDS, CTV News Channel, NHL Network, a number of Discovery brands, The Comedy Network, Comedy Gold, MTV Canada, all the MuchMusic brands, Bravo, Space, Star, BookTelevision, FashionTelevision and CP24.
Maybe Pelley really wants to run the Toronto Blue Jays (he did run the Argos, after all)? Or wants to see how a larger radio operator works (CTV has 36 stations, Rogers, 54), or get deeper into print (CTV has the Globe and Mail, but Rogers is the largest magazine publisher in Canada). The challenge of something new is always exciting to top executives.
I can’t count how many industry folks have openly speculated that CTVgm CEO Ivan Fecan will retire or move on soon – and Pelley would certainly have been in, or at the top of, the mix to take that job. Perhaps Pelley didn’t want to wait on Fecan. Who knows? Rogers isn’t making him available for interviews at the moment. He’s also no longer the head of the Olympics broadcast partnership for now.
So why go?
Well, maybe the scuttlebutt we’ve been hearing all spring and summer about CTVgm being on the block is true and that Rogers Communications plans to buy. And if that’s the case, in Pelley Rogers has hired itself someone who would have been privy to exactly what’s going on at the most senior levels at CTVgm and what the company has planned, strategically.
[Speaking of strategy, I also wonder how Pelley wasn’t tied to a long non-compete contract (as most senior executives are) where he wouldn’t be able to jump ship so quickly?]
Setting aside for a moment how current minority shareholders Bell Canada (15%) and Torstar (20%) may also want a crack at buying control of CTVgm and likely have first right of refusal (but also knowing that Bell CEO George Cope probably doesn’t want to be accused of returning his company to Jean Monty-esque days and Torstar probably doesn’t have the resources to compete in a bidding war), there are also regulatory hurdles for Rogers to jump around.
But, if we look at the Shaw Communications, as well as its request to buy Canwest, there are routes for Rogers to consider in order to bring CTVgm into the fold.
Shaw is the largest Canadian TV distributor with over three million cable and satellite subscribers. The Shaw family also owns Corus Entertainment, one of the biggest specialty, pay TV and radio broadcasters we have. But Shaw’s proposal to buy Canwest envisions the creation of another, separate operation with its own board and decision-makers, distinct from both Shaw and Corus.
Rogers could do this with CTVgm. The Rogers family could buy control of CTVgm (it’s not known if Bell or Torstar would sell their positions) from its majority shareholders (the Thomson family has 40% through Woodbridge, the Ontario Teachers’ Pension Plan, 25%) and maintain it as a separate entity from Rogers Communications. Neither Woodbridge nor OTPP have indicated publicly their desires for CTVgm, for that matter.
But back to the Shaw parallel. Besides the benefits package, one of the pressing issues it will have to address in front of the Commission next month is the predominance of ownership of channels aimed at women. Corus has W, W Movies, Cosmo TV and Viva. Canwest has Slice, HGTV, Food Network, and Showcase Diva. Part of Shaw’s argument will be that they are separate, competing, companies, despite the fact that JR Shaw’s name is atop the ownership charts for both.
Rogers would face the same questions on the sports TV front if it tried to keep Sportsnet and TSN. Now that’s not an apples-to-apples comparison since “women’s programming” is nowhere near as easily defined as sports and under this scenario, the Rogers family would utterly dominate sports TV and radio (and digital) in Canada and would face a serious challenge at the Competition Bureau as well as the CRTC.
If this were to happen, the better, cleaner, bigger angle for Rogers would be to purchase CTVgm and package Citytv and Sportsnet (which just got more valuable with the launch of Sportsnet One and the content deals it has signed), in a package to another broadcaster like Quebecor, Astral or Corus, or even Maple Leafs Sports and Entertainment, none of which appear to have the wherewithal or desire to go after all of CTVgm.
Pelley then, would oversee the CTVgm assets he already knows (and then remain involved in the Olympics partnership, which would be entirely under the RCI umbrella – or pick a successor there).
Rogers would have to do some work on the radio side, too. Given the Commission’s policy of two stations in each band per market, there are 15 conflicting station licenses that I can see. Then again, if the CRTC grants Cogeco’s special exemption for Montreal, maybe Rogers has a chance to hang onto some of these under such a scenario.
All this, just from one executive moving on.
