CMPA raises diversity of voices question on Shaw-Canwest deal

The Canadian Media Production Association (CMPA) is calling on the CRTC to consider diversity of voices policy as it evaluates Shaw Communications Inc.’s application to purchase the broadcasting assets of Canwest Global Communications. The CMPA (formerly the Canadian Film and Television Production Association) wrote in a comment filed with the CRTC Monday that Shaw’s acquisition of the Canwest assets, when combined with the Shaw-controlled broadcasting services of Corus Entertainment, will put the company “very close” the CRTC’s diversity of voices threshold of 35 per cent audience share nationally. “The Commission should carefully examine the transaction with its Diversity of Voices policy in mind, based on the fact that Shaw’s control of audience share would be very close to the 35% level nationally,” the CMPA wrote in a comment filed for the CRTC proceeding. In its 2008 diversity of voices policy, the CRTC said it will “carefully examine” broadcasting transactions that result in one person controlling between 35 per cent and 45 per cent of the national television audience share. But in the policy statement, the commission said it would “expeditiously” process broadcasting transactions that result in one person controlling less than 35 per cent of the audience share. The question is whether the $2-billion transaction will put Shaw in reach of the 35 per cent threshold. The CMPA said it arrived at its national audience share number through an internal analysis of national BBM data from the 2008-2009 broadcast year. Although the CMPA said its Corus-Canwest audience numbers came “close” to 35 per cent, no one was available at the CMPA Tuesday to say what the actual number was during the period. In Western Canada, the CMPA said, the Canwest and Corus audience share amounted to more than 35 per cent. Although complete 2009-2010 broadcast year audience data is not yet available, the organization added that it expects the audience share numbers to rise over 2008-2009 given Corus’ acquisition and rebranding of SexTV and Drive-In Classics into W Movies and the Sundance Channel. The CMPA said in its comment that the transaction will result in Shaw and CTVGlobemedia controlling 55 per cent of the specialty and pay channels operating in Canada, for a total of 57 channels, and recommended that the commission require that the Global and Corus broadcasting assets “remain truly operationally separate, and fully competitive, with each other.” The commission could require the broadcast groups to operate two programming departments with separate broadcast executives, legal and business affairs departments, and decision-making powers, the CMPA wrote. Shaw has maintained that the Corus and Shaw broadcasting assets will be operated as distinct and separate companies. Corus’ specialty television assets include YTV, Treehouse, Nickelodeon, TELETOON, the W Network, Cosmopolitan TV, and the Sundance Channel, among others. It also owns a Western Canada pay TV service and nine multiplex channels, including HBO Canada. J.R. Shaw, father of Shaw CEO Jim Shaw, originally founded Corus, but Shaw spun it off as a publicly traded company in 1999. The Shaw family remains the controlling shareholder of Corus. “It’s about making sure that you don’t have one or two players controlling all the Canadian content that people get, including news and information programming. It’s about diversity,” Norm Bolen, president and CEO of the CMPA, said in an interview. The CMPA also expressed concerns similar to those of Telus, arguing that the Shaw-Canwest transaction creates the potential for anticompetitive behaviour arising from further media consolidation and the need to establish conditions and “safeguards.” The CMPA suggested that, as a condition of the commission’s approval of the transaction, it require Shaw, by condition of licence, to conclude trade agreements with the CMPA’s producers and establish the terms of their production relationship with the broadcaster. Bolen said broadcasters are using content on multiple channels and new media platforms without paying additional licence fees. He said producers are concerned that the transaction could effectively eliminate competition now taking place between Shaw’s broadcasting services and those of Canwest. “Will W really be fighting it out with HGTV and competing on licence fees to get the content they want?” Independent producers, Bolen said, will have fewer broadcasters to approach when seeking production agreements. “The more the industry becomes consolidated, generally, the fewer doors you have to knock on, the less competition there is for your content, and the more likely it is that the broadcasters are dictating terms to you that you have to take.” The CMPA's comment on the proposed transaction sets up diversity of voices as another potential issue to take a seat at a commission hearing scheduled for Sept. 20 in Calgary. Critics, including the CMPA, have also taken issue with Shaw’s proposed benefits package arising from the deal. Following the deadline for comments on Aug. 23, several submissions and letters were posted on the CRTC website Tuesday. In a letter of support for the transaction, Philip Lind, vice-chair of Rogers Communications Inc., wrote that the acquisition will increase the diversity of voices in Canada, stabilize the Global stations and “bring to an end the piecemeal sell-off of broadcasting assets and station closings that marked the period in late-2009, just before Canwest Global entered into creditor protection.” Lind wrote that Shaw’s new broadcasting assets will provide a Western Canadian “counter-balance to the voices of the CTV, CBC and CITY-TV television networks,” and “contribute to the diversity of voices and perspectives in the system, particularly through the reporting and presentation of news and public affairs programming—both nationally and locally.” Mayors, Members of Parliament and senators have also written to the commission in support of the deal, such as Newfoundland and Labrador Liberal MP Scott Simms and Alberta Premier Ed Stelmach. “This acquisition will promote competition in the domestic television market, ensuring a healthy, dynamic and competitive Canadian broadcasting system for the future, and provide much-needed stability for Canwest and its 1,700 full-time employees,” Stelmach wrote in a letter dated Aug. 18. sdoyle@thewirereport.ca

CMPA raises diversity of voices question on Shaw-Canwest deal

Broadcast | August 24, 2010

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