TORONTO – It was a an open secret in media circles, as many have reported, including Cartt.ca, but today it was made official: Rogers Communications has signed a deal to purchase the chain of A-Channel stations and other assets put on the block when CTVglobemedia acquired CHUM Ltd.
In officialspeak: "Rogers Broadcasting, a Rogers Media subsidiary, would acquire certain Canadian conventional and specialty television services from CTVglobemedia Inc. These assets are currently under the control of Mr. John D. McKellar, C.M., Q.C., Trustee under a Voting Trust Agreement in respect of CHUM Limited. CHUM Limited and Mr. McKellar are also parties to this agreement."
There were two rounds of bidding but it’s not known at this time who the competing bidders were. A CTV spokesperson declined to comment further than the press release issued this morning.
Rogers Broadcasting president Rael Merson told Cartt.ca today that the company has not thought about branding of the channels just yet as financials dominated most discussions since the bidding process began in late January.
However, of primary concern will be filling the Canadian content schedule holes that will remain after shows like BreakfastTelevision, MovieTelevision and The New Music are no longer available to the A Channels.
"The biggest issue for anybody looking at the stations is how you produce enough priority programming to meet the mandate for the stations as well as how you produce enough shared programming," said Merson.
"The rest of the stuff we really haven’t had to think about much."
While there have been some rumors about this being step one along Rogers’ road to becoming a real national conventional broadcasting player (The rumour mill said the next step would be a purchase of CanWest Global’s CH channels), Merson said he’s comfortable with what he will have, assuming regulatory approvals are granted.
It’s going to be very difficult for anyone… to compete with Global and CTV at the highest level," said Merson. "What we wanted to ensure was that we didn’t lose out place in the television marketplace."
"It’s clearly a secondary network. It isn’t primary network. It will never be competitive with CTV or Global and probably won’t even be competitive with City. But, it ensures we’ve got a place," he added.
"We’re very comfortable with the idea that we don’t have to compete with them, that there’s enough room for a few more over the air players, and that we can build a decent business filling in behind the big guns. That’s really what we’ve done at OMNI – we’ve never really competed with them. We are just going to have a different niche to work."
And about the CH rumors? "It’s not true at all. It has never come up. We have never expressed any interest and we’ve never even broached the question."
This deal will be part of the equation when CTV faces the CRTC April 30th to ask for regulatory approval of its purchase of CHUM (Citytvs in Toronto, Edmonton, Calgary, Winnipeg and Vancouver, 30 radio stations, MuchMusic, Space and a number of other specialty channels).
Today’s announced transaction is also subject to Competition Bureau approval. That tribunal has already approved the CTV-CHUM deal, however. (Ed Note: While on the face of it, the industry and regulators will be pleased with the deal since a large corporation is willing to take on broadcast outlets serving smaller markets, there will be local folks in, say, Ottawa and London, who will worry that Rogers owning a local broadcaster, as well as the local cable company and several radio stations is too much power for one company in single markets.)
The all cash transaction is valued at $137.5 million and includes the following television assets:
* The A-Channel station group of six over-the-air conventional broadcast television stations including CIVI Victoria, CHWI Windsor, CKNX Wingham, CFPL London, CKVR Barrie, and CHRO Ottawa
* CKX-Television, an over-the-air conventional CBC affiliate based in Brandon, Manitoba broadcasting CBC, local and syndicated programming to Western Manitoba and Eastern Saskatchewan;
* ACCESS Alberta, the designated provincial educational television broadcaster for Alberta, available over-the-air and via cable, satellite and telco distributors;
* CLT (Canadian Learning Television), Canada’s only national educational television specialty service designed to inform, enrich and educate, available via cable, satellite and telco distributors
* SexTV: The Channel, an English language digital specialty service, dedicated to love, romance, marriage, relationships, sexuality and gender issues, available across Canada via cable, satellite and telco distributors.
The deal adds needed scale to Rogers’ TV division, but doesn’t quite give it the size to be an additional national broadcast player, when compared to CTV and CanWest. The assets, if approved, will join its two multicultural broadcasters in Toronto, OMNI.1 and OMNI.2, faith stations in Vancouver and Winnipeg (also branded OMNI), as well as specialty channel Rogers Sportsnet and retailer/specialty service, The Shopping Channel. The company also owns pieces of the Biography Channel and G4TechTV (both of which it operates) and minority positions in Viewers Choice Canada and Outdoor Life Network.
Merson expects to find synergy with Rogers radio stations in the markets where they will have both, assuming the sale passes the regulator’s tests. "That’s what CHUM has done. They have operated their radio and television properties in Ottawa together," he noted.
"The reality is the A Channels are really local businesses that are much more akin to radio than the conventional network television. So much more of their revenue comes from the local rather than the national side of the business – and radio is the most local medium, so there are natural synergies on the sales side,"
The one small piece of business oddly left hanging by the announcement was that CTV has previously announced its intention to sell off its one-third holding of Outdoor Life Network, but today’s release doesn’t mention that asset, even though Rogers also owns a third, along with U.S. MSO Comcast, which last year dropped the OLN brand on the American channel in favor of Versus.
Negotiations over OLN are still ongoing, added Merson, who confirmed Rogers’ interest in acquiring CTV’s 33.3%. OLN and CLT earn about the same amount of revenue.
(Also unmentioned were the 50% ownership positions CHUM holds in French music MusiquePlus and Musimax. However, it’s expected co-owner Astral Media will purchase those pieces.)
"Rogers has built its successful television business by serving community-focused and niche audiences," said Rael Merson, president, Rogers Broadcasting, in this morning’s press release. "The acquisition of these 10 television services will significantly expand our television operations and solidify our position as an important participant in the Canadian television industry. This also complements our strong position in Canadian radio, sports broadcasting and publishing."
"These important stations are run by very talented people and we are delighted to have been able to find them a wonderful home at Rogers Broadcasting," said Ivan Fecan, CTVglobemedia president and CEO, in the release. "Rogers is a highly respected Canadian media company. They are great builders and as such, are an excellent fit as the purchaser of these assets. I know they will continue to grow the specialty channels and apply their significant expertise, financial resources and commitment to conventional TV to ensure the A-Channel local stations not only survive, but thrive. This acquisition will both provide for diversity of local voices and give Rogers the scale to emerge as the fourth national English language over the air player together with CTV, CanWest and the CBC."
www.rogers.com
www.ctvglobemedia.com
