Coverage at The Globe and Mail (of course, with analysis and more analysis), CBC, Reuters, Canadian Press, Wall Street Journal and Financial Post. Though financial terms won't be disclosed until after regulatory approval, Shaw is spending at least $65 million on this acquisition.

Canwest Limited Partnership, which owns the National Post, Montreal Gazette, Canada.com and other publishing assets, is unaffected by this. They will still be auctioned off as part of their restructuring.

Corus Cable Empire?

Assuming the deal goes through (and there's no big reason to believe it won't), the Shaw family will have control over a worryingly large number of specialty channels in Canada. They have a controlling interest in Corus Entertainment, a company spun off from Shaw to get around a CRTC rule about cable companies owning specialty services - a rule that no longer exists.

Corus owns or has a majority interest in (copy-pasted from Wikipedia):

• CMT Canada (90%)
• Cosmopolitan TV (67%)
• Drive-In Classics (rebranding to Sundance Channel on March 1, 2010)
• Dusk (51%, the rest owned by Canwest already)
• Nickelodeon
• SexTV: The Channel (rebranding to W Movies on March 1, 2010)
• SKY TG24 (50.5%)
• TLN (50.5%)
• tlñ en español (50.5%)
• Treehouse TV
• YTV
• Viva
• W Network

It also has a 50% share with Astral of the Teletoon channels.

Canwest owns - and Shaw would get:

• DejaView
• Fox Sports World Canada
• MovieTime
• Mystery TV - 50% and managing partner
• TVtropolis - 66.7% and managing partner

And the former Alliance Atlantis channels through a deal with Goldman Sachs:

• (Showcase) Action
• BBC Canada - 80% and managing partner
• BBC Kids - 80% and managing partner
• Discovery Health Canada - 80% and managing partner
• DIY Network - 68.1% and managing partner (Corus owns a minority stake in this channel)
• Food Network Canada - 57.58% and managing partner (Corus owns a minority stake in this channel)
• History Television
• HGTV Canada - 80.24% and managing partner
• IFC Canada
• National Geographic Channel Canada - 80% and managing partner
• Showcase
• Showcase Diva
• Slice

Add to all this minority stakes in mentv, One, Historia and Séries +, and you've got a pretty huge specialty empire here, 31 channels. That would put it ahead of CTVglobemedia's 29 channels, and way ahead of other specialty players Astral Media (9 plus The Movie Network and Super Écran), Quebecor Media (8) and Rogers (6).

It should go without saying that the specialty assets - and not the Global Television Network - are why Shaw is interested in this acquisition.

The release says that Shaw would operate Canwest as a standalone company (instead of, say, just taking its assets and giving them to Corus), but you have to think that some sort of consolidation is going to happen if they can get it past the CRTC.

Another (albeit minor) question is what happens to the few conventional TV stations that Shaw and Corus own. Shaw owns CJBN in Kenora, Ont. (a station with the distinction of being Canada's lowest-powered non-repeater, at 178 Watts), which is currently a CTV affiliate. Corus, meanwhile, owns CKWS Kingston and CHEX Peterborough in eastern Ontario, both of which carry CBC programming. None of the three stations are in cities with Global stations, so it's conceivable they could all become Global affiliates or even sold to Canwest and become Global owned and operated stations.

Shaw's second chance to prove its point

My favourite part of this story comes out of a quote from Canwest chairman Derek Burney (emphasis mine): “We look forward to benefitting from Shaw’s participation in a reinvigorated Canwest, as it is a strong business partner with a proven commitment to the Canadian television broadcasting industry. This significant investment in conventional television should be seen as a big vote of confidence in the industry and its future.”

Of course, Shaw and Canwest have been on the opposite side of the ugly fee-for-carriage debate, with each side spouting half-truths at each other in a bid to scumsuck public support.

Remember those "cable company cash cows"? Funny how useful one of them has suddenly become now that the TV company needs a bailout.

But as much as this is ironic for the Local TV Matters people, it also forces Shaw to prove its point about how conventional television isn't in need of financial support from cable and satellite companies.

Last year, after Shaw sarcastically offered to buy three stations from CTV for $1, and CTV sarcastically accepted, it later pulled away from the deal, claiming that due dilligence showed the stations were hollowed out shells and work had been outsourced to other stations.

Shaw can't make that excuse this time. While many Global stations are little more than a newsroom, a couple of editing suites and a green screen, Shaw gets the broadcast centres that control them, and can do with them as they wish.

So will Shaw back down from its tough talk about fee for carriage? Will Canwest pull out of the Local TV Matters group, stuck in the same awkward position as CityTV and TVA where the parent company cares more about protecting cable profits than local television?

We'll find out within the next few months. (Though by the time Shaw's acquisition is final, the fee for carriage debate might be over.)

UPDATE: The Financial Post explores a big thorn in the side of this deal: Goldman Sachs, which is still fighting with Canwest over the company that owns the former Alliance Atlantis channels.

Related Posts

• Global, CBC join CTV’s “Save Local TV” campaign
• CRTC okays CJNT, CHCH purchase
• CRTC Roundup: They saved local TV!
• Rogers et al pissed at CTV “Save Local Television” campaign
• Worthless stations sold sarcastically for $1 (UPDATE: NOT!)

Yeah, turns out it was a giant bluff. After going over the books for the three stations, Shaw determined that they are, indeed, losing quite a bit of money and it's not worth the CRTC brownie points and good PR to sink more cash into the stations. CTV issued a brief statement Tuesday afternoon saying Shaw reneged. Media outlets have repeated the statement, but Shaw and CTV aren't commenting further yet, and the stations can't comment because they don't know what's going on.

This comes (coincidentally?) on the same day Canwest announced it will offload two stations onto Channel Zero.

So CKX-TV in Brandon, Man., CHWI-TV in Wheatley (Windsor), Ont., and CKNX-TV in Wingham, Ont., go back to being endangered and unless another buyer can be lined up they won't last past the summer.

The optimism they had when the deal was announced now flies right out the window.

UPDATE: Canadian Press is the only outlet that finally tracks Shaw down to get comment. They say they expected real television stations but saw hollowed-out shells where much of the work was done in London and Toronto. Meanwhile, CTV says it will keep CHWI running for another year after getting more money from the CRTC.

Related Posts

• CRTC Roundup: They saved local TV!
• Worthless stations sold sarcastically for $1 (UPDATE: NOT!)
• Mixed news at small Global, CTV stations
• CTV to shut down two stations
• CKX, the TV station nobody wanted

One-sided ad from CTV Atlantic

If you haven't caught CTV's "Save Local Television" ads recently, you haven't been watching television. CTV has blanketed its stations, the A television network as well as specialty channels like the Comedy Network and Space with these advertisements that predict a doomsday scenario for local television and demonize the cable and satellite companies for "taking our programming" and "giving nothing in return" (as if this arrangement benefits solely the cable companies at the expense of local broadcasters, and as if the cable companies are selling DVDs of Corner Gas).

The cable and satellite companies have responded with a giant STFU, and issued a press release saying they're complaining to the CRTC that CTV is breaching the public trust with this one-sided campaign that is a "blatant violation of journalistic principles." (More coverage from CTV-owned Globe and Mail, Canwest/Global-owned Financial Post, CBC-owned CBC.ca and non-profit cooperative Canadian Press)

You see, not only is CTV running these ads all over the place, it's enlisting the help of its journalists to spread its message. Ridiculously one-sided news reports from CTV Atlantic, CTV Winnipeg, CTV Toronto and A Barrie simply throw journalism out the window. In all but the one case, no attempt whatsoever is made to get comment from cable and satellite companies. The exception, in the CTV Atlantic report, includes a 10-second clip in a two-and-a-half-minute report whose bias is evident when the reporter talks about broadcasters wanting "equal treatment".

CP24 (which is owned by CTV) has a fluff interview with CTV Executive Vice-President of Corporate Affairs Paul Sparkes in which he crosses the line from misleading to outright lie, saying cable and satellite companies are "taking our programs, repackaging them, selling them to the consumer, making a profit, and paying us nothing." Local television feeds are not "repackaged", but passed through directly to consumers. Sparkes also dismisses an actual question about fee for carriage lobbed at him from his reporter.

This report from Graham Richardson is a bit more balanced, in that he actually talked to a Rogers VP without systematically picking apart everything he says. It is the exception, unfortunately.

CTV Montreal enlisted the help of the premier, although Jean Charest doesn't specifically state that he supports a mandatory fee for carriage. (He also talks of how important local television is to his home town of Sherbrooke, even though it has no local anglo television station.)

Right of response

In response to the complaint, CTV issued a press release blasting Rogers as "underhanded" (at the same time arguing that discussions shouldn't happen via press release).

Its only comment about the attacks on its journalistic integrity came from this paragraph:

Indeed, consistent with CTV's efforts to provide balanced coverage of the issues surrounding the crisis in local television, CTV once again invites representatives from Rogers, Bell, TELUS, Cogeco, Eastlink and the CCSA to participate in tomorrow's nationwide events.

I can only assume this means CTV reporters will only talk to cable and satellite companies about this issue if they send a representative to CTV's political rallies on a Saturday to be heckled by a public that has only been told one side of an issue. That doesn't sound particularly "balanced" to me.

Despite this, Shaw once again called CTV's bluff, and Ken Stein, the senior vice president of corporate and regulatory affairs at Shaw Cable, agreed to an interview with CTV NewsNet's Jacqueline Milczarek. Milczarek argued with him (politely) for more than six minutes, a huge contrast from the softball questions given to CTV executives.

Stein also appeared opposite CTV's David Goldstein to debate the issue on an Alberta program, which went on for a respectable 14 minutes. Sadly, the debaters weren't as respectable, accusing the other of misleading people. In short, Shaw says it produces local programming through cable access channels, while CTV argues (correctly) that those channels are financed entirely out of a CRTC-mandated fund. CTV argues that Shaw et al are stealing their programming and pirating it to viewers, and incredulously accuses Shaw of using "scare tactics" in this campaign (you know, the one in which CTV is using a heart monitor metaphor to say local TV will "disappear forever" if fee for carriage isn't enacted).

The network also finally got some smart analysts on. Eamon Hoey looked at the larger picture, taking a dim view of fee for carriage, and got hounded by Milczarek. Carleton University's Christopher Waddell also pointed out how CTV isn't telling all sides of this story, and also got treated with skepticism.

Don't get me wrong, these interviews with Milczarek are what journalists are supposed to be doing: getting people to answer tough questions. But compared to the fluff interviews about open houses with CTV executives, it seems clear that CTV is using its journalists to advocate for a cause, being soft on their bosses and tough on their competition.

Breach of trust

CTV is grossly abusing its public trust by forcing its journalists to participate in what is essentially a political campaign. Television viewers have the right to be fully informed about all sides to this issue and CTV is systematically denying them that right.

Of course, the fact that local CTV stations are owned by a giant conglomerate that puts profit above everything else and is pretending to care about local television to manipulate the public is the problem in the first place, isn't it?

What's even sadder is that it takes another group of giant corporate conglomerates protecting their own bottom lines to bring this problem to light. If a solution was proposed that benefitted both private broadcasters and cable and satellite companies at the expense of television viewers, who would be there to look out for us?

I'm going to CTV Montreal's open house today. I'm pessimistic about their chances of convincing me to accept their corporate manifesto, but it's a good chance to explore the station.

Related Posts

• A dose of reality in the TV debate
• CTV owes its viewers an apology
• Battle of the fee-for-carriage misinformation campaigns
• Global, CBC join CTV’s “Save Local TV” campaign
• CRTC has decided: It’s time to pay for free TV

I feel bad for the people at three television stations: CKX-TV in Brandon, Man., CHWI-TV in Wheatley (Windsor), Ont., and CKNX-TV in Wingham, Ont.

The background

In February, CKX found out that owner CTVglobemedia was putting it up for sale. The station is actually a private CBC affiliate, running mainly CBC programming, but the CBC decided not to renew its affiliation agreement which sees the public broadcaster pay the station to air its programming. So CTV offered to sell the station to CBC for the nominal price of $1. CBC refused, because the cost of operating the station outweighs its potential for earnings or its usefulness. Without someone to take it over, the station would be shut down.

At CHWI and CKNX, both underperforming A-Channel stations in southern Ontario, it was the same deal. CTV would not renew their license, and the stations would be shut down when their current licenses expire in August.

Although I don't doubt that these stations were losing money, there was also a political reason for pulling the plug. CTV was about to step in front of the CRTC and ask for a third time that it require cable and satellite distributors to pay conventional broadcasters to carry their over-the-air signals. The argument is that the advertising model for conventional TV is broken, mainly because of the proliferation of specialty cable channels who get advertising and subscriber fees, and don't have to produce local programming.

Announcing that it would close these stations was a "See what you're doing?" move intended to be an example for what could happen across the network if the CRTC refused.

Similarly, Canwest Global (my employer) said it was looking at "exploring strategic options" for its secondary E! network, which includes Montreal's ethnic station CJNT. That's managementese for "they're up for sale," though it wasn't a firm commitment to sell or shut down.

The fact that these both involve secondary network stations, which tend to get second-rate U.S. programming, isn't a coincidence.

Some communities have taken it upon themselves to save their stations. In southwestern Ontario, rallies are planned to convince CTV to change its mind. In Hamilton, a "Save CHCH" campaign that would put the E! station in community hands.

Cable and satellite providers, meanwhile, aren't crazy about this fee-for-carriage idea. In a bid to get consumers on their side, they say they'd just pass the fees on to them instead of eating in to their record profits. They also argue that conventional television broadcasters are exaggerating their financial situation, which they argue will recover when the current recession ends.

Shaw's move

So on Thursday, CTV's Ivan Fecan was before the CRTC using these three stations as examples of how the conventional television model was broken, adding that it might reconsider closing CHWI-TV if additional money were to come through.

Shaw Communications (which owns a single television broadcasting station but more importantly a large cable company and the direct-to-home satellite network StarChoice) decided that it would try to shut CTV up by offering to buy the stations for $1 each.

As part of the move, Shaw bought a full-page ad in Friday's Globe and Mail to make its case:

Shaw ad in the Globe and Mail (May 1, 2009, Page A6)

It certainly doesn't mince words. Not only does it repeat the "hostage" and "ransom" metaphors, it bolds them.

Of course, the ad is misleading in two ways:

• This would not be a direct tax on consumers. It would be a direct tax on Shaw. It would be an indirect tax on consumers if Shaw chose to make it that way.
• Shaw's contribution to Canadian programming is not by choice. As a satellite provider, it's required to contribute to the Canadian Television Fund and to a community service.

CTV's response

The Globe interviewed Shaw (who said its offer was genuine), and CTV got wind of the plan somehow (either because the Globe asked it for comment, because Shaw let CTV know of the offer or because CTVglobemedia owns the Globe and the advertisement was shown to head office). So it immediately agreed to the sale, took out a half-page response ad facing Shaw's and hastily put this together:

CTV ad in the Globe and Mail (May 1, 2009, Page A7)

Well, OK. I guess that makes it official. Though both sides will have to sign contracts and get approval from the CRTC for the change in ownership.

In a press release issued at the same time, CTV CEO Ivan Fecan was similarly sarcastic:

"I think it's great. We've accepted their offer of $1 per station. Cable is rolling in money and can obviously afford to underwrite the losses. Good for them. I'm sure they will live up to the existing conditions of licence placed on these stations which is wonderful news for the employees and for the people of Windsor, Wingham and Brandon."

And that, ladies and gentlemen, is how three Canadian television stations were sold though sarcastic press releases and mean-spirited newspaper advertisements.

Shaw says the same offer is on the table for Canwest's five E! stations, including CJNT. But Canwest says Shaw hasn't talked to them directly.

A genuine offer?

So there is rejoicing in Windsor and Brandon (subscription link), though they're not quite sure what to think of it all.

After all, Shaw could have stepped up two months ago, but it didn't. Shaw has no interest in running TV stations. It just wants to embarrass CTV and Global and convince the CRTC not to approve fee-for-carriage.

Canadian Press analyzes the move, which it says could be a win-win if Shaw succeeds at creating a lean operation that draws a modest profit. The Globe and Mail's Derek DeCloet also suggests that this move is a transparently ungenuine one solely designed to ward off more expensive carriage fees.

Anything is better than a shutdown, and an acquisition by Shaw is a mild decentralization of broadcast television. So even though there will be inevitable layoffs, there is hope for these communities.

I just wish these stations, and the dozens of jobs they represent, weren't tossed around angrily like worthless pawns in a high-stakes game of media chess.

UPDATE: The Globe reports that neither CTV nor Canwest have received so much as a phone call from Shaw.

UPDATE (June 30): Two months later, CTV announces that Shaw will not, in fact, buy their stations. So it was all a giant bluff after all.

Related Posts

• CRTC Roundup: They saved local TV!
• Shaw renegs on promise to save TV stations
• Mixed news at small Global, CTV stations
• CTV to shut down two stations
• Shaw to buy Canwest