Gorilla media: CTVglobemedia and CanWest try to gobble up more stations
Should average citizens be concerned if the CRTC allows two large media takeovers?
Workers often feel anxiety when their company is taken over by a large corporation.
But few of them publicly register complaints, which is what makes Sally Poulsen's recent submission to Canada's broadcast regulator quite unusual.
On March 14, Poulsen contacted the Canadian Radio-television and Telecommunications Commission to express her "strong opposition" to the proposed sale of CHUM Limited to CTVglobemedia Inc.
Canada's Competition Bureau has already approved the $1.7-billion deal. The CRTC has scheduled an April 30 public hearing in Hull, Quebec, on CTVgm's application to take over most of CHUM's licences.
"Obviously, this sale would deal a crippling blow to television markets across the country, opening the door to massive layoffs and relocation of existing workplaces to larger centres," Poulsen claimed in her submission, which is posted on the CRTC website.
"While this does concern me—especially given that I am currently an employee of CHUM Limited, and a former employee of Craig Broadcasting—it is far from my greatest worry. I believe this sale would be detrimental to Canadian television viewers, severely limiting their choices in an already pared-down environment."
Poulsen's views have been echoed by a few other intervenors to the CRTC, including Thunder Bay resident Stephanie Reid, who formerly worked for CanWest Global.
"Competition is the breeding ground for excellence," Reid wrote in her submission. "What we are about to face is complacency. What happens if Globemedia does something that could be viewed as unfavourable? Will anyone report it? Will we ever find out?"
Under the Canadian Radio-television and Telecommunications Commission's policy, CTVglobemedia Inc. is required to provide public "benefits" in return for its proposed $1.7-billion takeover of CHUM's 33 radio stations, 12 television stations, and 21 specialty TV channels. However, those benefits won't be quite so high if CTVgm persuades the CRTC not to include the value of CHUM's $270-million debt in the purchase price.
Intervenor Robert Dall, a 30-year-old former news photographer who lives in Sechelt, also claimed that the CTVgm takeover of CHUM would have a devastating effect on television markets nationwide. In a subsequent phone interview with the Georgia Straight, Dall said he was worried that his friend Poulsen and other broadcasting employees would lose their jobs.
"I can totally see the Globe and Mail and CTV wanting to team up," Dall said. "You have a print source, you have a television source, you have an Internet source. I think that's where it should stop. Why are you wanting to own your competition?"
CTVgm executives, including president and CEO Ivan Fecan, chose not to comment, forcing the Straight to rely exclusively on their submissions to the CRTC. CTVgm has promised "separate and independent news management" of CHUM's Citytv stations, its CTV stations, any newspaper operations, and any newspaper operations controlled directly or indirectly by current shareholders.
CTVgm has claimed that the purchase of CHUM will yield an extra $19 million per year to the bottom line beginning in 2008. That includes $16 million in annual savings by eliminating duplication in administration and sales. Another $3 million in additional revenue would be generated through Citytv stations.
"Given that CTVglobemedia's principal competitor, CanWest, has two originating stations in each of the markets served by the Citytv Stations, there is no undue competitive advantage," CTVgm claimed to the CRTC. "Indeed, the acquisition of the Citytv Stations would allow CTVglobemedia to be on a more level structural playing field with CanWest in the Ontario, Vancouver/Victoria and Alberta television markets. For the past six years, CanWest has had two originating conventional television stations available in each of these markets, while CTV has been limited to just one."
CRTC won't look at media concentration
THURSDAY (APRIL 5) is the deadline for public submissions to the CRTC on CTVgm's application to take over CHUM's licences. That Thursday is also the day shareholders of Alliance Atlantis Communications Inc., which owns 13 specialty channels, including Showcase and HGTV, are expected to approve the sale of that company to AA Acquisition Corp., which is wholly owned by CanWest MediaWorks Inc. CanWest's partner is New York investment bank Goldman Sachs.
Meanwhile, last February, Astral Media Inc. issued a news release announcing it had "entered into exclusive negotiations to buy substantially all of the assets" of Standard Radio Inc., which owns 52 radio stations, including Z95.3 FM in Vancouver. CRTC spokesperson Denis Carmel told the Straight that CanWest and Astral have not yet filed applications with the broadcast regulator.
Carmel said the CRTC originally planned to examine concentration of ownership of television stations with the CTVgm application to buy CHUM. But on March 13, the CRTC announced that it will no longer do this. Carmel said the CRTC has decided instead to hold hearings in the fall on the issue of corporate concentration, which will have no effect on the three recent proposed takeovers.
He added that the CRTC has a policy of allowing media companies to own one station in one market, but exceptions have been granted on a case-by-case basis. "We don't believe it's appropriate to change the rules in midstream," Carmel said.
Peter Murdoch, vice president of media with the Communications, Energy & Paperworkers Union of Canada, told the Straight that he thinks it's "ludicrous" for the CRTC to process these huge deals without first looking at the issue of concentration of media ownership. He also noted that U.S. media companies are not allowed to own daily newspapers and television stations in the same market.
"This is not a small issue here," Murdoch said. "Whether it's foreign policy, health-care policy, environment policy, the messenger of the most critical issues in our country is becoming a messenger of one voice, whereas, as we know, the democratic process requires many. In order to have debate, you have to have varying opinion and lots of information. Without lots of information and without lots of opinion, you don't have any debate. And if you don't have any debate, you don't have any democracy."
Murdoch, whose union represents more than 20,000 media employees, said that CHUM laid off 270 workers and cancelled TV newscasts across Canada the same day that CTVglobemedia announced its takeover. "You can't abandon your obligation to provide information to Canadians that's important for a democratic society simply on the basis that it's not as profitable as running Canadian Idol," Murdoch said.
NDP MP and former magazine owner Charlie Angus, the critic for Canadian Heritage, described CRTC chair Konrad von Finckenstein's handling of the media takeovers as "outrageous" and a "joke". Angus criticized the CRTC for allowing only one month for written public comments on the CTVgm deal and then changing rules midway.
"The issue for Canadians is the CRTC has rubber-stamped approval after approval; that is setting the stage for a very, very narrow world of broadcast voices," Angus said.
Even though CTVgm has promised separate newsroom management, Angus claimed that no company will compete against itself. "I don't care what they promise," he said. "It's not how it works. So with a lack of competition, there will be a lack of voice."
He also claimed that CTV's voice in prime time is mostly the voice of Los Angeles. "We're already seeing networks that have very little interest in portraying Canadian stories and putting in Canadian programming during prime time," he said. "If they're gobbling up the competition, there is going to be even less incentive for them."
Ian Morrison, spokesperson for the nonprofit Friends of Canadian Broadcasting, told the Straight that there are three aspects to the CTVgm deal. Firstly, there is the purchase of CHUM's radio stations, which he thinks the CRTC will approve because no single company has a dominant position in this market.
The second part of the deal, he said, is CTVgm's purchase of Citytv stations and specialty channels. And the third aspect is the promise to sell A-Channel stations and other assets. "The word on the street is that not too many parties are interested in buying them because they're not that profitable," Morrison said.
He suggested that the CRTC could conclude that this deal threatens local television. Therefore, the regulator might order CTVgm to sell the more profitable Citytv stations and retain ownership of the less valuable A-Channels in smaller markets. This would create an opening for Rogers to buy the Citytv stations, he said, and then create a third privately owned English-language television network. Morrison outlined one other possibility: the CRTC ordering CTVgm to sell Citytv stations, with Toronto Star owner Torstar Corp. then picking them up.
"Anybody who thinks the CRTC is a pushover is probably wrong," Morrison claimed.
Friends of Canadian Broadcasting, the Canadian Film & Television Production Association, and the CEP hadn't submitted their interventions to the CRTC by the Straight's deadline. With regard to the CanWest deal for Alliance Atlantis, Morrison said that the biggest issue will likely revolve around CanWest's claim that it is keeping effective ownership and control in Canadian hands when 85 percent of the equity is coming from a New York merchant bank.
"That is sort of a challenge through the back door to the foreign-ownership rules," Morrison claimed.
Intervenors offer mixed views
Some of the intervenors didn't mince their words at all in their submissions to the CRTC about the CTV gm purchase of CHUM.
Alberta resident Larry Renforth described CTV as "a totally useless network that just relies on US networks for its shows".
Vancouver resident Lia Koutsodimos described the deal as a "national tragedy".
"This merger defies the logic of the Davie Committee, the Kent Commission and the Bryce Commission," Koutsodimos wrote. "This merger will forever damage the ability of Canadians to obtain a diversity of opinions through Canadian media and will stifle freedom of thought and freedom of the press."
Another Vancouver resident, Sam Bradd, called the deal "shameful".
"According to Reporters Without Borders, Canada ranks 18th in the world for a free press," Bradd wrote. "Further consolidation of media in corporate interests isn't going to help us pull ahead of Bolivia, Czech Republic, and other countries that out-rank Canada."
Many television producers and writers, on the other hand, lavished praise on CTVgm. Robert Duncan, president of Vancouver-based International Documentary Television Corp., stated that it is only through CTV that he has "experienced true and lasting support for the documentary process". He described the benefits package (see sidebar) as "simply another example of their conviction that it is possible in this country to make television matter".
In a phone interview, Duncan told the Straight that he has dealt with a lot of networks. "There are various standards of television executives in this country," he said. "Consistently, we've found CTV to be the best."
He said that for production companies, it's better to make more deals in a "one-stop shopping" approach, which could be possible as a result of the takeover of CHUM. "If I can sell them a show to their network and also pick up what we call 'second window'–which is a sale to a subsidiary network–if I can do that at the same time, it makes my life much easier," Duncan said.
Josh Freed, a documentary maker and columnist with the CanWest-owned Montreal Gazette, wrote in his submission that "CTV's dedication to making excellent Canadian documentary and other programming is now second to none in the country."
The executive producer and director of Corner Gas, David Storey, filed a submission describing CTVgm's proposed benefits as a "well thought out plan that will keep production rolling in a number of different genres over the next number of years".
Meanwhile, Drew Dennis of the Vancouver Out on Screen Film and Video Society stated that CTVgm "has a strong track record in its support of the development and production of Canadian programming" and has "a proven reputation for”¦ensuring a diversity of choice for consumers".
One Vancouver filmmaker, however, said he is troubled to see an increase in the level of corporate concentration in Canadian broadcasting.
Joel Bakan, a UBC law professor and writer and cocreator of the widely praised 2003 documentary The Corporation, told the Straight that he thinks the CTVgm buyout of CHUM will limit the diversity of voices.
He also said that The Corporation, which compared publicly traded companies to psychopaths, couldn't have been made in the United States, where filmmakers are more reliant on private funding.
Bakan noted that the public owns the airwaves and, therefore, has a strong interest in how they are used.
"This increasing concentration—increasing privatization, decreasing commitment to public broadcasting—is all pushing in the same direction," he said. "And that direction is homogeneity with the United States, less diversity, and fewer possibilities for Canadians to tell their own stories to themselves."
CTVgm has denied this will occur.
"At CTVglobemedia, we believe that uniqueness creates value, while homogenization destroys value," it stated to the CRTC. "We have a successful history in managing diverse brands and cultural enterprises by simplifying infrastructure and allowing the creative people to focus on creating content. The people of CTV and CHUM both share a palpable passion for Canadian programming. And it shows."
CTVgm is a private company owned by four shareholders: the Thomson-family-owned Woodbridge Company (40 percent), the Ontario Teachers' Pension Plan (25 percent), Torstar Corp. (20 percent), and BCE Inc. (15 percent). Torstar also owns 20 percent of B.C.–based Black Press (publisher of several Lower Mainland community papers) and 33 percent of Vancouver's Metro commuter paper. CanWest and Astral Media are publicly traded companies.
Bakan pointed out that directors of publicly traded broadcasting companies have only one legal obligation in corporate law: to create wealth for shareholders.
"We can impose other obligations upon them, and that's what the CRTC is about," he said. "I think the real difficulty is as these companies become larger and as there is less competition in the market, it becomes more difficult for government and for agencies like the CRTC to regulate them. So to the extent they become larger–to the extent there is less competition–the profit imperative becomes more compelling."
CTVgm agreed to pay the International Olympic Committee US$153 million for the exclusive Canadian rights to broadcast the 2010 and 2012 Games (London). Chris Shaw, spokesperson for a group called 2010 Watch, told the Straight that CTV and CBC (which also bid for the rights) have been the "worst" outlets for providing access to Olympic critics.
Shaw said that his group tried to explain that the Olympics are really about real-estate deals and selling television rights, but CTV and CBC kept returning the focus to "peaceful competition" between athletes.
"But whenever a scandal or whatever came up, they would cover it in a very cursory fashion," he claimed.
In 2000, veteran U.S. newsman Arthur E. Rowse described the effects of media concentration in a book called Drive-By Journalism: The Assault on Your Need to Know (Common Courage Press). He claimed corporations cut costs to satisfy Wall Street and keep stock prices high. He stated that this leads to an emphasis on "trivia and tragedy", something he called "newsamuse", as opposed to real news about government and other institutions.
Rowse also claimed that this "drive-by journalism" emphasizes "gotcha" stories and fosters the trashing of government, which serves the right-wing political interests of media owners.
He contrasted this with the research of University of Texas professor James S. Fishkin, who conducted experiments to determine what happens when a sample audience is exposed to politically balanced, in-depth information.
"The more people learned about political issues, the more they tended to switch from conservative to liberal positions," Rowse wrote. "For example, the proportion of people in favor of more education and training rose from 72 to 86 percent after discussion, while the proportion for a flat tax, like the one promoted by Steve Forbes, dropped from 44 to 30 percent.”
Here was what frightened conservative politicians: the clear evidence that more complete reporting and balanced commentary could turn political control of government leftward as well as boost citizen interest in public affairs."
Former CKVU owner isn't alarmed
Norm Klenman is a former television-station owner and used to be a Hollywood screenwriter. A self-described capitalist, Klenman cofounded Vancouver's CKVU in the mid 1970s along with Daryl Duke, who died last October.
Klenman told the Straight that during its heyday, CKVU broadcast 22 hours per week of locally produced television shows. That included the two-hour Vancouver Show each weekday evening, plus the half-hour Sports Page program at 11 p.m. each night.
"That and all the other local shows actually made money for us," Klenman said. "Not a lot, not as much as the American programming, but it was very, very good for the station."
In those days, CBC used to broadcast a regional current-affairs show called Pacific Report. BCTV, then owned by the Griffiths family, had about six local shows, Klenman recalled.
He claimed that he and Duke sold CKVU in 1989 after then–CRTC chair André Bureau oversaw the consolidation of television stations under large companies. Bureau, a member of the Canadian Association of Broadcasters Hall of Fame, is now chair of Astral Media, which wants to take over Standard Broadcasting's radio licences.
One of Astral's board members is Mila Mulroney, wife of former prime minister Brian Mulroney.
"The reason I speak openly about the CRTC is André Bureau said at a meeting I attended–at a meeting over other matters–that he favoured the big organizations with commission policy," Klenman recalled.
Klenman claimed that today the television industry "doesn't have a great concern for ethics" and "only exhibits political correctness because it's essential to business". He noted that the public's only vote is with its fingertips through the remote-control devices. "Television is getting of lesser and lesser importance to them," he suggested.
So is Klenman concerned anymore about concentration of ownership in Canada's broadcasting industry?
"It doesn't make any difference at all," he replied. "Nothing will change. The programs that you see—they all buy from the same source. In one or two or three years, the present programming will have died, most of it, and there will be new programming."
He said that the bulk of the media shares are controlled not by tycoons but by pension-fund managers investing the retirement savings of ordinary people.
"Who cares who owns anything?" Klenman asked. "It doesn't mean a thing."