While everyone’s attention here was naturally focused on what Bell’s plans are for CKGM, the bigger issue up in front of the CRTC on Sept. 10 is the overall $3.38-billion purchase of Astral Media by Bell Media.
The deal would be a straight purchase, gobbling up everything owned by Astral including non-broadcast assets like its outdoor billboard advertising business. Bell would sell off only those things it is required to.
It’s a deal that has prompted a lot of worries about media concentration (though you could say it’s far too late to worry about that). Quebec’s Option consommateurs has already come out against it, generating some media buzz, but otherwise there hasn’t been much organized opposition.
10 radio stations to be sold
As I noted in the post when the deal was announced, a look at the combined assets of both companies shows they would be over the limits (two AM, two FM, and no more than three total in markets with fewer than eight commercial stations) in six markets, and would need to divest itself of 11 stations to meet the limit. In its application, Bell says it plans to sell 10 stations, and convert CKGM to French.
Bell’s application indicates it has provided the CRTC with a list of the 10 stations it plans to sell, but it wants that kept confidential so that those stations don’t become lame ducks, losing staff and morale. Knowing what markets it needs to sell stations in (two FM in Ottawa, one FM in Calgary, two FM in Toronto, two FM in Winnipeg, and two FM and one AM in Vancouver) and what the ratings are for those markets, it wouldn’t take a rocket scientist to find the likely castaways.
Because most of those markets have many English FM stations and multiple independent players, the concern about market concentration isn’t as high there as it is for Montreal’s English market.
Two calculations for TV viewing share
On the TV side, the CRTC’s concern isn’t so much the number of TV services (cable channels are a dime a dozen these days), but viewing share. Specifically, it says it will not allow any one player to control more than 45% of the overall viewing share in either language, and will closely scrutinize any purchase that gives a player between 35% and 45% of the viewing share.
Where Bell fits in depends on how you calculate that share. If you include Canadian viewing of American and overseas TV channels (like PBS, CNN and Spike TV), it falls just under that 35% threshold (33.5%). If you include only Canadian services, it’s just above (38.7%). Naturally, Bell believes U.S. services should be included in the calculation (they represent about 10% of Canadian viewing hours), which makes sense, but also means that one player could own 100% of Canadian television channels so long as 65% of Canadian television viewing is of foreign services. In addition, Bell argues that part of that share is its CTV Two network, which it has agreed to keep operating even though it loses money as part of a commitment made in the purchase of CTV by Bell.
There are also qualitative arguments that Bell uses. For one, Astral has no news or public affairs departments at its TV properties, so there would not be a reduction in diversity of voices here. (Bell conveniently ignores the fact that Astral has many radio newsrooms, and in a market like Montreal it means controlling the biggest TV newsroom and the biggest radio newsroom.) And Astral’s English-language television is limited mainly to its pay TV services like The Movie Network and Family Channel. It doesn’t own many specialty channels in English.
On the French side, because of the dominance of Quebecor and Bell’s virtually nonexistent presence (aside from RDS), combined they would represent only 24.4% of the overall TV viewing share.
Two B.C. stations
It’s a footnote in any discussion of Astral, but it does own two conventional television stations in tiny markets in northern B.C. – CJDC in Dawson Creek and CFTK in Terrace. Both are CBC affiliates with local newscasts. Bell’s application says they would remain that way “for the immediate term” but that this could change. “Following closing, we will determine if, when and how these stations will be integrated into the broader Bell Media conventional television group.”
Disaffiliating from CBC requires a separate CRTC application. But it’s hard not to see them eventually being converted into CTV network stations. Neither is anywhere close to an existing CTV station.
Aside from CKGM and other concerns about concentration of ownership, the biggest debate over this acquisition is probably going to be over what’s called the “tangible benefits” package. When ownership of a television service or radio station changes hands through a purchase, the CRTC requires that what can best be described as a sales tax be spent to improve the broadcasting and cultural system in some way. Usually (and particularly for radio stations), this means giving money to an organization that develops Canadian music talent. Or it could be some increase to Canadian programming beyond the minimum requirements of broadcasting licenses.
Tangible benefits packages are usually calculated as 6% of the purchase price for radio and 10% for television. In cases where the purchase price is effectively negative (such as when Channel Zero bought CJNT and CHCH for $12), tangible benefits packages don’t apply.
Bell’s proposal is for $200 million in tangible benefits, breaking down as $140 million for television (based on a $1.4-billion value), and $61 million for radio (based on a $1-billion value). The latter is to be adjusted based on the value of radio assets it will be forced to divest in the deal. Both, bell proposes, would be paid over 10 years instead of the usual seven, mainly because Bell is still paying off the tangible benefits packages from CTV’s acquisition of CHUM and Bell’s acquisition of CTV.
In case you’re doing the math in your head, the two purchase prices add up to about $2 billion. The rest of the acquisition price includes non-broadcast assets like outdoor advertising, as well as 50% stakes in Teletoon, Teletoon Retro, Historia and Séries+, which Bell feels should be exempt from this calculation because it would not mean an effective change in control of those channels. (Judging by correspondence on this matter, the CRTC might not accept this argument at face value.)
The biggest chunk of Bell’s proposed benefits package is $96 million that will go to “programming of national interest” (comedy, drama, documentary and certain awards shows), the majority of which will be spent on French-language programs because of Astral’s French-language skew. Then there’s the $61 million in radio benefits that will go to developing Canadian music talent and community radio funds.
It’s the other two chunks that are causing some consternation, though. About $40 million is being pledged to “support Canadian programming by making it more widely available in Canada’s North through the extension of next-generation broadband wireline and wireless service.”
That sounds fantastic, doesn’t it? The problem, aside from how odd it is that Bell associates upgrades to 4G wireless service as somehow helping the television broadcasting system, is that this is essentially a network upgrade for Northwestel, the main telco in the territories. And as if we need to point this out, Northwestel is a subsidiary of Bell.
This has not gone unnoticed for Northwestel’s competitors, who call the blatantly self-serving investment “shameful,” particularly since Northwestel has been heavily criticized for failing to modernize its system. The fact that the CRTC has just opened up local phone service to competition only makes such an investment in one company seem even more anti-competitive.
Another chunk of the package getting noticed is $3.5 million over seven years that would go to Bell Let’s Talk Day, which is an annual campaign to raise money and awareness for treating mental illness. I’ve written before about how Bell seems fine with ordering its assets (and even local news departments) to participate in and cover this campaign.
It’s hard to come out against such a charity campaign, but what does this have to do with broadcasting? The CRTC’s goal with tangible benefits is pretty clear, and though such causes are laudable, there’s no provision for essentially donating part of this package to a favourite charity.
The CRTC asked Bell to justify this expense, and here’s their response:
The proposed benefits initiative will be used to help raise money and awareness to help battle mental health issues through the development of PSAs and educational materials, among other things, and will yield measurable improvements to the communities served by BCE and by Astral by contributing to the earlier identification and better management of mental illness in those communities. That is why so many municipalities and provincial governments devote significant funding to pursuing exactly those goals. This multi-platform media initiative will leverage the merging parties’ unique expertise in broadcasting, a different sphere of endeavour than that in which municipalities and provincial governments work.
These improvements are also significant and unequivocal benefits to the Canadian broadcasting system itself. Parliament left no doubt as to the importance of this policy goal, which it required the Commission to pursue, when it declared that the Canadian broadcasting system should strengthen the social fabric of Canada; serve the needs and interests, and reflect the circumstances and aspirations, of all Canadians; provide information and enlightenment; and expose the public to differing views on matters of public concern. As a result, we respectfully submit that making space in the Canadian broadcasting system to address key social issues, which include mental health, and that raise both money and awareness in support of those issues, is the very epitome of the significant and unequivocal benefits to which the tangible benefits policy was directed.
I don’t know about that.
As the Globe and Mail’s Simon Houpt explains, all this stuff might be boring financial policy stuff, but it’s important. We’re talking about hundreds of millions of dollars being injected into Canadian broadcasting. It’s the CRTC’s job to ensure Bell is spending it properly to benefit the system more than itself.
Correspondence between the CRTC and Bell that forms part of the public record on the application makes it clear that the commission is challenging Bell on all of these matters. Expect them to get discussed in depth at the September hearing.
The CRTC hearing into Bell’s proposed purchase of Astral Media is scheduled to begin Sept. 10 at the Palais des congrès. People wanting to file comments with the CRTC or appear at the hearing can file an intervention here (the application number is 2012-0516-2: Astral Media inc.). The deadline is Aug. 9. Note that comments – including names and contact information – are on the public record.
UPDATE: In a somewhat unrelated press release about winning an old lawsuit against Bell related to its ExpressVu satellite service (now Bell TV satellite), Quebecor CEO Pierre Karl Péladeau made it very clear he and his company are against the Bell-Astral merger, using language you don’t usually see from bosses of big companies:
Bell puts forth considerable efforts to obtain a virtual monopoly of French specialized channels through the acquisition of Astral Média, that would give it 8 of the 10 most popular French specialized and pay TV channels, as well as 67% of the audience and 80% of ad revenues in this market. In the Canadian market, in both languages, over 41% of monthly subscription fees paid by specialized channel viewers would go to Bell, as would 45% of these channels’ advertising revenues. Of the 51 specialized and pay channels that would be controlled by Bell as a result of this transaction, 28 are genre-protected and 30 are must-carry channels in their respective markets. The situation is equally problematic in radio, where Bell would own 117 radio stations across the country, while also exerting total control over all specialized music television channels.
“We call on the CRTC to refuse to approve this transaction on the basis that Bell’s business practices do not meet the ethical standards expected from a company that has the privilege to exploit broadcasting services through licences granted by the CRTC for the benefit of all Canadians. If such practices were to go unsanctioned, Canadians’ slowly eroding confidence in its regulatory authorities would only be further undermined. It is essential for anyone concerned with a healthy and competitive TV industry to take a look at these judgments and oppose Bell’s takeover of Astral. Only by staying vigilant and by denouncing Bell’s unacceptable practices by all possible means will we be able to prevent it from recreating the monopolistic model it relied on for so long,” concluded Mr. Péladeau.
Despite this rather inflammatory statement, Quebecor has not, as of July 25, filed a formal intervention with the CRTC about this case.
“Neither is anywhere close to an existing CTV station.”
Actually, Dawson Creek is already served by a CTV Edmonton repeater, so it might make more sense to turn CJDC into a CTV Two station.
Great post that serves as a reminder of what we really should be protesting: Bell’s purchase of Astral. As much as I don’t want TSN 990/690 to become RDS 690, that move is a symptom of a much bigger threat to local radio. If the CRTC doesn’t allow this purchase to go through, Montreal conceivably ends up with four strong English Radio voices: CBC Radio One, TSN 690, CJAD and the new AM 600.
Steve, do you know how many interventions have been filed concerning the proposed purchase? If so, can we read them online?
So far, I count 11 interventions filed for Bell’s purchase of Astral, versus 394 for the TSN language switch application. You can read all the interventions associated with this hearing here.
Steve, are the hearings on Sept. 10th, public, or only those wishing to be heard upon filing an intervention…if so, I would assume, the seating is limited, even though, the Palais is fairly large, and I hope they use a big room there..
If it’s public, does one have to reserve or just show up ealry, first come, first served..
But further to the CKGM thing, The argument that Bell used for the 690 thing and needing it to better serve the anglo population, this is the area that needs to be exploited…CRTC would lose face if they let it go to French, being made out to look like fools…and I just see them letting that happen..
I think they should just sell as a packaage CHOM and CKGM…rock and roll and sports baby, can go hand in hand..but I’m sure there are some people out there that would love to get into broadcasting and this could be a good way in..especially with the Habs poised to make a major resurgence..
The hearings are public, so anyone can attend. However, only those who represent the parties, or have filed an intervention and said they wish to present it at the hearing, will have the right to speak.
Previous Montreal hearings have happened in hotel conference rooms. I’m guessing they moved this to the Palais in anticipation of there being a larger audience. I imagine they’ll adapt if there’s a larger turnout. (Knowing how many intervenors will present at the hearings will also give it an idea how many seats it needs.)
There’s no reservations. Just show up and find a seat.
They’re not going to do that unless they have to. CHOM, at least, is a money-maker.
As I mentioned before, I think that the Bell purchase of Astral is just horrible. It causes the TSN languagee switch, it changes things in every market, and yes, it increases the market penetration for the Borg (umm, Bell, sorry). It takes another player out of the game, shuffles the cards, and it’s very likely that a any properties that get divested will just end up in the hands of one of the other major players.
There is no advantage in media concentration for anyone, not even the consumer.
Bell’s “tax” payments seem to be mostly self serving and silly – until you realize that they are nearly a monopoly in many areas, and it’s almost impossible for them to NOT be self serving. The right hand and the left hand are in the same pocket, it’s hard to tell them apart.
The implications in Montreal alone should be enough for the CRTC to say no, but clearly the CRTC is set on getting all of Canadian media to be owned by a handful of players, so they can stop with these silly public meetings and just get on with shuffling paper for a hundred thousand a year paycheck. It’s sad (and one of the many reasons I left Montreal and Canada).
On the other hand, it is free enterprise. I’m just sayin’…
Sorry to disagree with you, it’s not “FREE ENTERPRISE” it’s EMPIRE BUILDING, MONOPOLISTIC and clearly not healthy nor beneficial for anyone but shareholders, bankers and so on.
Would you consider it free enterprise if Bell suddenly took a horrible financial turn and had to shut everything down?
Oligopoly markets are not to the benefits of consumers or potential new entrants into the field. Concentration of a limited number of licenses into the hands of a very few companies is not in anyone best interesting. Free enterprise doesn’t really exist when you have a limited public resource (like the airwaves).
I also have thought about the implications of these gigantic conglomerates meeting either a major financial downturn or even a major scandal within the company, we would see the same reflections of what happened in the united states with lending to those who could not afford to borrow, sadly it could destroy an entire industry, it would be disastrous.
I just wanted to show you and Mr. Fagstein how these Empire builders think:
This was written by Corus Entertainment Legal Counsel and Regulatory affairs manager in June 2011, take a look below, it’s pathetic
The Corus BIG SIX Policy Proposals
ONE: Embrace the merits of fostering a Canadian-owned, but globally
• Recognize that we compete in a borderless world market in TV, radio and
new media, even at home.
• Recognize that the emergence and dominance of digital technology means
that all of our existing rules need to be re-examined.
• Don’t load up Canadian players with new rules and reporting obligations
as unregulated foreign players with much larger financial capacity
increasingly directly compete with us. In this regard we note subsection
5(2) (g) of the Broadcasting Act which requires that the regulatory system
be sensitive to the administrative burden placed on broadcasters.
• Align rules to global markets. For example, we recommend the relaxation
of the prohibition on advertising of pharmaceuticals. Canadians already
see a plethora of these messages on foreign services. Permitting this in
Canada would not only establish another revenue stream estimated at
$400 million but would provide the public policy benefit of making these
messages subject to Canadian law and industry standards.
• There is no need to change the foreign ownership rules for broadcasting
and content companies.
• Expand ambit of the Income Tax Act s. 19.1 to cover new media
TWO: Increase the probability of success of the Canadian media industry by
encouraging the creation of larger and stronger enterprises. The need for scale
trumps the diversity issue and Canada has a very competitive media
• Set aside the CRTC diversity of ownership policy.
• Expand the radio 2+2 limit for large markets and consider 3+1or complete
migration of AM to FM (4 +0) to allow heritage AM stations to migrate to
the FM band without penalty.
• Re-assess the Competition Bureau’s definitions of market in the context of
the digital interactive media paradigm.
• Eliminate the affiliate linkage carriage rules which simply serve to limit
our ability to launch new services that Canadians want to watch.
THREE: Develop a Canadian industrial strategy that supports the creation of
high quality Canadian content from all Canadian producers including
producers that are affiliated to Canadian broadcasters
• The Government of Canada and its agencies must adopt a digital strategy
for Canada. This strategy must not attempt to be all things for all people.
We need to focus our thinking and our efforts. Meanwhile a digital
strategy must include a content element.
• Establish a panel of experts to develop the digital policy framework in the
same manner as was done for the telecommunications sector.
• We should eliminate the artificial quotas requiring broadcasters to acquire
large percentages of their programming from independent producers. At
the very least Canada’s media companies should not face barriers to
creating and distributing the high quality Canadian Content that is
contemplated by the Broadcasting Act. We can create a viable production
industry and the beneficiaries will be Canadian viewers, writers and
performers, and the economy.
• Increase access to funding mechanisms for broadcasters who also
FOUR: Recognize that private media enterprise success is what will lead to a
stronger cultural system, not the current system of progressive fees, conditions
• Pass the Copyright Bill to allow for ephemeral recording without penalty.
• Direct that the tariff system be streamlined and establish tariffs based on a
• Avoid bans on advertising – food, kids, etc. – as these would have little
impact and would curtail our ability to provide service to young people
including our Healthy Active Living messaging.
• In TV, set aside conditions of licence other than Canadian Content and
• Encourage the CBC to maintain their local affiliation agreements. This
will ensure that the CBC stays close to its constituencies of local Canadian
• The Government of Canada is aware of the dedication of local stations to
community and charitable efforts across Canada. Broadcasters should be
able to deduct airtime donations as a charitable expense under the Income
FIVE: Allow Canadians to experiment
• Our investments in digital rights management technologies and their
implementation should be eligible for Canadian Programming Expense
• Our capital investments in towers and other digital broadcasting
technologies should be eligible for accelerated capital cost tax treatment as
well as government funding.
• Encourage the inclusion of FM receivers in mobile telephone units to
provide Canadian local radio in emergency situations.
SIX: Recognize that our small market requires that government continue its
support of research and development in intellectual property
• Preserve funding of CMF and Telefilm Canada.
• Increase production tax credits.
• Allow for investment tax credit in rights management semantics and
• Pay more attention to the “D” side of R&D.
• Establish training as an R&D priority.
Thanks for the extensive and interesting coverage. I am a long-time TSN 990 fan and am very disappointed about the station’s impending closure. I do think the best chance of reversing it is for the CRTC to grant an exemption to Bell, allowing it an additional frequency to open a French all-sports station. I’ve spent about a quarter-century of my professional life in English-speaking community advocacy in Quebec. I believe that the CRTC has obligations under Canada’s Official Languages Act, towards our community, and thus, should facilitate the continued operation of an English-language sports radio station in Quebec. With that in mind, I have filed the complaint, below, with Canada’s Commissioner of Official Languages. I’ve done so in my personal name only, and similarly, asked to appear at the CRTC hearing on Sept. 10th. I am sensitive to the likelihood that Bell Media is not necessarily preoccupied with saving TSN 990. That said, the Executive Assistant to Bell Media President Kevin Crull told me it remains Bell’s preference to be granted an additional frequency and to thus maintain TSN 990. It probably would be very important for supporters to be lobbying both the CRTC and Bell to make this happen.
Here is the complaint I filed:
July 11, 2012
Commissioner of Official Languages
Dear Mr. Fraser,
I write today as a private citizen to request of your office an enquiry into the refusal by the Canadian Radio and Television Commission (CRTC) to grant an exemption to provisions on media concentration to Bell Media Enterprises, which would have allowed it a new radio frequency for a French-language sports radio station in Montreal. My specific complaint, and my formal request for the Commissioner to initiate an enquiry as provided for under art. 56 (2) of the Official Languages Act is based on the fact that the consequence of this CRTC ruling will be the closing of the English-language radio station, TSN 990 and its replacement with a French station. Now, there are surely many related issues, including the unfortunate decision by Bell to close TSN 990. That said, the CRTC has a higher obligation any single corporation, no matter how large.
In my understanding that, this failure of the CRTC to grant an exemption to Bell Media Enterprises constitutes a contravention of the CRTC’s obligations with respect to the Official Languages Act, under Part VII, art. 41 (2) and its specific role in assuring the vitality and development of minority-language communities in Canada. I understand that it might well contravene other provisions but will not presume to carry out the investigation myself! TSN 990 is a dedicated and unique English-language radio service in Montreal, and its closing will leave our English-speaking community with no such service.
While I reiterate that this complaint is filed à titre personnel, I have spent about a quarter-century of my professional life in the public service of Quebec’s English-speaking communities. From that perspective – and additional ones as a huge sports fan and advocate of excellent radio – I believe that the CRTC ruling is truly damaging, and worthy of careful scrutiny by your office. I do think that such an enquiry might properly contribute to the reversal of this unfortunate decision.
It should be noted that the programming on Radio Station TSN 990 is fully available through non-traditional media sources, thus not limited its minority-language audience within its traditional frequency. The station is a source if interesting analysis, and features regular commentaries from well-known sports and community names. I think its regular and occasional listeners would agree with me that the station is increasingly part of the English-speaking tapestry of Quebec. Each such threat in that tapestry, in my view, is thus valuable and vital to the vitality and development of the minority-language community to which I am so proud to belong.
I trust that you will give this matter your every due attention. Should you or your office require any further information or elaboration on this complaint, it would be my pleasure to provide it.
Nicely written but, sadly, a waste of time.
He has no jurisdiction on the matter. And Graham Fraser doesn’t give two toots about Quebec anglos. He’s much more preoccupied with the state of French in places like downtown Calgary…
Also, what exception? No exception was requested.
Mr. Birnbaum, well I had to read this one a few times..as I couldn’t believe my eyes and what you’re asking Mr. Fraser to do and I agree with one comment that he doesn’t care about uebec Anglos…
so let me see, this purchase as it stands now sees Bell having two AM stations and two FM stations and the mighty Montreal’s One 2 Watch….all these powerful Anglo voices of Montreal. Has Bell bought the Gazette yet..?
So what you’re asking here is for Bell to be allowed to keep TSN 990 and be granted anadditional freuency…that can’t he happen right now, becasue the CRTC doesn’t grant frequencies if you haven’t applied for one…you’re asking to grant Kevin Crull’s wish list of preferences of keeping all four stations and adding a 5th for a French all-sports station..
I hope you haven’t been smoking anything weird..Or maybe you’re a shareholder..All Bell at this point is doing is an end-run around regulations by trying for a switch to French. If you recall they were given the go-ahead to supposedly go to 690 to better serve the Anglo market…Or was that a big lie..So you want Bell to get bigger..Unbelievable..
I don’t think it will happen, I wouldn’t be surprised if Bell decided to change their mind and backtrack and wanting to look like a nice guy by saying, ” We listened to the people, and we will leave the station alone.”
Maybe then sell it to some one or group that’s really committed to the Montreal Sports scene..Rogers won’t get it though for sure.. It would be a good fit for COGECO though. they don’t have and English AM station and they own the French rights for the sports teams..
Bell must not be allowed to get bigger. Mr Greenberg, if you want to sell Astral ,then look for someone else to buy.Period.
Did you go to Concordia journalism school in the early 80s? We might have been classmates. I’ll get your e-mail address from the CRTC intervention if you’re the same guy.
Steve: sorry to turn this into Craigslist.
Steve, how and where do we find the number of interventions for an appllication on the CRTC website and being able to read them….I can’t find anything.. I see stuff written by yourself and Pat Hickey about the number of interventions in the TSN/RDS file, so how does one find out.
Interventions associated with the September hearing are here on the CRTC’s website. There’s a count at the top. Selecting “Bell Media Canada Radio Partnership” gets the interventions related to TSN 990, and click on “related documents” below the names of each intervenor to read the actual documents.
As of now (July 25), the count is 585 related to TSN 990, and 116 related to the Astral Media acquisition.
Thanks for this info Steve. After I got the hang of it. I went around to the different different applications that are of the most interest to the anglo market at this hearing in September…
The TSN Radio thing interested me the most surprisingly..but what troubles me is the many intervenors are asking the CRTC for an exemption even though, as far as I know, Bell hasn’t asked for one. this bothers me that several folks are really asking to allow Bell to get bigger. A big mistake..
Maybe those are Bell Employees, who knows. But the real option would be to force Bell to sell it..Maybe COGECO would be interested seeing they only have one anglo station in THE BEAT, and they have the French broadcast rights anyways at CHMP…this would be a good addition, but it must be made clear if that were to happen that this would not be for an anglo traffic station…
The better option would be a completely new owner, a new voice to the anglo market..and someone to go after the Als’ as well..Now that would do it.
A lot of people have interpreted this as Bell being forced to shut down the station because the CRTC won’t offer an exemption. Therefore, in order to save the station, the CRTC needs to offer an exemption. There are, of course, other options, though the CRTC is limited in its power.