Posted in Radio, TV

Bell to buy Astral: But what about media concentration?

CORRECTION (July 14): Fixed list of stations to include an Astral one in Winnipeg that I had missed.

The HuffPost Québec and La Presse scoops ended up lasting only a few hours (most of which people spent asleep), but they were right: Bell has announced it will buy Montreal-based Astral Media in a deal worth $2.8 billion (or $3.38 billion, depending on how you count it).

The deal has serious implications in terms of diversity of voices in media, and has a pretty big regulatory hurdle before it can be approved. Astral owns 22 television services and 84 radio stations, many of which compete with Bell’s 30 specialty channels and 35 radio stations. In Montreal, notably, the deal would create a monopoly for English-language talk radio in Montreal, with CKGM (TSN 990) and CJAD both owned by the same company, and a near-monopoly for English-language commercial radio overall, with four of five stations owned by the same company.

Probably the most telling statement of the press release is this: “Astral products currently represent Bell’s largest single content cost.”

(Imagine that: Just going out and buying your biggest expense. If only I had a few billion dollars lying around, I could go out and buy Videotron and maybe Hydro-Quebec too.)

The competition bureau is obviously going to look into this. The CRTC must also approve the transaction, and could reject the deal or force Bell to sell off some assets if it believes they would harm competition. (The deal includes a $150-million payout from Bell to Astral if the CRTC rejects the purchase.)

Here’s a bit of a breakdown of how this might play out:

Television

Conventional (over-the-air) television: Astral has stayed out of the conventional television game so far, and owns only two stations in small markets in British Columbia, and both are CBC affiliates.

French-language specialty and pay television: Bell is selling this deal as a big push into the French-language Quebec market, and specialty channels will form a large part of that. Right now, Bell owns only a controlling stake in RDS and its related channels. Astral owns channels including Canal D, Canal Vie, MusiMax, MusiquePlus, VRAK.tv and Ztelé, but no sports-related channels. The CRTC shouldn’t have a problem here. Same for pay television, where Astral is the biggest (really, only) player with Super Écran. The deal would give the company a 26.8% viewing share among French-language specialty channels, but that would still be below Quebecor at 29.6%.

English-language specialty and pay television: Astral also has an interest in English-language specialty, with services including the Family channel and a 50% ownership of Teletoon (with Corus). But the big money is in pay television. Astral owns the Movie Network, Super Écran and related channels, and has a controlling stake in Viewers Choice Pay-Per-View. There isn’t much direct competition with Bell, though it does own channels like MuchMusic and MTV Canada (and related channels for both) which also target a younger audience. But the deal would give bell 41.4% viewing share among specialty channels in English Canada, twice its next-largest competitor (Shaw), which might concern the commission.

Radio

Bell is already the biggest player in commercial radio, with 31% of total listening hours among the big commercial radio players, according to the latest CRTC monitoring report. With Astral, that would go up to almost 45%, in both English and French-language radio. Revenue-wise, 31% of radio advertising revenue across the country would be going to Bell/Astral, which would be twice the next-largest player (Corus).

French radio: Astral has substantial radio holdings in Quebec, with the NRJ, Rouge FM and Boom FM radio networks that in many markets hit the limit of common ownership. But Bell has no French-language radio assets, which means there aren’t any big regulatory concerns here.

English radio: Here’s where the deal is going to run into some serious problems. Both Bell and Astral are major radio players, and the deal would put the combined company in violation of the CRTC’s ownership rules set in 1998 that state only two stations in one band/language/market can be owned by the same company in a market with eight or more stations, and a maximum of three total (and no more than two in one band) in markets with less than eight stations.

If we assume that the company would keep the highest-rated stations in each market/language/band and sell off the rest, that would put quite a few stations on the chopping block. Affected markets would include the following, with stations ranked according to BBM market share and stations in bold the ones the selling block (again, based on ratings alone – there could be any number of reasons for keeping a lower-rated station):

  • Montreal: Two FM and two AM (with only five commercial stations total, one would need to be sold)
    • #1 CJAD 800 AM (Astral)
    • #2 CJFM-FM Virgin Radio 95.9 (Astral)
    • #4 CHOM-FM 97.7 (Astral)
    • #6 CKGM TSN Radio 990 AM (Bell)
  • Calgary: Three FM and one AM.
    • #4: CIBK-FM Virgin Radio 98.5 (Astral)
    • #6: CJAY-FM 92.1 (Astral)
    • #14: CKCE-FM Kool 101.5 (Bell)
    • #16: CKMX Classic Country 1060 AM (Astral)
  • Ottawa: Four FM and two AM.
    • #2 CFRA 580 AM(Bell)
    • #4: CJMJ-FM Majic 100.3 (Bell)
    • #10: CKKL-FM BOB 93.9 (Bell)
    • #11: CKQB-FM The Bear 106.9 (Astral)
    • #13: CFGO Team 1200 (Bell)
    • #14: CJOT-FM EZ Rock 99.7 (Astral)
  • Toronto: Four FM and two AM. The AM situation, with a news-talk owned by Astral and a sports station owned by Bell, is similar to the situation in Montreal.
    • #3: CHUM-FM 104.5 (Bell)
    • #6: CKFM-FM Virgin 99.9 (Astral)
    • #7: CHBM-FM Boom 97.3 (Astral)
    • #8: CFRB NewsTalk 1010 AM (Astral)
    • #19: CFXJ-FM Flow 93.5 (Bell)
    • #21: CHUM TSN 1050 AM (Bell)
  • Vancouver: Four FM and three AM. Vancouver is the only market where the combined company might own more than two AM radio stations. Bell’s stations are in the unusual situation of being co-branded, with one as a secondary station to the other. It’s not clear whether that would be enough to bypass the CRTC’s ownership rules.
    • #1: CHQM-FM QM 103.5 (Bell)
    • #4: CFBT-FM The Beat 94.5 (Bell)
    • #5: CKZZ-FM Virgin 95.3 (Astral)
    • #10: CKST Team 1040 (Bell)
    • #14: CISL 650 (Astral)
    • #16: CHHR-FM Shore 104.3 (Astral)
    • #19: CFTE Team 1410 (Bell)
  • Winnipeg: Four FM and one AM

In Montreal, the CRTC would take note of the fact that the combined company would own both English AM talk radio stations here. Overall, Bellstral would own four of the five English-language commercial radio stations in Montreal, with only Cogeco’s CKBE-FM The Beat 92.5 as competition of any sort.

As you can see from the list, there aren’t many big national brands at play here. The company would probably keep its Virgin-branded stations from Astral, and its Team/TSN sports radio stations from Bell, and sell off stations that are weaker performers in their markets.

Telecom

Astral doesn’t own any cable or satellite companies, so there aren’t any issues directly here. But the fact that Bell sees this purchase as a benefit to its satellite and Fibe TV service by owning one of its biggest expenses will be looked at.

Other assets

Bell doesn’t have any newspaper holdings (aside from its interest in the Globe and Mail), which might also cause issues with regulators (the CRTC won’t allow a company to own a newspaper, TV and radio station in the same market). Astral doesn’t own any significant online assets that aren’t tied to other assets.

There’s also Astral’s huge outdoor advertising business, but I do my best to ignore that.

My take

I’m a bit surprised that Bell thinks it can get away with this. People are already worried about concentration of media ownership in Canada, and now one of our few big players is buying another. It’s not as significant as if, say, Bell decided to buy Shaw or Rogers, but it’s still very worrisome, especially in English radio and English specialty television. Even if the CRTC forces some assets to be sold off, they’d probably be sold to other major players.

In short, it’s a horrible day for diversity in voices in media.

I have a brief story in Saturday’s Gazette about what the deal means for Quebec, to go with the national story giving the overall picture.

Other coverage

43 thoughts on “Bell to buy Astral: But what about media concentration?

    1. Fagstein Post author

      Pete Marier joining the 990 morning team (Price and Starr) this Monday.

      As a guest host, though. I wonder what he thinks about CKGM and CHOM having common ownership.

      Reply
      1. Gazoo

        probably had an extra Irish beverage when he was with them this morning at their St Patty’s day on location broadcast!

        Reply
  1. Andy

    Talk about the death of media as we knew it this is crazy one company now controls most of the media in our country not to mention its cellular properties this acquisition should never have been allowed

    Reply
      1. Andy

        its only a technicality if its not already done, its all about the Benjamin’s the consumer is only an afterthought. If you want proof of that just try getting decent customer service from the cell division
        its time to allow the US media company’s in to compete.

        Reply
  2. Craig

    With so few hands able to afford to run the media these days in Canada and make profits, I wonder if it is time to allow foreign interests. Imagine selling all those radio stations to, say, ClearChannel…

    Reply
    1. John

      Your right Matt foreign companies will never own any of Canada’s broadcasting system because it violates the broadcasting act just look at how long it took the government to open up telecom only to allow small players with 10% market share be foreign owned Canadian broadcasting and telecommunications should remain in Canadian hands…… and about Clear Channel they can’t even afford to keep the radio stations they have and most of there radio stations have no DJ’S because they fired them all to cut costs and many economists believe they will be bankrupt by 2016 due to the huge debt maturities they have coming due and can’t afford to pay……. the last thing we want is Clear Channel in Canada NO THANK YOU!!!!

      Reply
  3. Craig

    Anyway, hypothetically, let’s say a Bell-Rogers merger happened in the future. I wonder if the CRTC would say anything with that?

    Reply
    1. Fagstein Post author

      Anyway, hypothetically, let’s say a Bell-Rogers merger happened in the future. I wonder if the CRTC would say anything with that?

      Yes. For one thing, both companies have cable/satellite interests. And Rogers bought Citytv because the CRTC forced CTV to sell that network when it bought CHUM.

      Reply
  4. Pefder Magfrok

    Bell is certainly the Deathstar of canadian media/telecom enterprises.

    Can anything they do not be construed as deeply evil and/or anti-competitive?

    Guess not!

    Time to break up this conglomerate.

    Reply
  5. David

    If there any NDP members in Ottawa they should stand up today and make their protest known.

    This is a terrible day for Canadian broadcasting,because it is simply about money,on both sides.

    the fact that Rogers and Quebecor or frozen out of this is particularly troubling.

    Also it should be noted that Corus just last year dumped their Quebec properties to Cogec,saying that they were not profitable.

    Reply
  6. Neil K.

    WOW!! This will really shift the balance of power in anglo radio in Montreal!

    Bell will have to divest itself of one of its English stations under the current ownership rules. Three anglo stations is the maximum an operator can own in this particular market. In most large Canadian markets a licensee can hold four stations (two AM/two FM). This is why the original sale back in 2002 of CHOM to Standard took so long. They had to figure out what to do with 990, which CHUM (now Bell) eventually decided to keep.

    Of course recent Cogeco decisions have shown the CRTC is willing to break its own ownership rules.

    It would be ironic if Bell is forced to sell off TSN 990, for oh so many reasons.

    Reply
  7. Justin

    You mean there’s still people who listen to commercial radio and TV ?

    No seriously, who cares ? I understand this is big money and big media but in all honestly, I could really care less about what happens in this space. If it’s not on the web, it doesn’t really exist for me.

    J

    Reply
    1. Fagstein Post author

      No seriously, who cares ? I understand this is big money and big media but in all honestly, I could really care less about what happens in this space.

      If you don’t care about media and broadcasting, you probably shouldn’t be reading this blog.

      Reply
      1. wkh

        He didn’t say that. His point was that these are dying mediums, although perhaps not as close to death as the younger people would believe.
        I can kind of relate. I only listen to music on the radio. The second someone starts talking I turn the channel unless I am spaced off. Talking = commercial or the dreaded “radio personality”. I don’t watch English language tv really, except an occasional program here and there usually on the request of my husband (if he wasn’t watching I wouldn’t). And I’m old. Who are watching these channels and stations anyway?

        Reply
        1. Fagstein Post author

          Who are watching these channels and stations anyway?

          Hundreds of thousands of people. CTV News at 6 has 193,000 viewers on average. Four of Montreal’s five English-language commercial radio stations reach more than 100,000 people a day.

          Reply
            1. Fagstein Post author

              So, CFCF is down to 193,000 average. Not bad in a metro area of 4 million.

              The survey covers just anglo households, so the market size is actually just under 1 million. It has an 18% rating, so on an average weeknight 18% of anglo households in Montreal are watching this newscast.

              Reply
    1. Michael D

      Are you sure you’re not the one and only Neil Kushnir, the best music director that CHOM ever had. You know too much !!

      Reply
    2. Allen

      If that is true then CHOM can hire back Bad Pete. It can’t be all that bad to work with Cogeco, they are taking all of Astral’s talent (Cat, Nat and Cousin Vinny)

      Reply
  8. James Roberston

    Martin Spalding to run four Montreal stations now?
    Will TSN get the rights to the Alouettes and Impact as well?

    Reply
  9. Shawn

    Big as this is, it still doesn’t seem as monopolistic as Quebecor, imo, in that it doesn’t stack up huge circulation newspapers WITH electronic media and delivery systems.

    Maybe I’m being paranoid, but I’m also looking forward to seeing how the CRTC responds to the inevitable objections of Quebecor, given the apparently cosy relationship between Quebecor and the Conservatives.

    Reply
    1. Fagstein Post author

      Big as this is, it still doesn’t seem as monopolistic as Quebecor, imo, in that it doesn’t stack up huge circulation newspapers WITH electronic media and delivery systems.

      Except Quebecor doesn’t have any radio stations.

      Maybe I’m being paranoid, but I’m also looking forward to seeing how the CRTC responds to the inevitable objections of Quebecor, given the apparently cosy relationship between Quebecor and the Conservatives.

      I don’t see what grounds Quebecor would use to object to this deal. And in the past they’ve come out pretty well against regulation (except where it serves their wireless interests).

      Reply
      1. Jordan

        Quebecor will only start screaming when the Remillard’s sell Bell the former TQS, this is in the monopoly plan but only after the authorities approve the Astral acquisition

        No sense to rock the boat now but it is in the future monopoly plan

        I feel terrible for longtime Astral employees who will be thrown off the boat into the frigid waters

        Reply
    2. Jimmy Jack

      “given the apparently cosy relationship between Quebecor and the Conservatives”

      Sorry, you should have said “given the apparently cosy relationship between Quebecor and money”

      PKP doesn’t give a crap about the Conservatives, the NDP, the Liberals or any other political party. he just wants all of your money if you happen to live in Quebec.

      That aside, in no manner whatsoever should BCE be allowed to swallow Astral. The Greenbergs will have to wait another day to cash in.

      Reply
  10. Pingback: Industry Update – Bell/Astral, CRTC, APTN | TV, eh?

  11. Sheldon

    Given the two-page spread in today’s Gazette by Bell regarding the Astral acquisition, it doesn’t seem that they are all too worried about the sale not being approved by the CRTC.

    Reply
  12. Michael D

    Well, you all knew I would be weighing in on this one. Steve, your take on this is pretty well accurate..Most , not all, of the comments posted here are with merit.

    So let the games begin!

    So what do we sell here in town. One comment here makes sense about the CHOM idea being the one to go, and this based on Steve’s comments about brands. Virgin and TSN/Team are the brands here, so good forms of national ad revenue as well as local. CJAD is the traditional station, like CFCF/12 aka CTV..So I don’t see them selling that one and still a big moneymaker with the Als’ and Impact rights, but bad for for the sports teams with bidding rights to broadcast going out the window.

    Now maybe, if the deal goes through, would be a good time to complete the changeover or makeover started earlier last year, with all the shifts after 12 noon. In other words, time to depart with the boring Andrew Carter and the rude Mr. Schnurmacher, especially. If they sell CHOM, would they want to keep Terry DiMonte and entice him to go mornings at the home of his mentor, the late great George Balcan. It should be noted here, that of all the morning men that sat in George’s chair, Terry has had the highest ratings!

    As for CHOM being sold to COGECO, this would mean that COGECO, would mean they would own a rock station and a so-called hits station, which is what Astral owns now, i.e. CHOM and Virgin.

    But, alas, there’s an ace in the hole here lurking in thr shadows.And another 3rd voice in the market, which would seem to be ok with the CRTC, and that is the TTP scenario. Are you listening or reading this Mr. Teitolman?

    With TTP already owning a licence for a French all-news station at 940, this would be a good time to add its voice. The need would still be there for their English all-news station,even more so now, most likely at 600 AM, but acquiring CHOM would be a nice fit and some much needed instant revenue, and not breaking any ownership rules. In this scenario, they would own one Anglo station in each band.

    And they seem to also want to get into FM music game as well with their recent application for an FM licence in Calgary, which I don’t know if those licences have been awarded yet. What are your thoughts on this Steve? I know I like it on the surface.

    As I said, let the games begin !

    Reply
    1. Fagstein Post author

      I’ve heard plenty of people who think CJAD will be the one to go. Its links to CTV and to the other Astral stations are not inseverable, and it’s not the money-maker that CHOM and CJFM are. There might also be interest in the station from the Tietolman group, which is looking to start an English-language news-talk station, and from Cogeco, which has a French-language radio news network in Quebec and could take advantage of its existing infrastructure to easily accommodate a new station. Rogers, which also owns news-talk AM radio stations in Canada, could also pick it up.

      There’s also a case to be made for CHOM, if CTV thinks CJAD is more important in terms of content. CHOM is not a national brand, and it has been struggling in the ratings. New ownership might think they’d have a better chance if they could convince disgruntled former employees like Ted Bird and Pete Marier to come back to an independently-run station.

      Or there could be something entirely different that comes about. Maybe Bellstral combines CJAD and CKGM into a news-sports station like 98.5, and then just sells one of the two frequencies (Cogeco is still looking for somewhere to put its English all-traffic station, and might pay good money for 690AM). Or maybe they somehow convince the CRTC that there’s no problem with it owning four of the five English-language commercial stations in Montreal. Or maybe the competition bureau or CRTC forces them to sell two stations instead of one.

      Reply
  13. Marc

    Should this deal go through, which I hope it does not, I think CHOM will be the station they shed. Who could pick it up? I don’t see Shaw or Rogers entering the market to pick up one station unless they have other plans of their own, but what about a new local group of investors or perhaps T-T-P?

    Reply
  14. Neil K.

    You have to remember that CTV will be forced to sell 11 stations, and they don’t want to do it on a one-by-one basis. That means each transaction has to go through the approval process. They’ll be looking for someone to pick up as many of the stations as possible, in a package deal. One CRTC application for the whole lot.

    Corus and Rogers are at their ownership limits in many markets, and Corus is about to be bought by Shaw (mark my words). So that leaves “second-tier” but very aggressive nationals like NewCap or Evanov. Evanov is setting up shop in town soon anyway, building studios and hiring sales staff, so the timing would be perfect to integrate CHOM. It would also give their sales department lots of potential to woo new advertisers by using CHOM as the hook.

    Of course depending what stations Bell decides to sell, Evanov or NewCap could have format conflicts with their own existing stations. But looking at Steve’s chart, it seems like most Bell or Astral music stations across the country were fairly low in their market rankings (Montreal of course being the exception) so those weak-performing stations might be flipped to new formats by their new owner(s) anyway.

    I don’t agree CJAD will be the one to go. It’s the #1 anglo station and will provide lots of synergy to the TV news and TSN radio operations,as well as Virgin. Lots of staff can be used for all four outlets. And, I believe CTV still intends to try to start an RDS radio station in the future. They can do it on AM.

    Reply
    1. Darren Mercer

      These deals seem to happen in close succession to eachother, there seems to be a contagion effect. I think an integration of Corus into Shaw seems inevitable at this point (and ironic, as Corus was spun off from Shaw in 1999, and is still controlled by the Shaw family).

      I would also not be surprised to see Rogers purchasing COGECO, as a way to expand into Quebec as well. Rogers may even be feeling bullish enough to aggressively seek an acquisition of V from Remstar.

      More interestingly, I’m wondering what this means for Telus. They have largely been pursuing a content-agnostic business plan, quite successfully for now. Their subscriber numbers are growing quickly, and they are on track to pass Bell to become the second largest mobile carrier in the country. It would be a shame if this increasing media concentration forces them to reconsider their plans, and start acquiring media companies themselves.

      Reply
  15. Pingback: Tietolman interested in buying CJAD – Fagstein

  16. Michael D

    Well, it’s too quiet for my liking these days, anybody hear anything with TTP? We know they’ve sniffed around the Astral Fort St. building, which I would have done myself as well, seeing a lot of the wiring,etc is in place….

    But have they made any or started the applicarion process for their English language all-news station..most likely at 600 khz…just wondering…

    Reply
    1. Fagstein Post author

      Well, it’s too quiet for my liking these days, anybody hear anything with TTP? We know they’ve sniffed around the Astral Fort St. building, which I would have done myself as well, seeing a lot of the wiring,etc is in place….

      But have they made any or started the applicarion process for their English language all-news station..most likely at 600 khz…just wondering…

      When I last talked to Paul Tietolman, they still hadn’t settled on a transmission site and were negotiating with Cogeco about the use of their still dormant transmitter in Kahnawake. The CRTC hasn’t announced an application, but Industry Canada has added an entry in its database for a transmitter at 600 kHz owned by TTP at the Cogeco site.

      TTP is heading to Toronto, where it’s appearing at a CRTC hearing Monday into applications for new FM radio stations there.

      Reply
  17. Eric

    When Bell Monopolizes TV Radio Internet Phone Service etc.: they have their claws in everything, the Conservatives will still stand up and cheer the virtues of unrestrained unregulated capitalism. A system if left unchecked is designed so eventually everything will belong to a very few. (keyword unchecked)

    The bigger you are the easier it is to kill the competition. Not by providing a better service but using political clout to deregulate everyone else out of business. Diversity is born out of competition, but their has to be competition.

    At this point Bell has demonstrated to us quit clearly they are not interested in a fair competitive industry, only domination. Bell could make other investment in other industry but they have chosen to go against what we all see as a vital part of capitalism, a competitive environment. They have turn their back on our system of checks a balances and are trying to establish total media control. Where I stand it looks to me like Bell has embraced fascism as their preferred method of Governance.

    Reply
  18. Pingback: “Say No To Bell”: The hypocritical campaign against Bell/Astral – Fagstein

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