Shaw revises benefits package, offers free satellite to those affected by digital transition

As the CRTC’s hearings on Shaw Communications Inc.’s $2-billion acquisition of Canwest Global Communications Corp.’s broadcasting assets drew to an end Thursday, Shaw responded to critics with significant revisions to its tangible benefits package, adding $72 million to its previous submission. The CRTC requires major broadcasting transactions to include a tangible benefits package, or public benefits for the broadcasting system, which typically represent 10 per cent of the value of the deal. Shaw had originally submitted to the CRTC a benefits package worth $203 million that included $95 million in tangible benefits funds that Canwest had yet to pay as a result of its purchase of Alliance Atlantis Communications in 2007. Cultural groups such as the Writers Guild of Canada (WGC) and the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) said Shaw was applying for a discount on the value of the package because only $108 million in new benefits would be attached to the Canwest acquisition. Shaw’s revised benefits package, proposed Thursday, includes $180 million in new benefits plus the $95 million carried forward from the Alliance Atlantis purchase. “To further assist the commission and bring expeditious closure to this transaction, Shaw is providing a revised $180 million benefits proposal,” Shaw president Peter Bissonnette told the commission. “Given the size and nature of these benefits, we believe it would be in the best interest of the broadcasting system to extend these benefits over seven years, and we ask for your approval to do this.” But some critics said Thursday that the new benefits still do not go far enough. “That’s much better than what we started with, and for that we’re happy, but we still have a bunch of problems with the package because we still think it falls short of what the total amount should be,” Mario Mota, vice-president of broadcasting policy and regulatory affairs with the Canadian Media Production Association (CMPA), told The Wire Report. “We simply don’t accept the premise that there should be a discount on the assets that Shaw claims were in financial distress and needed to be rescued—mainly the over-the-air television business.” Shaw maintained Thursday that the “intangible benefits” of removing Canwest from creditor protection and keeping it in Canadian hands should be considered along with its direct tangible benefits. “The valuable benefit of removing all non-Canadian stakeholders should be taken into consideration in the application of the benefits policy,” Bissonnette told the commission. “Let there be no mistake, failure by Shaw to acquire 100 per cent Canadian ownership would have resulted in the breakup of the specialty and over-the-air services with a significant negative impact on the Canadian broadcasting system and all of its stakeholders.” The new benefits package includes $79 million for the development of scripted comedy and drama by independent producers, representing a $55 million increase over Shaw’s previous commitment. Shaw also adopted a recommendation from CRTC chair Konrad von Finckenstein to put forward $15 million to provide Shaw Direct satellite service to households that will be cut off from over-the-air television signals after the digital conversion deadline on Aug. 31, 2011. Under Shaw’s proposal, qualified households will get a free satellite receiver installed so that they can access, at no cost, the local, over-the-air channels they lose during the conversion. Households will have the option to subscribe to additional channels with Shaw once the service is installed. The commission supported the plan and offered help with any necessary study to determine which households should be eligible for the satellite subsidy program. “I want this program to succeed and I commend you for putting it forward,” von Finckenstein said during the hearing. Kelly Lynne Ashton, director of policy with the WGC, said $15 million could be excessive for a satellite subsidy program. Von Finckenstein said Tuesday that as many as 30,000 rural households could be left in the dark when they lose their analog television signals after the digital conversion, but the actual number could be lower. If the $15 million subsidy is used to provide all 30,000 homes with a satellite receiver, each home would receive a $500 subsidy. “If we can whittle down the free satellite dishes to what they actually need, and perhaps carve that into the independently produced programming, those are the sorts of things that would make us happier,” Ashton said in an interview. Mota said the new $79 million for independent productions still falls $25-million short of previous CRTC precedents, in which 85 per cent of the value of the benefits package went toward on-screen initiatives. “Shaw earns $25 million in revenue probably every second day,” Mota said. “To the production business … $25 million will probably result in about $75 million to $100 million in production activity because of the leverage factor.” Joanne Deer, ACTRA's director of public policy and communications, told The Wire Report that an extra $25 million for productions could be used to create two new Canadian television dramas. Interested parties have until Thursday Sept. 30 to submit reply comments to Shaw’s comments at the hearing. jmigneault@thewirereport.ca

Shaw revises benefits package, offers free satellite to those affected by digital transition

Broadcast | September 23, 2010

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