Megacorporation BCE has filled one of the holes in its vast media empire, announcing this morning it has reached an agreement to purchase Quebec’s French-language V network of television stations, along with its video platform noovo.ca.

The deal, whose financial terms were not disclosed (but will be when it gets to the CRTC), does not include V’s specialty channels, ELLE Fictions (formerly MusiquePlus) and MAX (formerly Musimax). That’s because those channels were originally sold to V by Bell as a condition of getting regulatory approval for Bell’s purchase of Astral Media in 2013.

Bell buying V has been one of those transactions that’s been rumoured for a long time. Bell doesn’t own a conventional television network in French, but it does own many French-language specialty channels. V, though it has undergone a renaissance since the Rémillard brothers bought it from Cogeco in 2008, is still a struggling network trying to find a way to make money going up against the Quebecor-powered TVA and taxpayer-funded Radio-Canada.

It’s far from certain Bell will convince the CRTC to approve the deal. Though the addition of the V network would not increase subscription revenues, which Quebecor has fiercely complained about, it would add significantly to Bell’s audience share, which is how the CRTC judges market dominance in television.

According to Numeris data, V has about a 7% share overall among Quebec francophones. TVA has a 24% share, and Bell’s CTV a 1% share. Quebecor’s specialty channels, which include TVA Sports, LCN, CASA and Yoopa, have a 13% share, and Bell’s specialty channels a 16% share.

Overall:

• Quebecor: 37%
• Bell: 17%
• V (not including specialty): 7%
• Bell + V after transaction: 24%

The CRTC is normally inclined to approve transactions when the combined market share is less than 35%, but I suspect they’ll take a closer look at this anyway.

Expect some serious opposition from Quebecor to this deal, and from CEO Pierre Karl Péladeau in particular.

A net good, or a net bad?

For opponents of vertical integration, this deal seems bad, putting yet another independent broadcaster in the hands of one of the big players. After the disappearance of Astral and Serdy as independent players in the Quebec French-language marketplace, consumer choice is getting more and more restricted.

But Bell’s big pockets could also revitalize V and make it a more formidable competitor to Quebecor’s TVA. Under Bell, V would presumably no longer get special treatment from the CRTC, meaning it would probably see an increase in its requirements for local news and would no longer be eligible for its $3 million share of the $22-million Independent Local News Fund, which would be reallocated to other independent stations like CHCH, NTV, CHEK, and affiliates owned by Pattison, Thunder Bay, Télé Inter-Rives and RNC Media. (The fund will be up for re-evaluation in 2021.)

It’s not clear if V would have survived without this transaction (or will if it’s denied). In Bell’s press release, Maxime Rémillard talks about needing to “ensure the continuity of this success”:

“After 10 years of ensuring V’s success as an independent conventional channel, I am proud to have found in Bell Media a partner to ensure the continuity of this success,” said Maxime Rémillard, President and Founder, Groupe V Média. “The industry in which we are evolving is constantly, deeply and rapidly changing. This was true when we took over the reins of TQS and allowed the network to survive; it is all the more true today. As it is increasingly difficult to ensure the sustainability of a conventional channel within a non-integrated group, I have made the best decision for the future of V. Bell Media will certainly allow V to continue to evolve and reach out to the Québec public on a massive scale.”

There’s also the question of what happens to the two specialty channels if this deal goes through. On one hand, being specialty-only might be good for the bottom line, because specialty channels generally make more than conventional ones. On the other hand, V loses its biggest marketing vehicle, and its specialty channels are hovering around the break-even point, according to CRTC data.

V owns the following five stations:

• CFJP-DT Montreal
• CFAP-DT Quebec City
• CFKM-DT Trois-Rivières
• CFKS-DT Sherbrooke
• CFRS-DT Saguenay

In addition, there are three affiliates of V owned by other companies that are not part of this transaction, but would benefit from changes in network programming and from re-allocation of the Independent Local News Fund:

RNC Media:

• CFGS-DT Gatineau
• CFVS-DT Val-d’Or

Télé Inter-Rives:

• CFTF-DT Rivière-du-Loup

The transaction requires CRTC approval, and likely that of the Competition Bureau, before it can close. Once the CRTC application is published, it will be open to public comment.

UPDATE: Try to contain your shock at the news that Quebecor doesn’t like this deal.

See also: Some analysis from the Globe and Mail’s Konrad Yakabuski.