ARCHIVÉ - Transcription
Cette page Web a été archivée dans le Web
L’information dont il est indiqué qu’elle est archivée est fournie à des fins de référence, de recherche ou de tenue de documents. Elle n’est pas assujettie aux normes Web du gouvernement du Canada et elle n’a pas été modifiée ou mise à jour depuis son archivage. Pour obtenir cette information dans un autre format, veuillez communiquer avec nous.
Offrir un contenu dans les deux langues officielles
Prière de noter que la Loi sur les langues officielles exige que toutes publications gouvernementales soient disponibles dans les deux langues officielles.
Afin de rencontrer certaines des exigences de cette loi, les procès-verbaux du Conseil seront dorénavant bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience et la table des matières.
Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS
COMMISSION
TRANSCRIPTION
DES AUDIENCES DEVANT
LE
CONSEIL DE LA RADIODIFFUSION
ET
DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT/SUJET:
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 1st, 2007 Le
1er mai 2007
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur
les langues
officielles, les procès‑verbaux pour le
Conseil seront
bilingues en ce qui a trait à la page
couverture, la liste des
membres et du personnel du CRTC participant à
l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un
compte rendu
textuel des délibérations et, en tant que tel,
est enregistrée
et transcrite dans l'une ou l'autre des deux
langues
officielles, compte tenu de la langue utilisée
par le
participant à l'audience publique.
Canadian
Radio‑television and
Telecommunications
Commission
Conseil
de la radiodiffusion et des
télécommunications
canadiennes
Transcript
/ Transcription
VARIOUS
BROADCASTING APPLICATIONS /
PLUSIEURS
DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Konrad W. von Finckenstein Chairperson / Président
Rita Cugini Commissioner
/ Conseillère
Helen del Val Commissioner
/ Conseillère
Stuart Langford Commissioner
/ Conseiller
Elizabeth Duncan Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary
/ Secrétaire
HELD AT: TENUE
À:
Conference Centre Centre de conférences
Outaouais Room Salle
Outaouais
Portage IV Portage
IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 1st, 2007 Le
1er mai 2007
TABLE
DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE II
INTERVENTION BY / INTERVENTION PAR:
Suzette Couture 259 / 1590
Jack Rabinovich 261 / 1606
Jully Black 265 / 1627
Universal Music 270 / 1652
Plasma Management & Productions Inc. 274 / 1669
Corner Gas 304 / 1830
Epitome Pictures 313 / 1888
Patrick J. Hurley 348 / 2052
Communications, Energy and Paperworkers 365 / 2159
Union of Canada
Illusions Entertainment Corporation 389 / 2310
Canadian Broadcasting Corporation 416 / 2486
ACTRA 465 / 2815
Writers Guild of Canada 495 / 3010
Canadian Recording Industry Association 512 / 3097
Canadian Independant Record Production 526 / 3177
Association
Seneca College School of Communications Arts 536 / 3241
Manitoba Motion Picture Industry Association 549 / 3305
Canadian Film and Television Production 556 / 3347
Association
Alberta Motion Picture Industries Association 579 / 3454
Association of Canadian Advertisers 587 / 3504
Canadian Association of Film Distributors 595 / 3560
and Exporters
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Tuesday, May 1st, 2007 at 0905 /
L'audience débute le mardi 1er mai 2007 à 0905
LISTNUM 1 \l 1 \s 15811581 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 11582 Today is interventions day so we will be listening to the interventions. We will listen to you in groups and then we will have questions for you.
LISTNUM 1 \l 11583 If we do not have questions for any person in particular, it doesn't mean that we didn't listen to you or didn't appreciate your intervention, it just means your submission was clear and needs no further elucidation.
LISTNUM 1 \l 11584 Before we proceed, Madam Boulet, you have certain announcements?
LISTNUM 1 \l 11585 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 11586 Good morning, everyone.
LISTNUM 1 \l 11587 We will start by the first panel of five supporting intervenors. We have Ms Suzette Couture, Jack Rabinovitch, Jully Black, Universal Music and Plasma Management & Productions Inc.
LISTNUM 1 \l 11588 We will start with Ms Suzette Couture and you each have 10 minutes for a presentation.
LISTNUM 1 \l 11589 Please go ahead, Ms Couture.
INTERVENTION
LISTNUM 1 \l 11590 MS COUTURE: Good morning, Mr. Chairman, Commissioners.
LISTNUM 1 \l 11591 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 11592 MS COUTURE: Thank you for the opportunity to appear before you today in strong support of the CTVglobemedia's application to acquire CHUM Limited.
LISTNUM 1 \l 11593 My name is Suzette Couture and I am a screenwriter who lives and works in Canada. My first feature film "La Florida" won the Golden Reel Award for the highest grossing Canadian movie of the year; my miniseries "Jesus" for CBS in the United States was nominated for an Emmy; and my last movie, for CTV, "The Man Who Lost Himself" was the highest‑rated television movie of 2005.
LISTNUM 1 \l 11594 But enough about me. I strongly believe that the marriage of CTV and CHUM will bring more opportunities for high quality Canadian television. CTV's commitment to achieving the highest possible quality in everything they do to support Canadian television and their stated commitment to nurture CHUM's differences can only mean that some very exciting television will be coming to our screens.
LISTNUM 1 \l 11595 Bringing together CTV and CHUM will give them each greater strength in an entertainment world that is now almost borderless.
LISTNUM 1 \l 11596 Bringing them together will also allow for greater opportunities to foster emerging talent. Both companies have a dedication to developing emerging writers, directors and actors, and I believe this transaction will expand that capacity to nurture talent and showcase it on a larger scale.
LISTNUM 1 \l 11597 For that reason, I am also in full support of the proposed CHUM Writer Only Benefit. The BCE/CTV Writer Only Benefit provided emerging writers and experienced writers with an unparalleled opportunity. Writers must be moved by a story or an idea in order to fully pursue it with the kind of passion needed to write an exceptional script. Sometimes that idea or story is a producer's and sometimes it is the writer's own. The proposed Writer Only program is a rare opportunity for a writer to develop his or her own idea before involving a producer.
LISTNUM
1 \l 11598 This is what writer's dream of,
creative freedom in the early stages. This kind of authorship is what has
resulted in television history's finest programs.
LISTNUM
1 \l 11599 Providing
key support to feature films and committing to maintaining CHUM's past levels
of support for Canadian film is important for our industry as well. To that extent, I am really excited by the
drama funding included in the proposed benefits package for feature film, as
well as that provided for television drama.
LISTNUM
1 \l 11600 In
the end, all successful shows come down to the passion of the writer and
the words that she puts down the page.
It will always be critical to the success of our industry that writers
are allowed the freedom and the opportunities to create those stories, stories
which will find an audience here at home and around the world.
LISTNUM
1 \l 11601 I
have every confidence that the proposed acquisition of CHUM by CTV will enhance
that freedom and opportunity to create.
LISTNUM
1 \l 11602 I
thank you for this opportunity.
LISTNUM
1 \l 11603 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11604 THE
SECRETARY: Thank you.
LISTNUM
1 \l 11605 We
will continue with Mr. Jack Rabinovitch's presentation.
INTERVENTION
LISTNUM
1 \l 11606 MR.
RABINOVITCH: Good morning,
Mr. Chairman, Members of the Commission.
My name is Jack Rabinovitch and I am here to support the proposal
by CTVglobemedia to acquire effective control of CHUM Limited.
LISTNUM
1 \l 11607 The
reason for my support is quite simple, they have done an outstanding job of
supporting Canadian literature, Canadian authors and Canadian publishers.
LISTNUM
1 \l 11608 As
you may or may not know, I am the founder of the Giller Prize for Canadian
fiction. I set it up in 1994 with my
late friend Mordecai Richler to honour my wife Doris, who was a great lady and
a prominent woman of letters, and to support Canadian fiction. In 2005, Scotiabank became a partner and it
is called the Scotiabank Giller Prize.
LISTNUM
1 \l 11609 My
direct association with CTVglobemedia started in the summer of 2005. The CBC, which had previously televised the
Giller, had a strike and was in turmoil regarding their program planning. I therefore called Ivan Fecan and asked if he
could help, and here I quote him. He
said "Jack, I understand that the Canadian publishing industry is in
trouble and I would like to be part of the solution."
LISTNUM
1 \l 11610 He
offered the Giller Foundation a five‑year contract and told me to speak
to Susanne Boyce about making it happen.
And she did. CTV put their full
promotional communication and programming resources behind the Giller Prize.
LISTNUM
1 \l 11611 The
first year CTV aired the show was in 2005, and they did that in record
time. It was aired live on CTV Newsnet
and later on the main network. It was
cross‑promoted on TALK TV and a number of other CTV services and the
result in terms of viewership was outstanding.
LISTNUM
1 \l 11612 But
in 2006 CTV really pulled out all the stops.
They took a major risk and broadcast the Giller live in prime time on
CTV main channel. I repeat, prime time
from 9:00 to 10:00.
LISTNUM
1 \l 11613 The
show reached an unprecedented television audience of 550,000 people, an
astounding figure for a literary award shall and an unprecedented breakthrough
for Canadian literature and its authors.
LISTNUM
1 \l 11614 In
addition, CTV streamed a live feed of the show over CTV broadband network,
making it the first broadcaster in Canada to deliver a Canadian network awards
program live on broadband. CTV promoted
it daily on all its services, produced it and showcased it to the hilt.
LISTNUM
1 \l 11615 Just
as Ivan Fecan and Susanne Boyce had promised, CTV did a sensational job.
LISTNUM
1 \l 11616 That
broadcast and the promotion that preceded it was a major breakthrough for
Canadian literature. Because of
CTV's strong programming and promotion which brought the Giller Prize such a
great audience, book sales exploded for the Giller's nominees.
LISTNUM
1 \l 11617 Last
year's winner was a doctor named Vincent Lam who saw his book
"Bloodletting and Miraculous Cures" sail to the top of Canadian
bookseller list and it sold in excess of 200,000 copies, a first in Canadian
book sales.
LISTNUM
1 \l 11618 The
other short‑listed authors also benefited because they enjoyed a
major spike in their sales.
LISTNUM
1 \l 11619 I
tell you this story not just to laud what CTV has done for Canadian literature,
Canadian authors and the Canadian publishing industry, but to point to CTV's
commitment to Canadian culture.
LISTNUM
1 \l 11620 CTV
understands the importance of flagship events like the Giller Prize and
understands what their partnership can do for Canadian authors. Because of this commitment, I am confident
they will be great owners for CHUM, which itself plays an important role in
showcasing Canadian talent.
LISTNUM
1 \l 11621 I
think CHUM will flourish under CTV's leadership and I therefore ask the
Commission to support CTV's application.
LISTNUM
1 \l 11622 Thank
you.
LISTNUM
1 \l 11623 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11624 THE
SECRETARY: Thank you.
LISTNUM
1 \l 11625 We
will continue with the presentation of Jully Black.
LISTNUM
1 \l 11626 Thank
you.
INTERVENTION
LISTNUM
1 \l 11627 MS
BLACK: Good morning, Mr. Chairman and
Members of the Commission. I would like
to thank you personally for the opportunity to share my views on why I support
the transfer of the ownership and for giving me the opportunity to share my
perspective.
LISTNUM
1 \l 11628 My
name is Jully Black. I am a singer, I am
a songwriter, but first of all I am the youngest of nine children born to an
immigrant mother who came to this country with just a dream ‑‑
just a dream. As a songwriter in this
country I feel that we need to protect our borders and nurture and take care of
our wealth.
LISTNUM
1 \l 11629 Over
the course of my career I was fortunate enough to have the opportunity to tour
Canada many, many times, not only on my own but in support of the Black Eyed
Peas, who we all know are a huge American band.
LISTNUM
1 \l 11630 As
an artist, I can tell you that this transaction means more than a lot to the
music community in Canada. The
significant benefit dollars that will result from this transaction will enable
more artists like me ‑‑ and I say "like me" ‑‑
so you know that I am 29 years old and I am carving out a road and walking on
the road at the same time. I am willing
to take a blow to be a pioneer, to diversify the face of Canadian music. Without the benefit dollars, this is not
possible.
LISTNUM
1 \l 11631 The
development of my career has greatly been helped by FACTOR and Radio Starmaker
Fund and, like just about every emerging artist in Canada, I have had to rely
on these funds in order to pay for the high cost of recording, touring,
production, making music videos, et cetera.
If this funding did not exist, I don't know many Canadian artists or
record companies that would be able to break artists and build the profile
necessary to have a successful career in this country and abroad.
LISTNUM
1 \l 11632 FACTOR
and Starmaker will see their budgets increased greatly thanks to the
benefit packages proposed by CTV.
Without this benefit money, many, many voices would not be heard
and, to be quite honest, we run the risk of our industry becoming extinct.
LISTNUM
1 \l 11633 A
career in music is harder now than ever before, being illegal downloading,
theft of my music personally. I was
stolen from 2.5 million times by the sake of illegal downloading and many,
many others. Illegal downloading and theft
of my music, and many others, continues unabated, while the cost of recording and
touring increase.
LISTNUM
1 \l 11634 There
is a growing amount of competition out there, not just from other artists, but
also from other entertainment sources and we are all vying for the listener's
attention and dollars. If we as Canadian
musicians did not have FACTOR and Starmaker, we would easily drown in the
torrent of American and foreign content that floods across the borders. Again, we need to protect our borders.
LISTNUM
1 \l 11635 I
have seen firsthand how the power of airplay on radio and television, supported
by promotion and entertainment news coverage, can boost an artist's profile.
LISTNUM
1 \l 11636 At
this very moment I would like to take a moment to acknowledge the profile. My profile is bigger than my record sales,
and that's okay, because CTV had vision.
They picked this little girl from Jane and Finch and said "You have
talent. You don't have a journalist
degree, you don't have any degree as first television is concerned, but you
have talent. We trust you."
LISTNUM
1 \l 11637 And
Susanne Boyce, my hero, gave me a chance.
She gave me a chance. CHUM‑FM
was an early believer in Jully Black.
R&B ‑‑ I am a rhythm and blues singer, which is in
its infancy. There is no way that
at 29 years old I am the pioneer of an industry in this country that has been
around for eons, right, but CHUM‑FM ‑‑ and right now I
would like to shout out Rob Farina.
LISTNUM
1 \l 11638 Rob
Farina played a song that I wrote for my mother called "I Travelled",
because she came to this country and worked for $1.68 an hour and one by one by
one brought her children from Jamaica, so I could dream in 1977.
LISTNUM
1 \l 11639 In
2004 the release of my own CD, "This Is Me" ‑‑ 2005,
I'm sorry ‑‑ came out with Universal Music Canada, sake of the
support of CHUM‑FM. We need the resources. We need to feed the people. This is a business, right?
LISTNUM
1 \l 11640 Thanks
to the outlets such as eTalk Daily and CHUM radio stations, MuchMusic,
MuchMoreMusic, City News and Star, I now have a solid foundation and a high
enough profile to build my career, both home and abroad.
LISTNUM
1 \l 11641 When
I reflect back to the 13 years as a professional singer and songwriter, and
performer, I am most proud of gaining national recognition in my very own
country, because I don't feel that we should be exiled. We need to build our army here and be able to
compete globally as Canadian musicians.
LISTNUM
1 \l 11642 We
have the strongest and biggest exports, whether you are a singer/songwriter,
comedian, screenwriter, you name it. We
have David Foster, we have Shania, we have Celine, but they left in order to
come back and then their stock was raised.
We need to stop that. We need to
eliminate that.
LISTNUM
1 \l 11643 Music
has the ability to reach beyond borders and boundaries. It is the only language that every race,
culture, religion ‑‑ we all speak music and we need to
understand that it's an art form that is that the risk, again, of becoming
extinct.
LISTNUM
1 \l 11644 I
think the joining of these two complementary companies, television and
music ‑‑ a lot of times they don't understand each
other, but it is a husband‑and‑wife scenario. We could build a family. Husbands don't understand wives all the time,
we know that.
‑‑‑ Laughter
/ Rires
LISTNUM
1 \l 11645 MS
BLACK: Okay? But it's a marriage and I think that it is a
match made in heaven.
LISTNUM
1 \l 11646 CTV
has vision. It doesn't matter what these
budgets are saying. You could have
millions and millions of dollars, but if you don't know what to do with
it, it doesn't really matter. And CTV
and CHUM has vision and that is what we also need to acknowledge.
LISTNUM
1 \l 11647 CTV
is making a positive contribution to Canadians and for this reason I, Jully
Black, support this transaction.
LISTNUM
1 \l 11648 I
would like to thank you, the Commission, for granting me your time to share my
personal journey and I thank you.
LISTNUM
1 \l 11649 I
welcome any questions that you have.
LISTNUM
1 \l 11650 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11651 THE
SECRETARY: We will continue
with the presentation of Mr. Randy Lennox of Universal Music.
INTERVENTION
LISTNUM
1 \l 11652 MR.
LENNOX: To begin, I just
want to echo and congratulate you, Jully, for great words there.
LISTNUM
1 \l 11653 MS
BLACK: Thank you.
LISTNUM
1 \l 11654 MR.
LENNOX: Fantastic.
LISTNUM
1 \l 11655 Good
morning, Mr. Chairman and Commissioners, and thank you for the opportunity to
appear today in support of the application by CTVglobemedia to acquire CHUM
also.
LISTNUM
1 \l 11656 My
name is Randy Lennox and I am Canadian born and raised. I have worked my entire adult life in the
Canadian artist industry in a variety of different positions, and today I am
the CEO of Universal Music here in Canada.
We are Canada's leading record company releasing over 1,000 CDs both
digitally and physically per year, representing over 35 Canadian‑owned
labels and 140 Canadian artists. These
artists include such diverse artists as Paul Anka, Bruce Coburn, Shania Twain,
Diana Krall, Lorena McKinnon, and Nelly Furtado.
LISTNUM
1 \l 11657 I
am also the Vice‑Chairman of Canada's Walk of Fame which airs in
partnership with CTV. I am on the
Executive Board of the Canadian Association of Recording Arts and Sciences
which runs the Juno Awards each and every year in partnership with CTV, and I
am also on the Advisory Board of MusicCan, a charity program that puts musical
instruments in much‑needed school programs across Canada; again, a
charity that CTV is very much involved with.
LISTNUM
1 \l 11658 However,
I am here first and foremost as the CEO of Universal Music Canada and we
wholeheartedly support this application.
LISTNUM
1 \l 11659 It
is my firsthand experience over a period of several years that CTV shares our
passion and commitment for Canadian artists and for music in general. Their focus on artist development, both
spiritually and financially illuminate this point, whether it's our industry's
partnership on those Juno awards which helps raise industry sales 40 percent
each and every week after it airs each year; the Canadian Idol phenomenon which
finds and develops brand new Canadian superstars or their everyday music
commitment of media time through eTalk Daily.
It is clear to me that music, particularly Canadian music, is CTV's
priority.
LISTNUM
1 \l 11660 And
like Universal Music, CTV recognizes that we compete every day with American
content given our proximity to the United States. Their idea to take the Juno
Awards not only nationwide but worldwide shows a like‑minded ambition
with the music industry to raise our Canadian artists' awareness not only here
at home but around the world through their media efforts.
LISTNUM
1 \l 11661 And
CTVglobemedia's leadership and track record to music makes them the ideal
custodian for CHUM; CHUM who by the way is another culture whose stations and
brands are very focused in the music space and partnership with our
industry. Incredible brands such as
MuchMusic, the NewMusic, have seen Canadian artists nurtured and celebrated for
decades now.
LISTNUM
1 \l 11662 The
development of VideoFACT, a funding organization invented and managed by the
CHUM group to help Canadian artists make and develop videos here at home. And this has helped us at home and developed,
as Jully said, artists for the world.
LISTNUM
1 \l 11663 So
I am heartened by CTV's commitment to maintain the unique culture that the CHUM
television and radio properties represent.
On the radio side we are also pleased as an industry to see that CTV and
CHUM are both committed to the continuing dialogue towards the establishment of
industry benchmarks for airplay and promotion of our new and emerging
artists. We look forward to continuing
work with CTV and CHUM towards this common objective.
LISTNUM
1 \l 11664 Out
of necessity, the music industry in Canada and around the world has seen much
consolidation. In fact, Universal Canada
is the product of two merged organizations ourselves and in the seven years
since we began as one merged company our Canadian artists' commitment has
helped us gain an additional 25 percent market share in growth during difficult
times. This has kept us at a market
leadership position while always being focused on offering a wide array and
variety of choices for the Canadian music‑buying public. We spend our time on diverse artist
development and Canadians benefit.
LISTNUM
1 \l 11665 So
I believe that both CTV and CHUM will continue to act in the spirit of this
artist development because Universal is proof that it is not size that matters
in business as much as what you do with that size.
LISTNUM
1 \l 11666 CTV's
priority and emphasis and the commitment to maintain CHUM's culture will
benefit Canadians and, again, we support wholeheartedly this merger of two
great Canadian companies.
LISTNUM
1 \l 11667 THE
SECRETARY: Thank you, Mr. Lennox.
LISTNUM
1 \l 11668 We
will continue with the presentation of Mr. Farley Flex from the Plasma
Management & Productions Inc.
INTERVENTION
LISTNUM
1 \l 11669 MR.
FLEX: Good morning, and thank you,
Chairman and Commissioners.
LISTNUM
1 \l 11670 I
appreciate the opportunity to appear here today. I am here to speak in support of the
application of CTVglobemedia to acquire CHUM Limited.
LISTNUM
1 \l 11671 My
name, as mentioned, is Farley Flex and I am a Canadian music business
entrepreneur. For the past 20 years I
have built a multifaceted career in the Canadian music industry as a producer,
manager, radio station music director, DJ, entrepreneur and probably my most‑known
role as a judge on Canadian Idol. But I
am here today first and foremost as an artist manager working primarily in the
urban music industry.
LISTNUM
1 \l 11672 I
support this application for the following three reasons:
LISTNUM
1 \l 11673 CTV
is the ideal candidate to preserve the unique contributions and nature of the
CHUM services.
LISTNUM
1 \l 11674 Secondly,
this transaction will increase the diversity of choice to Canadians.
LISTNUM
1 \l 11675 And,
lastly, the $42 million in benefits that will flow to the Canadian music
industry.
LISTNUM
1 \l 11676 Allow
me to elaborate. I believe CTV is an
ideal candidate to preserve the unique contributions and nature of the CHUM
services. Each of these companies has
played a distinct role in fostering Canadian music talent and I believe that
this will continue under the new ownership structure. CTV have shown themselves to be true
champions of Canadian culture and talent.
Their track record with Corner Gas, Canadian Idol, the Junos and eTalk
Daily is impressive to say the least.
LISTNUM
1 \l 11677 CTV's
commitment, not just to make Canadian programming but to make successful widely‑viewed
Canadian programming is unquestionable and has been proven over and over again.
LISTNUM
1 \l 11678 I
also believe in the importance of having a 100 percent‑owned Canadian
broadcasting company nurturing those CHUM stations. CTV realizes that it takes special care,
patience and financial investment to create Canadian hits and Canadian
stars. This builds success not just for
CTV but for the artists in those shows.
LISTNUM
1 \l 11679 A
strong company with substantial financial resources is also important in the
fight to keep Canadian voices heard above the increasing noise of foreign and
unregulated sources coming into Canada.
Those financial resources are also necessary when it comes to building
Canadian artists up to a level where they can thrive on the global stage,
something that is important for the artists' artistic and financial development
and to bring our Canadian culture to the rest of the world.
LISTNUM
1 \l 11680 I
also support this application because I believe it will increase the diversity
of voices in the broadcasting system. We
saw this happen in radio when the Commission changed its policy to allow an
operator to own two FM and two AM stations in each market. The Commission understood that this was no
threat to the amount of choice available to listeners but a means to ensure
more choice. This has been proven in
market after market. In Vancouver, for
example, CHUM owns four stations each with a distinct format and unique target
audience. It is simply good business.
LISTNUM
1 \l 11681 Lastly,
I would like to speak about the proposed benefits package. CTVglobemedia support for FACTOR and
Starmaker is vital to the health of the music industry. I welcome and applaud the $42 million in
additional funding and music‑related projects. It will make a tangible positive difference
to the Canadian music industry.
LISTNUM
1 \l 11682 Thank
you and I am ready to take any questions you might have.
LISTNUM
1 \l 11683 THE
CHAIRPERSON: Thank you very much. Thank you for all your testimonials. You obviously believe very strongly in CTV
and what it can do for CHUM.
LISTNUM
1 \l 11684 Now,
I assume you were yesterday in the audience or else you read the papers, so you
know that this is a problematic application for us because it doesn't really
fit within our rules and we made that perfectly clear yesterday.
LISTNUM
1 \l 11685 Mr.
Fecan made it quite clear that Citytv will be sold. It is a very valuable item. If he doesn't buy it or we don't allow him to
buy it, somebody else will buy it. So
really, the key question for us and you have sort of ‑‑ not
really addressed and I would like to put a point to it, what would be the best
difference if Rogers, let's say for argument, bought City rather than CTV? You all made the case for strong Canadian
artists, funding, industry, champion somebody who pushes you, et cetera, but I
am not ‑‑ I would like to see your views as to why this
champion whom you obviously think very highly of, will be superior to whomever
other players there may be in the Canadian industry.
LISTNUM
1 \l 11686 I
am just mentioning Rogers as a name that comes to mind because they are buying
the A‑Channel, but if you could address that to us that would be very
useful. So whoever wants to take it on?
LISTNUM
1 \l 11687 MR.
FLEX: I will begin with that.
LISTNUM
1 \l 11688 You
know, I think that when I can look at CTV acquiring CHUM and maintaining the
unique culture of CHUM versus anyone else, two things come to mind, experience
and leadership. You know, in dealing
with CTV everyday they are completely invested spiritually and financially in
the space. They understand it better
than anyone, and the leadership of the organization as has been suggested this
morning, the competency and vision is second to none.
LISTNUM
1 \l 11689 So
if you were to line up four or five companies that could all have the
wherewithal to buy CHUM, CTV would still come out ahead just because they will
maximize value for the Canadian consumer and they will keep their word. And I was here yesterday and heard every word
that was said. They will keep their word
as to what they will do in terms of the zero overlap and the cultural
sovereignty of both of these networks of radio and television stations. So I think that's a very important thing for
them to sustain and they will do it.
LISTNUM
1 \l 11690 And
I am not suggesting Rogers wouldn't but I am saying that CTV is very qualified
to do so because they have lived in this space all of their lives with respect
to these other multimedia companies who have not.
LISTNUM
1 \l 11691 THE
CHAIRPERSON: Okay, thank you.
LISTNUM
1 \l 11692 Ms
Black.
LISTNUM
1 \l 11693 MS
BLACK: Personally, you are not going to
go to a dentist that has no teeth, you know.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11694 MS
BLACK: So let's be honest, right? And I think ‑‑ you see, I
just ‑‑ let's just be real.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11695 COMMISSIONER
LANGFORD: You want to come and sit up
here, I think.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11696 COMMISSIONER
LANGFORD: We are ready for ‑‑
I can't match that. I am ready to retire
now, you know.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11697 MS
BLACK: But on a serious note, I mean,
CTV has number one, vision; number two, the cool factor. Yesterday, I sat here and I listened to
people speak about why not we be ‑‑ why don't we be safe and
appeal to the older audience, the buying audience? Well, they are going to die, okay.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11698 MS
BLACK: And the reality is that the
younger generation ‑‑ that CTV is setting up without even
realizing an apprentice system. They are
passing the baton onto the next generation.
LISTNUM
1 \l 11699 And
no disrespect to Rogers or anybody else, but if they were to get ‑‑
if they were to acquire CHUM they are going to have to hire everybody from CTV
anyway. So you know it's like Tommy
Hilfiger doesn't make his own clothes.
He hires the people to do it. CTV
knows what they are doing. They have
teeth in their mouth.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11700 MS
BLACK: That's the reality. So you can't beat experience and a company
that is willing to make ‑‑ to take a high risk situation and
deal with the circumstance. They are
okay with whatever the outcome is.
LISTNUM
1 \l 11701 Change
is growth. That's why CTV should acquire
CHUM.
LISTNUM
1 \l 11702 COMMISSIONER
LANGFORD: Okay.
LISTNUM
1 \l 11703 MR.
FLEX: My good friend Jully Black.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11704 MR.
FLEX: I have proposed to this woman
about 40 times, just so you guys know.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11705 COMMISSIONER
LANGFORD: Even after you heard her views
on husbands and wives you still proposed?
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11706 MR.
FLEX: Even ‑‑
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11707 COMMISSIONER
LANGFORD: You are a brave man.
LISTNUM
1 \l 11708 MR.
FLEX: Even after that, even after that.
LISTNUM
1 \l 11709 COMMISSIONER
LANGFORD: Yes, you keep lifting those
weights.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11710 MR.
FLEX: That's the whole idea.
LISTNUM
1 \l 11711 COMMISSIONER
LANGFORD: You are going to need it.
LISTNUM
1 \l 11712 MR.
FLEX: That's the whole idea.
LISTNUM
1 \l 11713 MS
BLACK: Or his chequebook. He could lift the chequebook.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11714 MR.
FLEX: What I wanted to emphasize, and I
mentioned it actually on my way here this morning is that, you know, growing up
as a black person in this country, CHUM has been the flagship station in terms
of ethnic diversity. When you grow up in
the city of Toronto and there is no question that Citytv was the first media
entity to truly reflect the diversity of Toronto and we all know how great the
diversity of Toronto is.
LISTNUM
1 \l 11715 And
to be enhanced by the "deep pockets" of CTV, I think, is an important
point as well because with the spirit of the CHUM group being held intact and
the vision that they have had over the years in terms of representing the
cultures and the great diversity and all of the different aspects of colour
that they show on that TV screen, I think it is really important to emphasize
that having an enhanced opportunity to do that will just enhance what it
already is, which is a respectful and I guess you could say inclusive and fully
open door system.
LISTNUM
1 \l 11716 Like
my career was built an opportunity for an artist that I managed named Maestro
Fresh Wes to walk into Electric Circus and get a record deal walking out the
door on Queen Street. That's literally
what happened, right, and my opportunity now as a judge on Canadian Idol.
LISTNUM
1 \l 11717 I
do a tremendous amount of community work and for me to go into communities,
aboriginal, you name it, all the marginalized communities across this country
and have young people be willing to listen to what I have to say because they
think that someone special is coming to see them, right, and then I can impart
on them the other aspects of my life and the work that I do to uplift them;
these are all opportunities that are enhanced indirectly and directly through
my association with both entities. So
you know it's a no brainer for me in so many respects because I see it happen
every single day.
LISTNUM
1 \l 11718 I
received a phenomenal award on Saturday evening for an organization called
"The Black Business and Professional Association" and the award was
in arts, media and entertainment and it was for community service and my
professional work, and all of that is built on the foundation of an opportunity
that began with CHUM, right, and then now is flourishing with CTV. So that is why I am here.
LISTNUM
1 \l 11719 Thank
you.
LISTNUM
1 \l 11720 THE
CHAIRPERSON: Mr. Rabinovitch.
LISTNUM
1 \l 11721 MR.
RABINOVITCH: Yesterday, as I was
listening I heard a lot of discussion about expectation and commitment and I
think that the five first intervenors here have demonstrated, I think very
clearly, that forget commitment, forget expectation; CTV has demonstrated
support and endorsement of Canadian artists and literature and in music.
LISTNUM
1 \l 11722 THE
CHAIRPERSON: I was fascinated by your
little story about the Giller prize. I
mean, I would have thought that this was something that you know was ready‑made
for CBC and, yet, you had to go to CTV to get the exposure. What is the difference in attitude between
CBC and CTV here that led to ‑‑ how would you analyse it?
LISTNUM
1 \l 11723 MR.
RABINOVITCH: I think that they were in
turmoil, as I said. The strike sort of
fouled up their program planning and they didn't know exactly what to do, and
the strange part about it is that the young group that Susanne Boyce put
together had many booklovers in it, and when you see kids between the ages of
18 and 25 reading books and passionate about books it's quite a wonderful
experience.
LISTNUM
1 \l 11724 THE
CHAIRPERSON: Go ahead.
LISTNUM
1 \l 11725 MS
COUTURE: Oh, just lastly I would like to
say that CTV gets it. They understand
the audience, they understand story.
LISTNUM
1 \l 11726 I
mean, for a writer the worst thing to do is to write a script and put so much
of yourself into it and actually come up with what you think is a very
compelling script that will attract audiences and then the execution of it and
the promotion of it falls so far short that your efforts are ‑‑
you know, they vanish and the audience isn't there. And Jully said it, you know, it doesn't how
much money is in the budget. It's how
you use that money and who is making it happen.
LISTNUM
1 \l 11727 I
think that my experience with CTV, one of the reasons I have remained in Canada
even though I continue to work in the U.S., is because they get it. They understand the audience. They promote things beautifully and they are
not just doing Canadian programming because they have to. They actually treat it as, you know, a great
value for the audience. I just can't
imagine who else would do a better job.
LISTNUM
1 \l 11728 THE
CHAIRPERSON: Okay, thank you.
LISTNUM
1 \l 11729 Commissioners,
any questions?
LISTNUM
1 \l 11730 Helen.
LISTNUM
1 \l 11731 COMMISSIONER
DEL VAL: Just one question, just one
question for the writers, Ms Couture and Mr. Rabinovitch.
LISTNUM
1 \l 11732 Now,
I don't know whether you had a chance to take a look at the intervention of
Illusions Entertainment Corporation where they criticize the writers‑only
initiative and they said that ‑‑ this is what they said:
"CTV's writers‑only
development program undermines the role of the independent producers and the
creative process and it may be a more accurate statement of how CTV views the
producer's role when they state writers can fully realize their creative vision
before the script is assigned to an independent producer." (As read)
LISTNUM
1 \l 11733 Do
you care to comment?
LISTNUM
1 \l 11734 MR.
RABINOVITCH: I would have to read
it. I have no comment at this moment.
LISTNUM
1 \l 11735 MS
COUTURE: I would like to comment. I mean, I am both a writer and a producer so
I am sort of in an amusing position of either supporting myself or not
supporting the other side of myself.
LISTNUM
1 \l 11736 I
think that it's a fear and a concern that I really think is a problem for
certain producers who perhaps don't work as much with writers as they would
like because there is no problem with the producer getting a script that is
already written. In fact, as a producer
I would welcome that because you see the intentions of the writer. It's all there. And I think that to get a script from a
writer means that you don't have to do all of the development work that a
producer needs to do to raise the money to work with the writer.
LISTNUM
1 \l 11737 So
I think that it's actually the opposite, I would say, for the independent
producers. They should welcome getting
specs ‑‑ what we call spec scripts that have been developed by
CTV. In fact, CTV has done that with my
company and it was a terrific experience.
LISTNUM
1 \l 11738 On
the other hand, I think for writers the fact that they have the opportunity to
write for themselves before all of the other voices come in to say not this,
not that, that's what writers in Canada particularly support.
LISTNUM
1 \l 11739 COMMISSIONER
DEL VAL: Great, thank you. So you don't necessarily agree with their
conclusion that that's ‑‑
LISTNUM
1 \l 11740 MS
COUTURE: I think they are looking at it
negatively when they should look at it positively, and I would like to talk to
each and everyone of them to explain that to them. So they can call me at home.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11741 COMMISSIONER
DEL VAL: Thank you very much.
LISTNUM
1 \l 11742 THE
CHAIRPERSON: Rita, do you have any
questions?
LISTNUM
1 \l 11743 COMMISSIONER
CUGINI: Further to that, Ms Couture, you
have had projects that were funded out of the BCE‑CTV benefits?
LISTNUM
1 \l 11744 MS
COUTURE: Yes, I have.
LISTNUM
1 \l 11745 COMMISSIONER
CUGINI: And yesterday they told us that
one of the huge advantages of a self‑administered fund, as they have
proposed, is that it is one stop shopping.
In other words, the producer doesn't have to go look for additional
funding, that they can go to this pool of money and it's all there for them. Was that your experience?
LISTNUM
1 \l 11746 MS
COUTURE: I think the big advantage with
it already being at CTV is that you are in the door. The biggest thing is to get a broadcaster to
be excited by the project, to be in at the birth of the project and then they
have a vested interest in following it through to the end.
LISTNUM
1 \l 11747 So
I think to have it be in an outside funded group and to then go to CTV, I think
that is not the advantage that writers are looking for, and I don't think
producers have that advantage if it's from an outside group.
LISTNUM
1 \l 11748 COMMISSIONER
CUGINI: Thank you.
LISTNUM
1 \l 11749 Mr. Lennox,
just one more question for you.
LISTNUM
1 \l 11750 In
your written submission you said that you supported the CRIA submission,
especially as it related to new and emerging artists and you did just say that
you were here yesterday. I'm just
wondering if you could comment on the initiative undertaken by the CHUM Radio
Station Group to support and promote new and emerging artists and if that is in
keeping with your support of the CRIA submission.
LISTNUM
1 \l 11751 MR.
LENNOX: Yes. I think from the moment that submission was
written to this moment things have evolved in an extremely positive
fashion. I think there has been
additional growing empathy between CHUM and the music industry in terms of
understanding that our artists' recording costs have exponentially increased,
so therefore our reliance and need of true partnership at the early stage of
the artist development is much more illuminated than it was even 6 or 12 months
ago.
LISTNUM
1 \l 11752 So
in those ensuing weeks that has evolved, and even know we don't have a perfect
template yet as to how that will be framed in terms of criteria, the great
news is that the will is there. The will
is there from CTV, CHUM and the music industry to now, you know, build a
framework for a new and developing artist program.
LISTNUM
1 \l 11753 So
I feel very good about it.
LISTNUM
1 \l 11754 COMMISSIONER
CUGINI: Thank you.
LISTNUM
1 \l 11755 Thank
you, Mr. Chairman.
LISTNUM
1 \l 11756 THE
CHAIRPERSON: Any other questions?
LISTNUM
1 \l 11757 Thank
you very much, then.
LISTNUM
1 \l 11758 We
will take a five‑minute break while the next panel sets itself up.
‑‑‑ Upon
recessing at 0942 / Suspension à 0942
‑‑‑ Upon resuming
at 0951 / Reprise à 0951
LISTNUM
1 \l 11759 MR.
WEINSTEIN: It's a change of order?
LISTNUM
1 \l 11760 THE
CHAIRPERSON: Change of order, I
understand.
LISTNUM
1 \l 11761 THE
SECRETARY: Then Mr. ‑‑
please introduce yourself before you ‑‑
LISTNUM
1 \l 11762 MR.
WEINSTEIN: Okay. Mr. Chairman and Commissioners, my name is
Larry Weinstein. I'm a producer,
director, and founding partner of Rhombus Media, a small independent Toronto‑based
film and television production company that has largely specialized in high‑end
performing arts programming since 1979.
LISTNUM
1 \l 11763 Thank
you for allowing me to support the CTVglobemedia's application to acquire CHUM
Limited, and in turn the performing arts specialty channel Bravo.
LISTNUM
1 \l 11764 Canada
has long been at the forefront in the creation of performing arts, documentaries,
and performance specials. We, our
company, and a number of other producers across Canada have won more awards in
this genera then those of any other country.
Rhombus itself has earned a reputation for high‑quality
programming that has attracted new audiences in the arts in Canada and
abroad. It's been our mainstay, it's
been our passion, and it's allowed us to enjoy a huge international reputation.
LISTNUM
1 \l 11765 But
making these types of programs has become increasingly difficult over the last
few years. Now more than ever we need
strong Canadian champions or cultural defenders that have the financial
strength and creative vision to invest in Canadian culture.
LISTNUM
1 \l 11766 With
its strong financial pledges and commitment to Bravo, it is clear that
CTVglobemedia is perfectly positioned to be such a champion. Their commitment of $6,000,000 towards
performing arts documentaries on top of existing budget levels would be a great
boom to Canada's culture. With this
pledge, and a number of others outlined in their benefit package, I believe
that CTVglobemedia is the perfect group to nurture and support Bravo, Canada's
premier arts channel.
LISTNUM
1 \l 11767 Rhombus
has produced many shows with Bravo and with Bravo Fact from the channel's very
inception. We greatly benefited from
their heyday in the mid to late '90s, 2000, 2001 when they were able to invest
substantial licence fees into what were to become many of our most acclaimed
programs awarded in broadcast throughout the world.
LISTNUM
1 \l 11768 Your
approval of this proposed transfer of ownership, will allow Bravo not only to
return to those days, the heydays, but likely to thrive more than ever.
LISTNUM
1 \l 11769 CTVglobemedia
has shown its expertise and commitment in building Canadian programming of
other genres in the past, enhancing Canadian production, and bringing large
audiences to the work of filmmakers and TV producers. Their investment in CHUM and Bravo will
encourage our company and others to continue to work in Canada, and have the
opportunity to create some of the best cultural programming in the world. In ‑‑ which in turn will
have great resonance with all Canadian cultural institutions ‑‑
performing arts institutions.
LISTNUM
1 \l 11770 In
the past Bravo often came to the rescue of many of the most important projects
when other broadcasters faltered. If
CTVglobemedia is given the opportunity to fall through on its pledges, it will
infuse Bravo with the support it needs to continue to play this pivotal role.
LISTNUM
1 \l 11771 The
development and creation of the performing documentary is under threat as never
before in television broadcasting history.
Funding for performing arts on television in both the international and
national scene is diminishing, and in some cases has completely been
disappearing.
LISTNUM
1 \l 11772 The
recent termination of CBC's flagship program ‑‑ arts program,
Opening Night, was a devastating indication of what these shows are up against,
and what terribly difficult decisions broadcasters have had to make.
LISTNUM
1 \l 11773 We
need national broadcasters to support and promote arts programming so that it
can reach a substantial audience, an audience that does have an appetite for
these programs. Bravo can fulfill such a
role, and with CTV as its new owner we believe that it can also thrive.
LISTNUM
1 \l 11774 This
will not benefit only art's program producers but innumerable talents across
Canada; musicians, actors, designers, choreographers, dancers, composers,
writers, and directors. They'll all be
greatly affected.
LISTNUM
1 \l 11775 In
this way I believe CTVglobemedia in support of Bravo will be regarded a
visionary ‑‑ that they have already committed to preserving
and nurturing Bravo, and thus recognizing an important contribution made by
this channel and its affiliated independent producers is highly commendable and
can't be underestimated.
LISTNUM
1 \l 11776 With
diminishing funding over the past few years Rhombus and others have had to look
in other directions turning to non‑arts related productions. We sincerely want to reverse that trend.
LISTNUM
1 \l 11777 We
are producers with a passion for Canada and for the arts, and a passion for the
creation of the cultural Canadian legacy that is seen here and also exported
around the world.
LISTNUM
1 \l 11778 If
you approve this transaction you will be protecting and nurturing not only the
integrity of Bravo, but the entire Canadian performing arts community at large,
and the invaluable contribution that they make to defining the Canadian
nation ‑‑ sorry, the identity of our nation.
LISTNUM
1 \l 11779 I
can't think of a more worthwhile and admirable endeavor. Thanks for your time, and I'd be happy to
answer any questions.
LISTNUM
1 \l 11780 THE
SECRETARY: We will proceed with Mr. John
LaRose of the Aboriginal Peoples Television Network Incorporated.
LISTNUM
1 \l 11781 Mr.
LaRose.
LISTNUM
1 \l 11782 MR.
LAROSE: Mr. Chair, Commissioners, I am
Jean LaRose, an Abenaki citizen of the Odanak First Nation in what is now
called Quebec. I am also the Chief
Executive Officer of Aboriginal Peoples Television Network Incorporated.
LISTNUM
1 \l 11783 I
am pleased to appear today on behalf of APTN in support of CTVglobemedia's
application to acquire CHUM Limited. At
APTN, we believe that this application will have a direct and immediate impact
to increase the level of participation of First Nations, Inuit, and Métis
Peoples in television broadcasting. We
believe that this application will improve the position of Aboriginal Peoples
for a number of reasons.
LISTNUM
1 \l 11784 First,
CTVglobemedia has committed to contribute $2.25 million to APTN over seven
years to be used to fund dramatic movies and series with Aboriginal independent
producers. We should say that this
commitment did not just materialize "out of thin air". It came from CTVglobemedia's working
collaboratively with APTN to identify the area of Aboriginal production that
could most benefit from direct support.
It also derives from discussions I had with CTVglobemedia that we could,
jointly, develop a dramatic series that would be attractive to both our
audiences. I applaud CTVglobemedia's
recognition of this possibility.
LISTNUM
1 \l 11785 Drama
programming is tremendously important for Aboriginal producers and for
APTN. Drama continues to be among the
more popular forms of TV programming. I
reaches out to the largest audiences.
Once that audience is reached, drama helps to build bridges: it increases understanding and empathy.
LISTNUM
1 \l 11786 It
is regrettable but until recently good dramas featuring Aboriginal talent was close
to non‑existent. I don't think I
am saying anything controversial when I say that there is a significant lack of
knowledge among the wider Canadian population about Aboriginal Peoples, about
the challenges we face in Canadian society, and about the historic ‑‑
meaning very long‑standing, generation after generation ‑‑
nature of these challenges.
LISTNUM
1 \l 11787 I
would suggest that there is a connection between how Aboriginal Peoples are
portrayed on television ‑‑ whether they are portrayed at all,
as a matter of fact ‑‑ and the level of knowledge about
Aboriginal Peoples in Canadian society generally.
LISTNUM
1 \l 11788 You
can't blame the media alone for the poor level of knowledge that exists,
generally speaking, but the media is definitely part of the solution.
LISTNUM
1 \l 11789 Drama
programming sits at the top of the programming hierarchy. It is the most challenging and expensive to
produce, and it builds the most sought‑after skills among those involved
in the production.
LISTNUM
1 \l 11790 One
of quite a few Aboriginal producers that intervened in this proceeding in
support of CTVglobemedia, Big Soul Productions, described the situation very
well.
LISTNUM
1 \l 11791 Big
Soul stated that Aboriginal producers need to take responsibility for keeping
Aboriginal peoples in the industry.
LISTNUM
1 \l 11792 Allocating
more funding, therefore, to support higher drama, budget drama productions by
Aboriginal independent producers, which draw Aboriginal writers, directors,
actors and behind the camera personnel will build expertise that will help
Aboriginal talent in the industry in the years to come.
LISTNUM
1 \l 11793 Finally,
APTN has identified high quality drama programming as a priority for our
network, but it is something that we do not have the sufficient resources to
produce in quantity on our own.
LISTNUM
1 \l 11794 We
have to partner with others to get this kind of programming off the ground.
LISTNUM
1 \l 11795 We
are tremendously encouraged by CTVglobemedia's positive response and clear
commitment to help APTN to produce more of this important genre programming.
LISTNUM
1 \l 11796 The
second way in which CTVglobemedia's benefits proposal will improve the position
of Aboriginal peoples in broadcasting, is that CTVglobemedia has chosen to
allocate its funding to drama production through APTN.
LISTNUM
1 \l 11797 In
other words, while the funding will ultimately be used to support Aboriginal
independent production, APTN will also benefit in that we will obtain broadcast
rights to those productions.
LISTNUM
1 \l 11798 We
believe that this approach reflects an understanding on CTVglobemedia's part
that APTN has to play a leading role in representing Aboriginal peoples in
television, and in ensuring that Aboriginal peoples have the opportunity to
tell their own stories from their own advantage point.
LISTNUM
1 \l 11799 We
believe that CTVglobemedia's allocation of funds directly to APTN shows that it
views APTN as a partner to be supported in the broadcasting system. A partner that is working towards mutually
compatible goals.
LISTNUM
1 \l 11800 And
it also validates the CRTC's vision of providing a place for Aboriginal peoples
in the broadcasting sector when it licensed APTN in 1999.
LISTNUM
1 \l 11801 Today
key place in the industry now recognize, support and actively contribute to
further enhance and solidify the vision that Aboriginal peoples had, and that
the CRTC shared.
LISTNUM
1 \l 11802 It
is important, we believe, that Aboriginal peoples control the telling of their
own stories.
LISTNUM
1 \l 11803 CTVglobemedia's
other important benefits proposal for Aboriginal peoples in this transaction
includes the allocation of 3 million over seven years to social benefits in
support of traditionally under‑represented groups.
LISTNUM
1 \l 11804 Aboriginal
peoples will not be the exclusive recipients of these dollars, but we expect
that a significant portion would be spent on Aboriginal initiatives.
LISTNUM
1 \l 11805 We
noted in our written intervention that the Aboriginal media education fund
would be well positioned to assist CTVglobemedia to direct funding to youth
skills training, where it is needed most.
And we expect that IMF will follow up with CTVglobemedia to show how it
can be of assistance.
LISTNUM
1 \l 11806 Above
and beyond the specific benefits CTVglobemedia has proposed, we think it is
important to underline our support for this application has much more to do
with our experiences with CTV since APTN first launched.
LISTNUM
1 \l 11807 We
accept the argument that it is important for Canada to have large and healthy
media companies that can face head on the challenges that the future can bring,
and there are many.
LISTNUM
1 \l 11808 But,
from our perspective, as a small stand‑alone service, it is just as
important that these large companies support the smaller services that also
have a direct role in fulfilling important broadcasting policy initiatives.
LISTNUM
1 \l 11809 Otherwise,
smaller services risk being left behind and policy objectives will not be met.
LISTNUM
1 \l 11810 Consistently
over the years CTV has shown that it shares our understanding of APTN's role in
the system, and CTV's role in supporting APTN.
LISTNUM
1 \l 11811 For
example, the financial support offered to APTN as part of the Bell Globemedia
benefits package allowed APTN to build seven news bureaus across Canada.
LISTNUM
1 \l 11812 This
led directly to the success that APTN National News has achieved in bringing
news stories of direct relevance to Aboriginal peoples from across the country
to the airwaves everyday.
LISTNUM
1 \l 11813 Without
CTV's support, it is doubtful that APTN National News would be as vital a
source of information as it is today.
LISTNUM
1 \l 11814 We
are just as pleased to report that CTV's commitment to APTN did not stop with
the benefits funds.
LISTNUM
1 \l 11815 We
found that CTV was prepared to work with APTN to draw on APTN's resources in
the field to enhance CTV's own news capabilities.
LISTNUM
1 \l 11816 This
has led to increased opportunities for our news personnel.
LISTNUM
1 \l 11817 CTV's
commitment to APTN in this area, we need to emphasize, is continuing beyond the
lifetime of those previous benefits commitments.
LISTNUM
1 \l 11818 We
have just signed a five‑year agreement between APTN and CTV News, which
sets out the framework for continued cooperation in news and current affairs.
LISTNUM
1 \l 11819 Among
other things, the agreement commits us to share news materials with each other,
and provides APTN with access to CTV's substantial archives.
LISTNUM
1 \l 11820 Obviously
having CTV's resources available to us makes a huge differences for our news
capabilities.
LISTNUM
1 \l 11821 It
is a two‑way street, though, and CTV News will also benefit from this
arrangement, as it has in the past.
LISTNUM
1 \l 11822 In
conclusion, we believe that CTVglobemedia has proposed tangible benefits that
will provide direct support to Aboriginal peoples in broadcasting, and that
this application will allow CTVglobemedia to build on its past support for
Aboriginal initiatives. For these
reasons, we support this application.
LISTNUM
1 \l 11823 Finally,
the Aboriginal production community has supported this initiative to a level
unheard of before.
LISTNUM
1 \l 11824 We
have provided 75 letters of support to the CRTC in favour of this proposal, and
you have received these.
LISTNUM
1 \l 11825 Interestingly
enough, as an aside, that's as many letters of support as they provided for our
own license renewal, which has left me somewhat ‑‑
‑‑‑ Laughter /
Rires
‑‑ curious as to where
they actually stand, but that's another issue altogether.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11826 I
suggest to you that the entire community has recognized the importance of the
proposed benefits package, both for APTN, as well as for their own stories in
finding new and innovative outlets for their stories.
LISTNUM
1 \l 11827 I
thank the Commission for this opportunity, and I will answer any questions that
you wish to ask of me. Thank you.
LISTNUM
1 \l 11828 THE
SECRETARY: Thank you.
LISTNUM
1 \l 11829 We'll
proceed with the next presentation, Mr. Brent Butt and Virginia Thompson of
Corner Gas.
INTERVENTION
LISTNUM
1 \l 11830 MR.
BUTT: Good morning, Mr. Chairman and the
Commissioners.
LISTNUM
1 \l 11831 My
name is Brent Butt, and I am the creator, head writer, principal actor and an
executive producer of the Canadian TV series Corner Gas.
LISTNUM
1 \l 11832 I'd
like to thank you for this opportunity to speak at this hearing, because I want
to express my full and enthusiastic support for CHUM Limited's transfer of
ownership to CTVglobemedia.
LISTNUM
1 \l 11833 Also
joining me is my co‑producer, Virginia Thompson.
LISTNUM
1 \l 11834 I've
been a stand‑up comedian for almost 20 years now. And the first 15 of those years could be
fairly described as eking a meager existence, while doggedly pursuing a crazy
dream.
LISTNUM
1 \l 11835 Actually
more accurately described as barely eking a meager existence ‑‑
‑‑‑ Laughter /
Rires
‑‑‑ and often
failing to eke out what could reasonably called an existence.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11836 But
that's the life of an artist and a performer.
You do it because you have to, and you hope that somewhere down the line
you find the way to pay the bills.
LISTNUM
1 \l 11837 But
I always knew that I wanted to step things up at some point to work in
television. I love television. I seriously considered humanities greatest
achievement.
LISTNUM
1 \l 11838 I
know that sounds like I'm trying to be funny, but I'm not.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11839 I
won't bore you with my arguments as to why I consider television to be greater
than penicillin or man flight, but I do.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11840 Working
in television comedy was always my goal.
LISTNUM
1 \l 11841 I
often spoke to others about various ideas that I had for sitcoms, but the
discussions would always end with the person I was talking to telling me that a
sitcom in Canada was impossible.
LISTNUM
1 \l 11842 They
would say, "Yeah, it's a funny idea.
Could be entertaining, but we can't make sitcoms in Canada."
LISTNUM
1 \l 11843 And
I always wondered why. And when I asked
why, there was usually some vague talk about being in a small market and having
to compete with Americans who just do it better. And that never sat well with me. I always thought do it better? Have you ever seen an episode of She's the
Sheriff?
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11844 They
don't automatically ‑‑ they don't automatically do it
better. We should be doing our own
shows.
LISTNUM
1 \l 11845 Over
the years I had a few opportunities to work in television, but those
opportunities were always short‑lived.
I can't definitively say why those opportunities didn't pan out, but I have
some theories.
LISTNUM
1 \l 11846 From
the start, I was paired up with a producer I didn't know, with a writer or two
that I didn't know and that didn't know me.
And even once I was paired up with a director who told me he had never
seen an episode of the Tonight Show. He
had, however, shot several figure skating specials and so was therefore
apparently the right guy to shot the comedy I was working on.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11847 I
don't mean to sound ungrateful for those opportunities, I just mean to
illustrate the frustrations that come from having accountants talking to me
about jokes in the script.
LISTNUM
1 \l 11848 I
once had an accountant say these words to me, seriously I'm quoting these words
in regard to a show I was working on:
"A chicken suit would be funnier."
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11849 I
said, "Do you mean it would be less expensive?" He said, "No, I really think that it
would be funnier. But, yes, it would be
less expensive ‑‑
‑‑‑ Laughter /
Rires
‑‑ there's a chicken
suit in the wardrobe warehouse."
LISTNUM
1 \l 11850 At
any rate, those shows either never saw the light of day or never lasted, and I
always found myself back touring the nightclubs.
LISTNUM
1 \l 11851 But
Corner Gas was a very different scenario.
The executives at CTV suggested that I start interviewing production
partners.
LISTNUM
1 \l 11852 They
didn't assign me a producer, they wanted me to find a producer that I felt
comfortable with, who I felt understood the project and my sense of
humour. And then they asked me who do
you think should write the show with you.
What a wonderful and refreshing question.
LISTNUM
1 \l 11853 In
short, what I'm trying to say here is that at all times throughout the creation
of Corner Gas, and through its multiple seasons, I've been allowed to focus my
energies in the directions where I can actually have some impact.
LISTNUM
1 \l 11854 So
I don't know how much more expensive a duck suit is than a chicken suit. I even have a hard time verbalizing why it
might be funnier in a given situation.
LISTNUM
1 \l 11855 I
just know that it's one of those intangibles that you have to feel, and it's
why creative people should be allowed to create.
LISTNUM
1 \l 11856 But
the scripting and the jokes and the acting are only the most visible of the many
reasons why Corner Gas is watched by more Canadians than any other sitcom,
which it is. It's the most watched
comedy, Canadian or American.
LISTNUM
1 \l 11857 When
was the last time that the top‑rated sitcom in Canada was Canadian? I was trying to think, I don't think it's
ever happened.
LISTNUM
1 \l 11858 And
a huge part of that success is due to the support that we received from the BCE
CTV benefits. It made a huge difference
getting the vast majority of our production financing from one place, and the
one‑stop shopping financing model.
LISTNUM
1 \l 11859 As
you know, this kind of funding model and support is highly unusual in Canada.
LISTNUM
1 \l 11860 I
strongly endorse the approach the CTVglobemedia is taking with the CTV CHUM
benefits, because it will breed success.
LISTNUM
1 \l 11861 And
when I say success, I'm not talking about whether or not the shows will turn a
profit. I just don't know a lot about
those things.
LISTNUM
1 \l 11862 Me
talking about the bottom line would just be the reverse of the duck suit thing.
LISTNUM
1 \l 11863 When
I say success, I'm talking about Canadians from coast to coast, lots of them,
sitting down at a specific time of the week to watch a specific show, a
specific Canadian show.
LISTNUM
1 \l 11864 The
CTV CHUM benefits is set up to give creative people a chance.
LISTNUM
1 \l 11865 I
know a ton of very talented writers and actors and comedians and directors and
young producers who can't break into the business because they just don't know
how to raise the necessary funding from the various agencies that support the
arts. It's just not an easy process.
LISTNUM
1 \l 11866 So
these creative people end up missing the boat because they don't know how to do
the paperwork, or simply scrapping their ideas because they can't alter their
vision to suit the varying demands of the separate funding agencies.
LISTNUM
1 \l 11867 The
CTV CHUM benefits will allow those people an opportunity to better realize
their vision, because they can spend time and energy writing, and casting, and
story boarding, and rewriting, and designing sets, and doing all those other
intangible things that don't show up on a balance sheet.
LISTNUM
1 \l 11868 I'd
like to sum up by correcting a misconception about Corner Gas.
LISTNUM
1 \l 11869 There
are some who think that, for whatever reason, I approached other broadcasters
with the idea for Corner Gas, and that they turned it down, thereby missing out
on this huge success story.
LISTNUM
1 \l 11870 It
makes for a good urban legend, I guess, but it's just not the case.
LISTNUM
1 \l 11871 I
want to make it clear that CBC or Global or anyone else did not turn down
Corner Gas. I never approached them with
the idea of Corner Gas.
LISTNUM
1 \l 11872 And,
in fact, I never actually approached CTV either.
LISTNUM
1 \l 11873 The
truth is CTV came to me. They sought me
out as a creative person and they said, "Hey, do you have any ideas for a
TV show?" And that's when I started
talking about this small gas station show that I had.
LISTNUM
1 \l 11874 My
point is the executives of CTV and the Comedy Network were actively seeking out
talent, and they still are.
LISTNUM
1 \l 11875 I
don't know if any of you have ever heard the name Shawn Proudlove. Not many people have. But for my money he's one of the most
original and unique minds in the country, and he's never had a national forum
for his talents.
LISTNUM
1 \l 11876 So
you can imagine how it warmed my hearts and bolstered my belief in Canadian
show business to find out that the Comedy Network is giving Shawn Proudlove his
own special.
LISTNUM
1 \l 11877 I
can almost guarantee no one else in the country was going to give such a unique
artist a shot.
LISTNUM
1 \l 11878 Corner
Gas is about to start shooting its fifth successful season, with an average
audience now of over one and a half million viewers.
LISTNUM
1 \l 11879 It
has been sold to more than 26 countries, including a sale to U.S. channel,
which has over 70 million subscribers.
There's a companion book and merchandising and DVDs.
LISTNUM
1 \l 11880 So,
from my perspective, the BCE CTV benefits has accomplished exactly what they
said they would, and then some. And I
have no doubt the CTV CHUM benefits will lead to the same type of success.
LISTNUM
1 \l 11881 As
an artist, I was able to benefit from this system, and I don't want to see it
taken away from the next generation.
LISTNUM
1 \l 11882 I
don't have anyone telling me that a Canadian sitcom is impossible any
more. What happens now is people say to
me, "Hey, I've got a great idea for a sitcom."
LISTNUM
1 \l 11883 This
is a good time. It's finally a good time
for artists in this business. It's what
me and my friends used to dream about.
LISTNUM
1 \l 11884 I
had to create a production company to do business, and I've always been kind of
crazily symbolic about things for whatever reason. I wanted to give a name to my production
company that meant something, and since working with CTV I called my production
company Sparrow Media, because I no longer feel the need to fly south.
LISTNUM
1 \l 11885 Thank
you for your time. Virginia and I are
happy to answer any questions.
LISTNUM
1 \l 11886 THE
SECRETARY: Thank you.
LISTNUM
1 \l 11887 We'll
proceed with the next presentation. Mr.
Steven Stohn and Linda Schuyler of Epitome Pictures.
INTERVENTION
LISTNUM
1 \l 11888 MS
SCHUYLER: Mr. Chairman and
Commissioners, thank you for the opportunity to present to you today.
LISTNUM
1 \l 11889 My
name, as you heard, is Linda Schuyler, and I own a company with Steven Stohn.
LISTNUM
1 \l 11890 I
am the creator, and together we are the executive producers, of two awarding‑winning
Canadian dramatic series, Degrassi: The
Next Generation, and Instant Star, both of which air on CTV in Canada, and are
also seen in over 150 and 120 countries respectively around the world.
LISTNUM
1 \l 11891 We
are immensely proud of the fact that young audiences internationally are
watching these 10 out of 10 Canadian series.
LISTNUM
1 \l 11892 We're
here today to talk in full support of CTVglobemedia's acquisition of CHUM
Limited.
LISTNUM
1 \l 11893 Joining
Steven and me today, we are pleased to have two cast members from our series,
Stacie Mistysyn and Melissa McIntyre.
LISTNUM
1 \l 11894 Stacie
Mistysyn has been an actor with us since the earliest days of the kids of
Degrassi Street, which is over 25 years ago.
Sorry to do that to you, Stacie.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11895 And
she is still working with us today.
LISTNUM
1 \l 11896 And
Melissa is one of our stars on Degrassi:
The Next Generation, and has been for seven years.
LISTNUM
1 \l 11897 Our
relationship with CTV has given us the platform to build bigger audiences for
high quality Canadian programming. And
we have no doubt that the proposed acquisition of CHUM will only add to this
visionary's company's ability to provide even more opportunity to Canadian
independent producers.
LISTNUM
1 \l 11898
CTV's commitment to Canadian programming of the highest quality, particularly
drama, is demonstrated through their incredible support for Degrassi and other
shows made possible through the BCE CTV benefits program.
LISTNUM
1 \l 11899 The
CTV CHUM benefits that are proposed in this application are based on a similar
model, and we can speak to the reason that this model is poised for success.
LISTNUM
1 \l 11900 MR.
STOHN: Our entertainment industry is
fraught with many challenges, perhaps foremost among them being how to finance
projects.
LISTNUM
1 \l 11901 I
firmly believe that CTV's staunch support of Canadian programming, as well as
the BCE CTV benefits have been at least part of the solution to this problem.
LISTNUM
1 \l 11902 The
BCE CTV benefits package, and the series extension benefit in particular, was
of enormous help in achieving Degrassi's success.
LISTNUM
1 \l 11903 The
additional financing provided under this benefit was sufficient to extend the
typical series order of 13 to a larger number of episodes, like 22 or 19, or in
the case of this season, 24.
LISTNUM
1 \l 11904 And
this made our series far more attractive to international buyers. And that has been critical in telling our
identifiably Canadian stories to the world.
LISTNUM
1 \l 11905 As
an example, last year during our sixth season of Degrassi, we surpassed the 110
episode mark. And that's a key number,
as it permits broadcast each week day for 22 weeks without repeats.
LISTNUM
1 \l 11906 And
that, in turn, opened the door to a successful syndication sale in the United
States. Expanding us from the digital
channel that we now appear on, to daily over the air broadcasts in all of the
major cities of the United States, and indeed over 90 percent of all U.S.
communities.
LISTNUM
1 \l 11907 And
that's in addition to broadcasts on super stations such as WGN in Chicago, WPIX
in New York and KTLA in Los Angeles.
LISTNUM
1 \l 11908 So
we strongly believe that the inclusion of a similar funding envelope in the CTV
CHUM benefits package is extremely positive.
LISTNUM
1 \l 11909 I'd
also like to speak to the extraordinary support CTV has given us in the
development of multi‑platform adjuncts to our series.
LISTNUM
1 \l 11910
CTV has been a financial creative and marketing supporter of the highly
successful websites for both Degrassi and Instant Star, and an array of new
media initiatives, such as webisodes, mobisodes, animated webisodes, graphic
novels and soundtrack albums, and these, in turn, have propelled forward even
further initiatives.
LISTNUM
1 \l 11911 For
example, just yesterday afternoon many of our cast members were in a Broadway
theater in New York for an event hosted by Rosie O'Donnell and to be broadcast
on the Internet via AOL.
LISTNUM
1 \l 11912 It
was featuring stars from the cast of Degrassi, five of them, and five members
from the cast of the hit Broadway musical Spring Awakening.
LISTNUM
1 \l 11913 They
were together discussing teen issues and challenges in a town hall forum in
front of a live teen audience, in addition to the huge audience expected via
the Internet.
LISTNUM
1 \l 11914 And,
may I say, hearing the reports of that event, it wasn't just a teen audience,
it was a screaming pandemonium of a teen audience.
LISTNUM
1 \l 11915 And
this is not unexpected. Susanne Boyce
has been with us on some of our mall tours in the United States, which we've
had to actually stop doing because thousands of fans come out to see, you know,
two of our Degrassi stars at a mall in Woodbridge, New Jersey, and the police
have had to be called in because ‑‑ no matter how much
security we have it tends to get out of control.
LISTNUM
1 \l 11916 My
fond dream is that one day the President of the United States will be one of
those fans who was lined up in the mall in Woodbridge, New Jersey or in the
Eugene O'Neil Theatre in Broadway and seeing our identifiably Canadian stories
in action.
LISTNUM
1 \l 11917 MS
SCHUYLER: CTV support and
promotion ‑‑ financial, creative, and promotional for both
Degrassi and Instant Star have been tremendous.
CTV could not have been more encouraging and supportive of our desire to
develop new writers, actors, and directors, which you've heard a lot about
today is so important.
LISTNUM
1 \l 11918 Because
we know that our future industry rests on what we do now to develop and
encourage diverse young talent. And
unusually for Canada, both our series have had the benefit of creative and far‑reaching
publicity and promotional campaigns.
LISTNUM
1 \l 11919 All
of this together with these series being given prominence on CTV schedule has
resulted in Degrassi and Instant Star, being the top two English language
Canadian drama series on air today.
LISTNUM
1 \l 11920 We
support this application because we know from experience and from CTV's
demonstrated success that the benefit models proposed will breed further
success. CTVglobemedia's track record of
working in tandem with independent producers to develop and promote
identifiably Canadian dramatic television series is unmatched.
LISTNUM
1 \l 11921 In
this borderless media age where new technology has increased the competition
for media companies worldwide, we should applaud a Canadian broadcaster who
wants to meet the challenge of creating compelling stories that reflect
Canadians to themselves. Success
deserves to be regarded and encouraged.
And we encourage you to approve this application. Thank you.
LISTNUM
1 \l 11922 THE
SECRETARY: We will continue with Mr.
Heyges, Bright Light Pictures Inc.
LISTNUM
1 \l 11923 Sorry,
for the pronunciation.
LISTNUM
1 \l 11924 MR.
HEYGES: It's okay. It's Heyges.
Thank you. It happens a lot.
LISTNUM
1 \l 11925 Good
morning, Mr. Chairman, Commissioners.
Thank you for the opportunity to appear at this very important hearing
in support of the CHUM Limited transfer of ownership to CTVglobemedia.
LISTNUM
1 \l 11926 My
name is Steven Heyges. And I'm a producer
and principal of Bright Light pictures, a Vancouver based production company
that develops finances and produces independent feature films and television
projects for the domestic and international marketplace.
LISTNUM
1 \l 11927 To
date we've produced over 30 feature films as well as multiple television
series. We are thrilled that
CTVglobemedia has made a firm commitment to preserve Citytv's unique
contribution to the broadcasting system, including their support of Canada
feature films.
LISTNUM
1 \l 11928 In
an increasingly competitive global environment TV licencing is an integral part
of the financing structure for Canadian feature films. Without it Canadian film creators would never
be able to compete financing requirements and go on to exhibit our films both
in Canada and all over the world.
LISTNUM
1 \l 11929 The
ability to showcase Canadian programming domestically and on the international
stage can only continue if we have strong industry partners with a broad
reach. And without Canadian broadcast
partners so many excellent Canadian films would never be seen in many Canadian
markets. Theatrical releases can be
short lived and free TV windows are often the key platforms through which these
films reach Canadian audiences.
LISTNUM
1 \l 11930 I
believe that CTVglobemedia with their demonstrated history of investing in
Canadian programming and building success is the right choice to take on CHUM
assets, and become a much stronger voice for Canadian content and Canadian
feature film.
LISTNUM
1 \l 11931 The
winning combination of CHUM's experience in feature film and CTV's expertise in
promotion and building audiences will be an immense benefit to our
industry. Right now we are telling
Canadian stories, and have seen a huge talent pool in Canada, but increasingly
we see this talent go south.
LISTNUM
1 \l 11932 If
there are more production opportunities in Canada for and by Canadians, we can
create opportunities for the best and brightest in Canada. Our success has enabled us to nurture many
emerging writers and directors and producers.
CTVglobemedia's commitment to maintaining CHUM's focus on supporting
feature films is of critical importance to independent filmmakers.
LISTNUM
1 \l 11933 CTV
has shown itself to be passionate about building Canadian programming and audiences,
and succeeded into doing so. This is no
small feat. I believe that under
CTVglobemedia's ownership the unique CHUM services will thrive, and their ideas
and innovation will be better financed.
LISTNUM
1 \l 11934 This
will mean that we do not lose the important contributions that Citytv and the
other CHUM services have been making to the broadcasting system, and that
Canada feature films will continue to have a free TV platform in Canada, and
the opportunity to travel around the world.
LISTNUM
1 \l 11935 The
marriage of these great companies while preserving City's distinctive voice
will contribute greatly to the vitality of our broadcasting system thereby
enhancing Canadian content.
LISTNUM
1 \l 11936 THE
CHAIRPERSON: Thank you very much. It's fascinating to hear you all. Obviously you're very satisfied with your
relationship with CTV. You've had a long
relationship and it has been mostly beneficial.
LISTNUM
1 \l 11937 For
us the key question, of course, is what I posed to the previous panel, why CTV? Would not another owner of CHUM do the same
thing? That company would have Canadian
obligations. It would offer benefits. It would make commitments for film, for
independent production, et cetera. And,
of course, you are extremely talented and successful producers some of
you. Working with you would be to ‑‑
other owners benefit, of course, because you put a product that people want to
see ‑‑ that sells, et cetera.
LISTNUM
1 \l 11938 So
explain to me what is special about CTV?
What is its difference? Why
another owner could not do exactly the same thing that CTV has promised or
committed to do?
LISTNUM
1 \l 11939 MR.
HEYGES: If I could jump in. From the feature film standpoint ‑‑
I wanted to address this ‑‑ because feature film is in crisis
in this country right now. And I think
that what ‑‑ CHUM has been a supporter of feature film, and
our company wouldn't be where it is today had it not been for the support of
CHUM and feature film.
LISTNUM
1 \l 11940 What
I see in CTV, as Brent mentioned earlier, is a creative company that has the
ability to promote and market Canadian content.
That is a component that is missing from the feature film community
right now. To have the creative
knowledge and marketing and promotion is an essential component to the success
of any feature film. I think those ‑‑
that is something that is a unique ‑‑ a unique ‑‑
something that is ‑‑ really I can only see CTV as the company
that can do that properly.
LISTNUM
1 \l 11941 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11942 MR.
BUTT: I ‑‑ oh,
sorry. I just wanted to ‑‑
LISTNUM
1 \l 11943 THE
CHAIRPERSON: Whoever wants to speak.
LISTNUM
1 \l 11944 MR.
BUTT: When you first posed this question the word that really stuck out in my
mind was relationship. You said we seem
to enjoy a good relationship with CTV.
LISTNUM
1 \l 11945 For
me personally that's ‑‑ that is what it comes down to. Because I've worked with other
broadcasters. I've worked with CBC, I've
worked with Global, I worked with some other independent producers. But it really comes down to the relationship
of the individuals.
LISTNUM
1 \l 11946 When
you talk about Rogers or anybody else, you know, adding to these benefits or
having to make commitments ‑‑ with CTV it's not legal
obligations with them. It goes more than
that. They can satisfy the legal
obligations that they have in a lot easier ways than what my experiences has
been with them.
LISTNUM
1 \l 11947 One
of the things that comes to mind is one of the executives that was put in
charge of Corner Gas in the beginning ‑‑ being on the phone
with me until 1:30 in the morning listening to my ideas about how I could alter
the resolution of the third act of the script I was working on.
LISTNUM
1 \l 11948 She
didn't have to do that. She could have
easily said, well, you know, e‑mail it to me tomorrow ‑‑
or I'll give you my ideas ‑‑ I said I'm going to be working on
this late. She said, well give me a call
whenever you want. I said it's not going
to be until 1:00 or 1:30 in the morning.
And she said that's all right.
We'll talk about it then. Because
she knew I wanted to get this to the story department the next day.
LISTNUM
1 \l 11949 So
it's those kind of commitments that go beyond the ‑‑ just the
obligations that they have to satisfy the Commission. It really is them wanting to make sure that
the creative people have the most opportunity to put their product out
there. That's been my experience.
LISTNUM
1 \l 11950 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11951 MS
THOMPSON: And following up with Brent. I
think what makes CTV and this exciting, you know, merger to companies ‑‑
exciting for me is that you say we're very interesting and talented bunch,
and ‑‑ but I think you have to understand that CTV has
nurtured our talent. On Corner Gas I was
a creative producer. Not an executive
producer championing other creative talents before Corner Gas.
LISTNUM
1 \l 11952 CTV
took a chance on me and on our company to be able to develop us and grow us as
they developed Brent and his vision.
It's an extraordinary situation when you have a broadcaster ‑‑
and I believe this broadcaster is extraordinary because of their knowledge.
LISTNUM
1 \l 11953 CTV
understands producers because I think their staff members ‑‑
some of them are former producers.
They're also exceptional broadcasters.
They're also exceptional marketers.
They also have an amazing, you know, capacity to understand new
media. They nurture us. We nurture them. It is extraordinary.
LISTNUM
1 \l 11954 And
I've been a producer in Canada for, you know, now ten years. The most extraordinary experience that I had
before working on Corner Gas with Brent Butt and CTV was when our first series,
Incredible Stories Studio ‑‑ it was a huge hit in Canada, but
it didn't actually really hit until it went overseas. And I had the opportunity to work with
Disney.
LISTNUM
1 \l 11955 And
Disney just worked differently than Canadian broadcasters. They worked as a team. They nurtured this project and they made it
relevant to the European community. And
they knew how to market, and they knew how to promote, and they knew how to
nurture.
LISTNUM
1 \l 11956 And
I had never been nurtured, marketed, and promoted in that way. I got that nurturing from Disney
International. And I came back to Canada
and I thought I wonder if that could ever happen again. And it's happened with Corner Gas.
LISTNUM
1 \l 11957 So
I do believe that this is an exceptional company with exceptional people that
have a broad base of knowledge in so many different aspects of broadcasting,
marketing, promotion, et cetera that they bring out the best in us. And I do very much hope that they can bring
that with the next generation of producers with this acquisition.
LISTNUM
1 \l 11958 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 11959 MS
SCHUYLER: I would just like to follow up
on that. It was ‑‑ I
don't know about Jully's teeth analogy, but I do know that in sports that the
only way that we have winning teams is when we have great depth in the bench.
LISTNUM
1 \l 11960 It
was 20 years ago that Ivan and I first met.
And at that point Degrassi was running on CBC, and it was running on a
Sunday afternoon time slot around 5 o'clock.
LISTNUM
1 \l 11961 And
Ivan called me ‑‑ had just come back to work at CBC, and he
called me into his office. And he said,
Linda, I've been aware of this show of yours, and I think we should actually
move it to an 8:30 time slot. And I
looked at him and I said, oh very nice to meet you Ivan, but I really don't
think that's a very good idea.
LISTNUM
1 \l 11962 And
he said well why? And I said well
because I don't feel ‑‑ I don't know if my show is ready for
it or whatever. And he said I am your
broadcaster. I am telling you, you are
ready for 8:30. He said you do your
job. You go and ‑‑ you
produce the shows. I will do my job and
I will broadcast them.
LISTNUM
1 \l 11963 And
in those days Ivan and I worked quite closely.
He used to come down to our office, which was in an old basement. And he would watch the first cut of every
season. And we would, you know, make
sure that together we were happy with the story telling that we were doing.
LISTNUM
1 \l 11964 Now
we're back with Degrassi the Next Generation.
And I think that word "next generation" speaks volumes. Not just to what we're doing in front of the
camera, but to what's going on behind the camera.
LISTNUM
1 \l 11965 Ivan
does not come down to my basement office anymore. In fact, I'm not even in a basement office
anymore. He has around him ‑‑
when you look at Susanne Boyce and his whole Canadian team, he's not able to
work with me on a daily that he used to.
But he has a team around him who share the vision and the passion.
LISTNUM
1 \l 11966 I
also don't work as closely on the floor on my show as I used to. I've had to build around me an ‑‑
an infrastructure. In fact, one of my co‑producers
now on Degrassi: The Next Generation
is Stefan Brogren who if you knew the
original Degrassi he used to play Snake and was one of zit remedy. He has now grown to be a producer with me.
LISTNUM
1 \l 11967 So
we are together through what CTV is doing, and what we're now able to do in our
country is nurture this next level of talent.
Our industry is still a baby industry.
And we're competing as we well know with the forces south of us.
LISTNUM
1 \l 11968 And
it is only ‑‑ we are only going to mature as an industry if we
can continue to build on those relationships and nurture our talent. So it's ‑‑ you're dealing
with a lot of things that are not easy to measure. Because we're dealing with talent. We're dealing with creative people and ‑‑
but I think you've heard a lot today about relationships and nurturing, and I
can't speak highly enough of the importance of that.
LISTNUM
1 \l 11969 MR.
STOHN: If I could just add two small
points to what Linda said. And certainly
what Steve, Brent, Virginia, and Linda have said, and indeed the previous panel
on this issue resonate completely with me.
I'm just trying to make two different points perhaps.
LISTNUM
1 \l 11970 We
are facing a very uncertain future in the television world. I also have a music background, and I know
the music industry in the face of the Internet has really ‑‑
is going in to free fall and it's going into massive transformation now. It's highly likely that over the next few
years the television industry may be facing similar kinds of pressure.
LISTNUM
1 \l 11971 So
we're going to need teams that are, you know, innovated, looking to the future,
and willing to adapt. That also means
that we need ‑‑ there is something good about being big and
being able to survive what's going forward.
CTV has shown in our relationship with them an extraordinary capacity to
innovate in the new media and work with us.
We're small.
LISTNUM
1 \l 11972 I
think ironically in this world it's good to be very big. And it's good to be very small. We can be nibble and run around and come up
with ideas. CTV ‑‑ I
think big ‑‑ they're going to be very, very good and actually
crucial over the next while to really have the ability to withstand some of the
hurricanes that are going to be thrust in our path.
LISTNUM
1 \l 11973 The
second is diversity. And you know
what ‑‑ what I see looking out over the dial, what Linda and I
see as producers looking to different networks are ‑‑ as
networks get into trouble they tend to move more towards the middle, this may
be true in radio as well as in television, and start to appeal more and more to
the mass audience.
LISTNUM
1 \l 11974 Where
you've got one owner of two different channels, you actually are going to get
more diversity in the system. If a
Rogers were to take over a CHUM, you know, surely their economic self‑interest ‑‑
regardless of what expectations or commitments they made, their economic self‑interest
is going to be ‑‑ to make it look more like the most
successful network in the country, CTV.
LISTNUM
1 \l 11975 So
there's going to be pressures on them to do that. Whereas, in CTV's economic self‑interest
is to make them as different as possible, and indeed they've made that
commitment already. Because they've
already got CTV. Now they want something
that, you know, is an adjunct to it.
It's complimentary not in competition with it. So thank you very much.
LISTNUM
1 \l 11976 MR.
BUTT: I'd like to just add one thing if
I could too. It's a little anecdotal
maybe, but I think it applies to what we're talking about here. Recently we received word that ABC was interested,
based on the success of Corner Gas, of buying the rights to remake it and make
it an American show. Basically take
Corner Gas and make it American.
LISTNUM
1 \l 11977 I
know for a lot of reasons it ‑‑ probably from the business
standpoint ‑‑ was very exciting. And I think it probably made a lot of sense
for CTV financially to have that happen.
LISTNUM
1 \l 11978 Virginia
and myself and David Story ‑‑ the other executive producers,
we just talked about it and it just wasn't sitting well with us. It was kind of taking the work that the
writers and the actors and we as the producers had done and kind of erasing
that and getting rid of it. And suddenly
here's a gas station in Nebraska or Idaho, and there is some other guy with a
big round head and glasses doing it.
LISTNUM
1 \l 11979 ‑‑‑
Laughter / Rires
LISTNUM
1 \l 11980 It
just didn't sit well. So I didn't know
how to say that to CTV really, but I said it.
I said it doesn't sit well with us.
And they said well you don't have to do it. If you don't want to do it we'll talk to ABC,
and it will be fine. Don't worry about
it.
LISTNUM
1 \l 11981 They
as a champion that was big enough, you know, were able to step between us and a
large broadcaster who wanted to essentially take what we did. They were able to step between them and us
and say look, if they don't want to sell they don't have to sell.
LISTNUM
1 \l 11982 THE
CHAIRPERSON: Mr. Larose, you represent a
community that's clearly growing all the demographics ‑‑ I
would suggest becoming more and more important, et cetera. You mentioned your good relationship that you
have with CTV. And when I visited you
about two months ago you could explain it to me in more greater detail as part
of my general education.
LISTNUM
1 \l 11983 You
must be courted by other networks, too.
I mean other networks must be seeing you. Can you explain why you have such a good
relationship with CTV? Why you wouldn't
be on equal footing with other networks?
LISTNUM
1 \l 11984 MR.
LAROSE: Well, we do work with other
networks. Part of what APTN tries to do
is open opportunities for Aboriginal peoples across the broadcasting sector.
LISTNUM
1 \l 11985 Where
CTV has made a huge difference for us in many cases is in some of the ‑‑
as I mentioned in my presentation it has gone beyond the strict wording of what
the special benefit was. When we look at
the arrangement under the Bell Globe Media transaction, CTV was committed to
providing so many dollars for so many years to open the bureaus. And that was the ‑‑ that was
strictly the wording of the arrangement.
LISTNUM
1 \l 11986 However,
in building the relationship with them it has become much more than that. We are now two years past the special
benefits. We have worked to establish an
entirely new relationship, built on the fact that they have a range of outlets
across the country that allow us to tell our stories to Canadians from our
perspectives from our point of view.
That is really the only outlet we have right now outside of APTN when it
comes to news in that formal arrangement.
LISTNUM
1 \l 11987 When
we started discussing this proposal initially, the idea that I had ‑‑
and I mean it's interesting that I am sitting at same table as Mr. Butt ‑‑
I keep using Corner Gas as an example of the type of production that APTN would
dearly love to do with somebody like CTV where we have Warren Cardinal, to whom
I spoke by the way about this proposal and he was all enthusiastic about the
opportunities it may provide to some of our actors and other players in the
industry.
LISTNUM
1 \l 11988 This
is the type of thing that we feel right now and we know by experience that the
commitment that they have made will be lived up to. They have lived up to every commitment and
then gone beyond.
LISTNUM
1 \l 11989 Last
fall when we did the Aboriginal People's Choice Music Awards we
approached ‑‑ I approached Bell ExpressVu which is part of the
overall family, if you wish, and I asked them ‑‑ I said, you
know, you don't have any obligation to APTN but we are doing this live show and
I would love to do it in HD and I would love to get it out across the view
channel. ExpressVu provided it at no
charge to APTN or to the producer, the Aboriginal Production community, at all,
their HD truck; all of their equipment, all of their personal. Basically, they provided us a one‑time
benefit of over $170,000 just to help us put this show out, something that
nobody else has ever offered before.
LISTNUM
1 \l 11990 So
I think ‑‑ to me, what has been key in this relationship and
we are trying to build that relationship with others like Omni, as an example
where we have many similarities, and we have been successful with Omni.
LISTNUM
1 \l 11991 But
with CTV I know that when I call ‑‑ whether it's Robert Hurst,
it's Terry Snazel; it's one of the key people over there with whom I am working,
not only will I get a callback, often I get a response. They actually pick up the phone and we can
actually talk about these things and something concrete has come out of it.
LISTNUM
1 \l 11992 The
same was with CHUM. I could call
Sarah. I can call people over there and
I knew that they would be part and parcel of finding a solution and helping us
move forward.
LISTNUM
1 \l 11993 And
to us that's key having been out of this industry, you know, forever until the
CRTC gave us an opportunity almost eight years ago now, has been ‑‑
you know, they have been very strong supporters of the aboriginal people
initiatives and we believe that this merger will only reinforce not only the
relationship but the possibilities. I
don't see any negatives to it. I mean, I
can go back to when we looked back in the sixties when ‑‑ a
study in journalism. We had the Kent
Commission on media concentration and the newspaper industry. There were great fears that there would
be ‑‑
LISTNUM
1 \l 11994 THE
CHAIRPERSON: Wait just for the fall when
we have the diversity of voices hearing.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 11995 THE
CHAIRPERSON: We want to hear from you
then.
LISTNUM
1 \l 11996 Helen,
you had a question?
LISTNUM
1 \l 11997 COMMISSIONER
DEL VAL: Just I am following up on the
question on your loyalty to CTV, and I obviously can sense that, but what about
thinking of it from another perspective as well? CTV will be there. Like the CTV stations as they stand is what
you have built the loyalty with your successes with, but what about the
opportunity of an additional outlet; someone else who also has or could be as
strong for you to also start building another ‑‑ the same type
of relationship? What about an
additional outlet?
LISTNUM
1 \l 11998 Do
you think that your existing relationship with CTV can completely outweigh the
possibility of additional opportunities?
LISTNUM
1 \l 11999 MR.
STOHN: Well, I think to us, to Linda and
me, I mean I don't think we are looking at this as just having one outlet. I think the commitments that certainly I
heard yesterday, was that there was going to be a vibrant and increasingly
successful CHUM network with a separate program buyer and we have got our
existing relationships with CTV. So it
seems like almost the best possible situation.
LISTNUM
1 \l 12000 THE
CHAIRPERSON: You mentioned, basically,
only CTV can complement and I would like you to explain that. I find this kind of goes contra to us as far
as I am concerned.
LISTNUM
1 \l 12001 Surely,
you want to find a part of the market where you can compete and you can make a
lot of ‑‑ your suggestion that if CHUM was sold to somebody
else they would move to the centre, they would shed the City image and edginess
and just try to become another CTV, obviously that's a possibility but there
clearly is a market for CHUM. Otherwise,
CTV wouldn't want to have it.
LISTNUM
1 \l 12002 Secondly,
CHUM has been around a long time. It has
been very successful; of late, not so much but the question is whether that
market can't be explored more meaningfully with somebody with deeper resources.
LISTNUM
1 \l 12003 So
why are you automatically assuming that CHUM under a different owner would
gravitate towards the centre rather than exploring the established niche, if
you want to call it that, that CTV ‑‑ that City established?
LISTNUM
1 \l 12004 MR.
STOHN: The analogy that I used, I went
to university in a small town in Ontario which only had two radio stations and
they were both owned by different people and they both ended up sounding like
Hot AC contemporary stations. And that
was nice if you happened to like Hot AC and contemporary music, but if one
person owned both those stations in the market then it would seem, it just
seems to me both intuitive and economically the way it would happen is that
they would have one Hot AC contemporary station and another, perhaps a country
station or a niche station because why compete with themselves?
LISTNUM
1 \l 12005 So
that's why it is my view that if someone is owning two stations in a market, it
will be in their self‑interest rather than competing with and trying to
cannibalize themselves to really stretch out.
I think what you are saying is, well, isn't it in somebody else's
interest to do that as well.
LISTNUM
1 \l 12006 THE
CHAIRPERSON: Yes.
LISTNUM
1 \l 12007 MR.
STOHN: And to a certain extent, after
the middle has been occupied that may be that they are forced to the edges, but
the low hanging fruit will be that core middle audience that the advertisers
are really desiring and that they have been able to deliver and that's why CTV
has so many of the Top 20 shows already. People are going to want a share of
that pie.
LISTNUM
1 \l 12008 That's
my view in any event.
LISTNUM
1 \l 12009 THE
CHAIRPERSON: But your analogies and
casting back to your youth, different age, different time and much more
sophisticated, much more demanding audience; not many more platforms in a
fragmented market and urban market.
Doesn't that ‑‑ it is basically saying the middle
is ‑‑ the low hanging fruit is not that big anymore and that
all you can have is the off centre very successfully?
LISTNUM
1 \l 12010 MR.
STOHN: Certainly, we know that in the
specialty area that's exactly what has happened, so on the cable channels we
are seeing the success of the specialty channels that have arisen. But when we are still in the conventional
over‑the‑air space where there are a limited number of players, to
me it seems there that when you are appealing to the mass audience the tendency
will be to move towards the middle.
LISTNUM
1 \l 12011 THE
CHAIRPERSON: Okay.
LISTNUM
1 \l 12012 Rita,
you had a question? Oh, I am sorry. I apologize.
LISTNUM
1 \l 12013 COMMISSIONER
DEL VAL: So I am sorry. May I finish with my question?
LISTNUM
1 \l 12014 THE
CHAIRPERSON: Yes.
LISTNUM
1 \l 12015 COMMISSIONER
DEL VAL: Just because there is a lot of
concern from other intervenors on just the loss of the ‑‑ the
number of outlets and I think the panel before us here are established, you
know, by any stretch of the imagination but if you think on when you were
starting would it not be beneficial to have more doors to knock on, to have
just more strong outlets because the fact is that what is being asked before us
that will be created is a very, very large conglomerate and then you do think
about, you know, who are the others who could survive. There probably will not be that many. So then there would be diminished amounts of
players.
LISTNUM
1 \l 12016 I
mean, can you comment on the loss of outlets and do you see any benefit in sort
of creating opportunities for other strong outlets? Thank you.
LISTNUM
1 \l 12017 MR.
STOHN: If I can ‑‑ I
don't mean to monopolize this but what I am hearing you saying is that because
CTV CHUM between the two outlets will become so dominant that it may result in
other players having to leave the marketplace and I am not seeing that. I know that the Competition Bureau has looked
at this and said, no, no, there won't be that kind of dominant position.
LISTNUM
1 \l 12018 So
to me I am seeing the same players still in the marketplace and an even
stronger CHUM outlet as a result of this acquisition.
LISTNUM
1 \l 12019 MR.
WEINSTEIN: I am seeing this from an
entirely different point of view and, actually, it's sort of the opposite of
what you are saying in that CTVglobemedia is ‑‑ when I found
out about this possible acquisition I was actually quite terrified
because ‑‑ I told you a little bit about the trends in
classical music and performing arts and my first thought was, okay, well,
that's it. Bravo! is dead because a lot
of people will look at these trends.
LISTNUM
1 \l 12020 And
then I started speaking to the people there at Bravo! and at City and they were
having meetings with the people at CTV and they started having ‑‑
they started having this optimism and this ‑‑ and I
thought ‑‑ I didn't know what this was all about and then I
was talking to some of the CTV people and I realized there was this sincere
interest in preserving the distinct nature of the channels but also to really
promote culture. It is something that
CTV hadn't done as much and it was really exciting to them. This was really something that reassured me.
LISTNUM
1 \l 12021 And,
in fact, this whole question yesterday about edge. I mean, edge, edgy programming what does that
mean? Does that mean it's hip? Does it mean ‑‑ what does
that mean? But in a way, I mean, I make
classical programs. They are the least
edgy things if you think about them but it was about groundbreaking as well and
about pushing extremes.
LISTNUM
1 \l 12022 So
Bravo! was always really interested in the ideas that we are a little more
experimental or a little bit more political musical and these things did very
well. But the idea of ‑‑
when I realized ‑‑ I mean, Ivan Fecan's own interest in both
preserving the different nature of these channels but also of the love of
culture and the importance of that.
LISTNUM
1 \l 12023 What
it made me realize is the opposite, which is I didn't want just a monopoly in
culture in Canada. I have a wonderful
relationship with CBC but I also have a wonderful relationship with Bravo! and
the idea of one of those things disappearing terrifies me and, you know, for a
while there it looked like both were going to disappear in terms of culture but
I think that's not the case in either case.
LISTNUM
1 \l 12024 MR.
BUTT: Yes, I don't ‑‑
sorry, I was just going to say I don't really look at this as, you know if this
acquisition is allowed to take place, I don't look at it as there being fewer
doors suddenly. I look at it long term
as those existing doors that are out there have a greater chance of still being
there 10 or 15 years down the road and my fear is that without a strong
champion stewarding those, you know the keepers of those doors, those doors
might be boarded up in a few years.
LISTNUM
1 \l 12025 COMMISSIONER
CUGINI: Thank you.
LISTNUM
1 \l 12026 Well,
we certainly have covered a lot of ground this morning so I hope to not keep
you here for too much longer. But I do
have just a couple of questions on specifics and in particular for Ms Schuyler
and Mr. Stohn.
LISTNUM
1 \l 12027 You
spoke about the CTV ‑‑ BCE‑CTV benefits providing
financial, creative and marketing support of the websites for both Degrassi and
Instant Star and an array of new media initiatives. Who owns the rights to those initiatives?
LISTNUM
1 \l 12028 MR.
STOHN: We do.
LISTNUM
1 \l 12029 COMMISSIONER
CUGINI: So you are able to fully exploit
all the new media and ancillary rights?
LISTNUM
1 \l 12030 MR.
STOHN: Absolutely. So CTV has licensed certain rights during the
term of their television rights within Canada but in the foreign markets we control
those rights.
LISTNUM
1 \l 12031 COMMISSIONER
CUGINI: Okay, thank you.
LISTNUM
1 \l 12032 And
now for Rhombas, Sparrow and Epitome, all three of you are members of the
CFTPA?
LISTNUM
1 \l 12033 MR.
STOHN: Yes, thank you.
LISTNUM
1 \l 12034 MS
THOMPSON: Yes, and I just wanted to make
one point. Corner Gas has been fully
financed by the BCE benefits so the show, the website, all aspects of it. Well, until most recently. But let's just look at the first three
seasons. We own the rights to the
show. We own the rights to the
merchandising line, et cetera, et cetera, et cetera.
LISTNUM
1 \l 12035 What
is most fascinating to us, though, is that once the BCE benefits were finished
CTV continued to finance us in the same way post benefits. So they have covered, you know, up to 80
percent of our production financing budget since ‑‑ you know,
for the last five years with benefits and without and we have been able to
maintain copyright all the way through.
LISTNUM
1 \l 12036 COMMISSIONER
CUGINI: Of, again, all platforms?
LISTNUM
1 \l 12037 MS
THOMPSON: Yes.
LISTNUM
1 \l 12038 COMMISSIONER
CUGINI: On all platforms.
LISTNUM
1 \l 12039 Have
you had the opportunity to read the CFTPA intervention ‑‑
again, for all three of you and whoever would like to answer? And I would just like to know if you have any
comments on what the CFTPA has submitted as part of these proceedings since you
are members.
LISTNUM
1 \l 12040 MR.
STOHN: If I can make one comment, and
it's on terms of trade because I was actually very involved with the negotiation,
much more heavily involved than I wanted to be at the time because it went on
and on; the negotiation of the initial terms of trade agreement with the CBC.
LISTNUM
1 \l 12041 And
what I found about that was people ‑‑ you can look at terms of
trade in one of two ways. One is that
there is heavy bargaining on exact deal points and that tends to be ‑‑
but that's a little bit more the British model where it is almost mandated that
there be this kind of imposed relationship between broadcasters and producers.
LISTNUM
1 \l 12042 But
what we negotiated with CBC really opened the door to a much better
understanding between the two parties.
It was really setting the parameters of the relationship, making things
that had been obscure and transparent even within the CBC and, certainly,
between producers and the CBC as to how they operated, how their decision
making took place, what the turnaround times would be. So there was ‑‑ it turned
out to be a wonderfully illuminating experience. The CBC in the end made a website which made
it more open and transparent, all of its policies to all the producers.
LISTNUM
1 \l 12043 So
that aspect of the terms of the trade, you know, we think can only be
beneficial both to the broadcaster, in this case the CTV, and to the producers
because it just makes everything run that much more efficiently.
LISTNUM
1 \l 12044 MR.
WEINSTEIN: Sorry. I just wanted to clarify just for the record
that Sparrow Media is not a member of CFTPA.
My company is a loan out company just providing my services as a
creative entity.
LISTNUM
1 \l 12045 COMMISSIONER
CUGINI: Thank you. Thank you very much, Mr. Chairman.
LISTNUM
1 \l 12046 THE
CHAIRPERSON: Okay, thank you very
much. I think we will take a 15‑minute
break and then we will hear from those who are opposed close to the
transaction.
LISTNUM
1 \l 12047 Thank
you.
‑‑‑ Upon recessing
at 1057 / Suspension à 1057
‑‑‑ Upon
resuming at 1120 / Reprise à 1120
LISTNUM
1 \l 12048 THE
SECRETARY: Please be seated. Excuse me.
Please be seated.
LISTNUM
1 \l 12049 Thank
you, Mr. Chairman.
LISTNUM
1 \l 12050 We
will proceed to the next presentation by the intervenor Patrick Hurley.
LISTNUM
1 \l 12051 Mr. Hurley,
you have 10 minutes for your presentation.
Please go ahead.
INTERVENTION
LISTNUM
1 \l 12052 MR.
HURLEY: Mr. Chairman, Members of the
Commission, thank you very much for allowing me to come here personally to make
my presentation and to participate in the public process.
LISTNUM
1 \l 12053 After
listening this morning to all of the intervenors, positive intervenors,
listening to all the positive consequences of the proposed takeover, I am
afraid that you are about to hear a bit of a reality check. My concern is about the negative consequences
of such a takeover.
LISTNUM
1 \l 12054 This
year I celebrate my 50th year in broadcasting.
I believe you have a copy of my curriculum vitae. It has been a long and rewarding career,
beginning in 1957, radio station CFJB in Brampton, Ontario.
LISTNUM
1 \l 12055 It
ended abruptly when I was fired by Rogers Communications Inc. in September of
2002, not because of my performance but because I was over the age of 65. Ted Rogers, I might add, at that time was
72 years old, but he was the Chairman and I was just a sales
representative selling broadcast time for one of their many radio stations, The
Fan 590.
LISTNUM
1 \l 12056 Telemedia
had sold the station to Standard Radio in June of 2002 and Standard then
flipped it to Rogers.
LISTNUM
1 \l 12057 September
1 I was called to a meeting with the new sales manager to discuss my new
budget for the coming year. When I
arrived for the meeting, I saw the human resources person in the office with
the sales manager and I knew then what was about to happen. I said to her, "You are going to release
me, aren't you?" She smiled and
said, "We have to make some changes."
"Here I am, in the autumn of my career, performing as a top sales
representative, and you are going to fire me.
I have never been fired in my entire broadcast career. Why?"
LISTNUM
1 \l 12058 Two
weeks before I had just sold a promotion to a restaurant chain and a brewery
for $100,000 with no commercials, just promotion. When the Vice President of Programming
at Rogers heard about it, he came to my office to congratulate me. He shook my hand, saying that it was a great
sale, and now, two weeks later, here I was being fired.
LISTNUM
1 \l 12059 The
sales manager hastened to say that they had a package for me which the human
resources person handed me with a smile.
I turned to the sales manager and said "Why are you letting me
go?" All she would say was "We
have to make changes."
LISTNUM
1 \l 12060 I
asked other pertinent questions, but she would give me no answers.
LISTNUM
1 \l 12061 The
HR person then said, "You can call in the morning to make an appointment
to come and clear out your office."
So I said, "Well, why can't I get my things now?" "It is company policy", she
replied. "Just don't let them dump
all my files with all my personal information in it in my computer", I
asked.
LISTNUM
1 \l 12062 I
was then unceremoniously escorted out of the building like a convicted
criminal. I have never been so
humiliated in my life. This, the end of
what I believe was a distinguished broadcasting career as a sales representative,
a sales manager, a station manager and, finally, as a station owner of a radio
station where I started my broadcast career in Brampton, Ontario.
LISTNUM
1 \l 12063 I
had served the industry by serving on various committees of this CAB, I was a
Director of the Broadcast Executive Society for 10 years, I served as a
Director of the Radio Marketing Bureau for two years, and then two years as
Chairman of the Board.
LISTNUM
1 \l 12064 I
called the next day to make arrangements to come in and clear out my
office. I was told this had to be done
after hours so the other employees would not be upset seeing me there.
LISTNUM
1 \l 12065 I
met the Human Resources person and she escorted me to my office and I
asked if they had my files and personal information on a disk. I was told that they had accidentally deleted
it all. Even though I said that was
unacceptable, she just looked at me and shrugged her shoulders. Was it done on purpose? I think so.
LISTNUM
1 \l 12066 I
was the innocent victim of a takeover by one broadcast company by another which
was approved and sanctioned by the CRTC.
My story is the same as hundreds of other people who have worked in the
broadcasting industry here in Canada since the inception of the CRTC.
LISTNUM
1 \l 12067 In
my view, the mandate of the CRTC is to protect the public interest in terms of
programming to make sure there is a variety of programming to serve various
tastes of the listening and viewing public, but I also believe it is my view
that the CRTC has a mandate and an obligation to protect employees of the
broadcast operations from unfair treatment by station owners, because
broadcasting in Canada is controlled by the government through the CRTC. It is not like the private sector.
LISTNUM
1 \l 12068 I
believe the record shows that the CRTC, in my view, has failed miserably
through the years of its existence to protect the jobs of dedicated people who
work in these broadcast operations in both radio and television. Who comes first, the employees who create the
programs, entertain the audiences across Canada, or the shareholders whose
driving force, sole interest, is profits.
LISTNUM
1 \l 12069 These
channels and radio frequencies are public domain. They are not owned by the shareholders of the
broadcast operations which operate them.
They are licensed, not owned.
LISTNUM
1 \l 12070 Let's
look at the record and some of the consequences of takeovers during the
life of the CRTC.
LISTNUM
1 \l 12071 When
Allan Slaight was given permission by the CRTC to acquire Standard Radio,
hundreds of employees were let go to cut costs so he could afford to pay for
the cost of the acquisition. These were
hard‑working, qualified broadcasters who just wanted to do their jobs.
LISTNUM
1 \l 12072 As
a result, the record will show that there were over 200 false dismissal claims
filed by ex‑employees against Slaight Broadcasting as a direct result of
the takeover. These people had to pay
for their own legal fees just to get what they felt was fair severance. They also had to look for a new job with
other broadcast operations.
LISTNUM
1 \l 12073 I
am not aware of any action by the CRTC to intervene and protect these innocent
victims of the takeover by Slaight Broadcasting.
LISTNUM
1 \l 12074 The
CRTC granted a licence to Rawlco Communications to provide country music in
Toronto on a new radio frequency. This
licence was granted in spite of dissenting voices on the Commission at that
time. All the programming experts stated
at the time the licence was granted that it would attract a 3.5 share, not the
share projected by Rawlco at that time.
LISTNUM
1 \l 12075 Country
music, as most broadcasters know, is not a popular urban format. With good marketing, KISS‑FM got an
initial share of 7, but gradually dropped to 3.5 over the following
7 years that Rawlco operated the station.
LISTNUM
1 \l 12076 The
station was not allowed to change formats, as I understand it, for 7 years,
until the seven years had expired.
LISTNUM
1 \l 12077 The
same year as the commitment to country music expired, Rawlco sold the station
to Rogers Communication Inc. for a reported amount in excess of $80
million. The first thing Rogers did was
to change the format and fire many of the staff, including the on‑air
staff who had built the loyal following of country music listeners.
LISTNUM
1 \l 12078 Now
two things happened: Toronto
no longer had a country music station; and employees who had worked so
hard to make the station popular were out of a job. Did the CRTC intervene? Not to my knowledge.
LISTNUM
1 \l 12079 Rogers
had changed the format to attract a new audience. A year later employees were again fired as
the programming was a financial disaster and it did not attract the audience it
had hoped.
LISTNUM
1 \l 12080 The
programming format has been changed again.
These programming formats of course do not have to be approved by the
CRTC.
LISTNUM
1 \l 12081 Where
was the CRTC? Nowhere in sight.
LISTNUM
1 \l 12082 Who
benefited? In my view, the shareholders,
the Beaubien family members, by some $40 million.
LISTNUM
1 \l 12083 Now
let's turn our ‑‑
LISTNUM
1 \l 12084 THE
CHAIRPERSON: Mr. Hurley, you are reading
from your submission. We have read your
submission. I have let you read until
now because I wanted to see how loyally you follow your submission.
LISTNUM
1 \l 12085 I
would really appreciate it if you would take it that we have read this and tell
us with regard to the specific transaction what your objections are. That is really the purpose of your ‑‑
we have read your submission.
LISTNUM
1 \l 12086 So
can we come to this transaction and the proposed takeover of CHUM by CTV and
why you feel this should not be allowed by this Commission?
LISTNUM
1 \l 12087 MR.
HURLEY: Okay.
LISTNUM
1 \l 12088 I
was reading it because I felt that I had laid that out very clearly.
LISTNUM
1 \l 12089 THE
CHAIRPERSON: You have, but ‑‑
LISTNUM
1 \l 12090 MR.
HURLEY: You want me to
summarize it?
LISTNUM
1 \l 12091 THE
CHAIRPERSON: ‑‑ as I say, either summarize it or come right
to the issue of CTV‑CHUM.
LISTNUM
1 \l 12092 MR.
HURLEY: Okay. I was just about to start on that.
LISTNUM
1 \l 12093 May
I continue or do you want me to ‑‑
LISTNUM
1 \l 12094 THE
CHAIRPERSON: Sure. Go ahead.
LISTNUM
1 \l 12095 MR.
HURLEY: As I said, turning to
television. TSN was part of Netstar,
which was a thriving broadcast operation when CTV was allowed to take it over
by the CRTC. In my view, it was cash‑rich
and very profitable.
LISTNUM
1 \l 12096 I
worked at TSN for two years to turn their struggling radio division
around. It turned around for them and
retired two years later. I got to know
many of the people at TSN at that time, including Rick Brace.
LISTNUM
1 \l 12097 Who
benefited from this takeover?
LISTNUM
1 \l 12098 The
programming did not improve, so the viewers did not benefit.
LISTNUM
1 \l 12099 A
number of employees were once again fired to reduce overhead.
LISTNUM
1 \l 12100 The
sales staff went through quite an upheaval.
Imagine being a sales representative and not knowing what your sales
budget was until January, when the broadcasting year had started in
September. They didn't know what their
income was going to be and the stress on the sales representatives and their
families was untenable.
LISTNUM
1 \l 12101 Who
benefited? In my view, the shareholders
of the CTV.
LISTNUM
1 \l 12102 Now
we come to another issue: control and
consolidation of ownership in the broadcast industry.
LISTNUM
1 \l 12103 I
oppose this proposed takeover of CHUM Limited because it further reduces the
ownership of television stations in this country to a few. I'm sure others will raise the consequences
of this consolidation in more detail.
LISTNUM
1 \l 12104 My
major concern is the possible bias in news coverage. This is always denied, but the viewing public
is not stupid and they know the political leanings of the shareholders.
LISTNUM
1 \l 12105 CHUM
Limited, in my view, has been, since its creation by Allan Waters, one of the
best owned and operated broadcast operations in Canada bar none. He has maintained high standards in
programming, management and employee relations.
In the industry, it was the company everyone wanted to work for.
LISTNUM
1 \l 12106 Since
the announced takeover by CTVglobemedia, several hundred employees have been
given their pink slips.
LISTNUM
1 \l 12107 Why? Even before approval by the CRTC? I don't know.
LISTNUM
1 \l 12108 Could
it be Bell Globemedia will not have to pay out all these employees? I don't know that either.
LISTNUM
1 \l 12109 Was
the company suffering such losses that jobs had to be cut?
LISTNUM
1 \l 12110 The
big question is: How many more people
will lose their jobs if this proposed takeover is approved by the CRTC?
LISTNUM
1 \l 12111 THE
SECRETARY: Excuse me, Mr. Hurley,
your 10 minutes has expired so I would ask you maybe to conclude.
LISTNUM
1 \l 12112 MR.
HURLEY: Okay.
LISTNUM
1 \l 12113 I
personally believe the viewing public will be shortchanged just as it has been
in the past with all takeovers. Much is
promised but little improvement is evident after the takeover.
LISTNUM
1 \l 12114 Employees
are the ones who will bear the brunt of the upheaval and will suffer the
most. In spite of denials, there will be
hundreds of jobs eliminated to immediately reduce his overhead to help pay for
the cost of the acquisition. This is the
clear pattern established and documented when takeovers take place in the
private sector.
LISTNUM
1 \l 12115 Therefore,
in conclusion, I ask that the Commission give serious consideration to the case
I have made on behalf of all employees of CHUM Limited and deny this
application outright.
LISTNUM
1 \l 12116 Such
a decision by the Commission would also send a clear message to individuals
like myself who work and love the broadcast industry that the Commission has finally
taken into consideration the rights of hard‑working and dedicated
broadcast employees in this country who lose their jobs because of decisions by
the Commission.
LISTNUM
1 \l 12117 THE
CHAIRPERSON: Stuart?
LISTNUM
1 \l 12118 COMMISSIONER
LANGFORD: Thank you. Mr. Hurley.
LISTNUM
1 \l 12119 I
did read all of your intervention, by the way, so even though you didn't have
time to get it all on the record today it is on the record. I want you to know that it will be part of
the permanent record of this proceeding.
It is there.
LISTNUM
1 \l 12120 I
have a problem, though, with what you are suggesting I might as well just
put it on the table.
LISTNUM
1 \l 12121 This
deal is done. I mean, we haven't
approved our regulatory aspect of it, but the Waters family, as I understand
it, has sold. They have sold to
CTVglobemedia.
LISTNUM
1 \l 12122 It
is up to us as to whether we allow the structure as Mr. Fecan has said is his
preference ‑‑ and I won't review that, but you know what they
want. They want the radio and the
specialties and some of the television channels, divest of some of the others,
or whether we allow some alternative of that.
But it is highly unlikely that we would ‑‑ that anyone
would tolerate us ‑‑ this is my view. I'm only speaking for myself here ‑‑
just saying no, and particularly just saying no on the grounds that some
employees will be laid off.
LISTNUM
1 \l 12123 I
don't want you to think that we are insensitive to the pain of people like
you. I felt your pain when I read this
thing. I think, you know, you must have
felt, as you said, humiliated, and nobody wants to go through that.
LISTNUM
1 \l 12124 So
it's not that I didn't feel your pain, but people who own assets ‑‑
I don't want to sound like I'm being patronizing here ‑‑ but
they have the right to sell it, whether it is a car or a painting or a house or
company. Other people who buy it have a
right, then, to structure it. And yes,
there is going to be some pain when that is restructured.
LISTNUM
1 \l 12125 So
that if you buy a company that has, because of the way it fits with your own
company, too many salespeople or too many advertising people were too many
programmers, unfortunately there is going to be some re‑engineering.
LISTNUM
1 \l 12126 You
are quite right, there is going to be some pain on a personal basis but, you
know what, fortunately or unfortunately ‑‑ I happen to think
it's fortunate because I don't really feel I have the ability to deal with
those kinds of questions, frankly, personally ‑‑ we can't do
anything about that. That's our problem.
LISTNUM
1 \l 12127 So
we understand your pain and we don't take it lightly.
LISTNUM
1 \l 12128 I
think you might be gratified ‑‑ I don't know if you were in
the room yesterday and I don't want to appear to be making CTV's case for them,
but I think they genuinely understand this pain, too. I have the feeling that no matter how this
goes they are not just going in there to slash and burn people's lives, that
they are going to try as hard as they can to use people.
LISTNUM
1 \l 12129 If
you were here yesterday you would have seen that their team already composed of
some CHUM people. It wasn't just a CTV
team and CHUM sitting in a back in room.
We had Mr. Ski here, who is doing his thing for radio, and different
people on the team, I saw Mr. Goldstein over there taking notes. So obviously these people, it appears, are
being worked into the bigger picture.
Not everybody is going to go, but you are right, some people are going
to go.
LISTNUM
1 \l 12130 Anyway,
I have gone on too long. I want you
to know that we have read your stuff, we have heard you today, we have huge
sympathy for you and I think the people involved in this deal have the
same sympathy. I mean, we heard people
talk very, very eloquently yesterday about how these teams hope
to work together and how many of them hope they can find a career
there. But you are dead right, not all
of them will.
LISTNUM
1 \l 12131 Unfortunately,
that is just not what we do. But we
appreciate you bringing it to our attention, we really do, it is just not what
we do. We don't have the jurisdiction to
step in and stop sales on the grounds that there may be some restructuring and
personal pain.
LISTNUM
1 \l 12132 MR.
HURLEY: Is there any reason why the
company that has purchased the shares of CHUM Limited cannot be told to operate
the company as a separate entity rather than have it been taken over
by CTVglobemedia?
LISTNUM
1 \l 12133 COMMISSIONER
LANGFORD: Well, from a programming side
that is what we are wrestling with right now, from the side of what people will
see in their living rooms on television and what they will hear in their cars
on the radio.
LISTNUM
1 \l 12134 Yes,
we do have some jurisdiction there and there is a lot of to‑ing and fro‑ing
right now between the Panel you see in front of you and the applicants who have
come before this Panel. We are pushing
for a little extra and we are pushing for more, but when it comes down to John
Doe or Harriet Smith who work as receptionists or salespeople or in advertising
where there will be duplication, no, we don't go there. That is not our bailiwick. We feel the pain, but we can't go there.
LISTNUM
1 \l 12135 MR.
HURLEY: No, no, I understand.
LISTNUM
1 \l 12136 THE
CHAIRPERSON: The answer to your specific
question, the company is now being held by a trustee pending his approval.
LISTNUM
1 \l 12137 MR.
HURLEY: Yes.
LISTNUM
1 \l 12138 THE
CHAIRPERSON: If it doesn't get approved,
the trustee will have to sell it to somebody else. The trustee is not going to operate the
company.
LISTNUM
1 \l 12139 MR.
HURLEY: I understand that.
LISTNUM
1 \l 12140 My
question is: Obviously I get the
impression that they Commission feels, and the case has been very well
presented here, that rather than have it sold to someone else, an unknown, that
CTV Bell Globemedia is probably the best option.
LISTNUM
1 \l 12141 Is
that what ‑‑
LISTNUM
1 \l 12142 COMMISSIONER
LANGFORD: We are not going to say
that. I hate to see Mr. Fecan up and
dancing this early in the proceedings.
‑‑‑ Laughter
/ Rires
LISTNUM
1 \l 12143 COMMISSIONER
LANGFORD: So we will keep the dancing
until later.
LISTNUM
1 \l 12144 But
that is what we are discussing, what will happen and what will happen to the
pieces.
LISTNUM
1 \l 12145 You
know: Are we happy? In a sense we are not happy. I mean, this is a wonderful company that has been
a huge part of Canadian broadcasting at every level but, on the other hand, we
have heard from the people who know the company best that the time has come.
LISTNUM
1 \l 12146 I
mean, Mr. Fred Sherratt is not a happy guy today in a lot of ways, you
know. We don't have to have a tag
sale for him, so don't worry about that ‑‑
LISTNUM
1 \l 12147 MR.
HURLEY: No, that's for sure.
LISTNUM
1 \l 12148 COMMISSIONER
LANGFORD: ‑‑ But he is not a happy guy in the sense of his
own personal history, and yet he sees the writing on the wall and he has been
very clear about it.
LISTNUM
1 \l 12149 So,
as the Chairman just said, this company is going to be sold, it is just to
whom.
LISTNUM
1 \l 12150 So
anyway, as my kids would say, thanks for coming out. We heard you loud and clear and we share
a lot of your sympathies and we will do our best.
LISTNUM
1 \l 12151 MR.
HURLEY: Thank you very much.
LISTNUM
1 \l 12152 THE
CHAIRPERSON: If there are no other
questions, let's go on to the next intervention.
LISTNUM
1 \l 12153 Madam
Boulet.
LISTNUM
1 \l 12154 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 12155 I
would now as the next appearing intervenor the Communications, Energy and
Paperworkers Union of Canada, Mr. Peter Murdoch, to please come forward.
LISTNUM
1 \l 12156 COMMISSIONER
LANGFORD: Mr. Hurley, you can step down,
relax and join the spectators there and we will have the next intervenors.
LISTNUM
1 \l 12157 Thank
you.
‑‑‑ Pause
LISTNUM
1 \l 12158 THE
SECRETARY: Mr. Murdoch, when
you are ready for your presentation if you could introduce your panel and
you will have 10 minutes for your presentation.
INTERVENTION
LISTNUM
1 \l 12159 MR.
MURDOCH: Thank you and
good morning.
LISTNUM
1 \l 12160 My
name is Peter Murdoch, I am Vice President, Media for the Communications,
Energy and Paperworkers Union of Canada.
I have with me CEP's counsel, Monica Auer, who is to my left.
LISTNUM
1 \l 12161 CEP
represents approximately 25,000 members in the media at Canada's radio
stations, newspapers, magazines, television and film industries.
LISTNUM
1 \l 12162 In
television we represent employees at CHUM as well as CTV.
LISTNUM
1 \l 12163 We
have two major points.
LISTNUM
1 \l 12164 The
first is that CTV hasn't met the burden of the CRTC's ownership test.
LISTNUM
1 \l 12165 The
second is that if granted the application's significant negative effects will
be difficult to reverse.
LISTNUM
1 \l 12166 Our
first point is that even with CTV's new annual zero overlap promise its
application doesn't meet the ownership test.
LISTNUM
1 \l 12167 Our
written intervention listed almost 40 questions raised by the application. CTV hasn't answered most of those, or many of
yours, and hasn't denied its failure to meet the test. It hasn't met the ownership's test first part
since it hasn't shown that this is the best possible application under the
circumstances. Instead, it is saying
"Trust us, we believe in Canadian programming." I am reminded of an old expression,
"Don't tell me what you believe, tell me what you do and I will tell you
what I believe."
LISTNUM
1 \l 12168 As
of last night, CTV wouldn't even commit to 30 more minutes per week of original
local content, original news or continuing original Canadian drama. We don't know what their plans are.
LISTNUM
1 \l 12169 Rather
than imaginative programming proposals, CTV is either handing us a status quo,
an edgier status quo, or maybe even less than the status quo if the zero
overlap promise allows non‑overlapping repeats in or outside the year.
LISTNUM
1 \l 12170 While
CTV says creative people are key to his edgier plans for CHUM, we wonder just
who CTV has in mind since CHUM dropped at least 344 full and part‑time
positions between late 2003 and 2006.
LISTNUM
1 \l 12171 We
wonder, is CTV really prepared to hire any of these positions back if half an
hour of new Canadian programming threatens CHUM's viability?
LISTNUM
1 \l 12172 As
for CTV's self‑proclaimed status as CHUM's white knight, we think it's
evidence is dubious. CHUM's own annual
reports are far more positive, recording:
"...a significant improvement
in operating results in fiscal 2005 over 2004 due to broadcasting." (As read)
LISTNUM
1 \l 12173 Frankly,
if this is the best use of more than 60 valuable licences, then Canadian
broadcasting really is in sad shape.
Settling for these meagre proposals because they are all you have, does
not meet the test.
LISTNUM
1 \l 12174 CTV
hasn't met the second part of the test about ownership concerns because
promising to maintain separate presentation styles still allows reporters to
share stories and resources and, indeed, with questions I might tell you in
fact encouraged.
LISTNUM
1 \l 12175 CTV's
journalistic safeguard won't protect editorial diversity because it
can't. Different management and
distinctive graphics won't increase full‑time news staffing levels
or foster competition between journalists working for the same owner
with the same cost‑cutting concerns and the same deadlines.
LISTNUM
1 \l 12176 Gatekeeping
will still be a problem, for three reasons.
LISTNUM
1 \l 12177 First,
those who hire, hire like‑minded people who fit the corporate culture.
LISTNUM
1 \l 12178 Second,
CTV's manager and staff know who signs their cheques.
LISTNUM
1 \l 12179 Third,
as the old saying goes, those who pay the piper pick the tunes.
LISTNUM
1 \l 12180 We
think this analogy works in broadcasting because of the results from a recent
survey of Canada's working journalists.
I can supply you with a summary of this study and the appropriate
questions I quoted here. We just
released it to our members on the weekend.
LISTNUM
1 \l 12181 Among
more than 800 responses, fewer than a third agreed that the editorial agenda
was not affected by the politics of their company's corporate owners. Almost half agree that advertisers influence
editorial decisions. Two‑thirds of
broadcast journalists said they had been assigned stories to promote their
station or management at least once. And
more than three‑quarters of the respondents agreed that promotional
consideration affect the news agenda.
LISTNUM
1 \l 12182 Recent
empirical research from the U.S. found the media grow less critical of
themselves after merger. If large media
groups won't study themselves critically, what else are they missing?
LISTNUM
1 \l 12183 There
is some evidence that ownership affects broadcast content in this country. Six months after buying CTV, BCE replaced four
separate newscasts in Northern Ontario with one regional program. Weekly original local programming content has
disappeared almost all together from CTV's current schedule for Northern
Ontario.
LISTNUM
1 \l 12184 If
central problem obviously is that CTV hasn't define diversity but, as Ivan
Fecan said yesterday, if you can't measure it, you can't manage it. Perhaps more to the point, you can't enforce
it.
LISTNUM
1 \l 12185 But
even measurable safeguards can be breached, since CHUM itself breached the conditions
of licence for original local news in Vancouver in 2006.
LISTNUM
1 \l 12186 Overall,
since CTV hasn't shown that its giant, economy‑sized plans for journalism
will safeguard, let alone strengthen diversity, it hasn't met the second part
of the test.
LISTNUM
1 \l 12187 CTV
also hasn't shown that its application is in the public interest, since instead
of evidence it simply claims over and over that it needs to grow to do more for
Canadian programming, but what, we just don't know. If size or the answer to Canadian content,
CTV should have solved this problem long ago.
LISTNUM
1 \l 12188 But
more concentrated ownership hasn't produced a more and better Canadian content
or more and better local original content.
Quite the reverse. As
concentration of ownership has grown, so too has spending on foreign content,
outstripping spending on Canadian programs.
CTV's own projections show that in 2008‑2009 it plans to spend
58 percent more on foreign programming that on Canadian programs.
LISTNUM
1 \l 12189 But
what really matters is that we don't know what CTV will or won't keep in CHUM's
schedule, how fewer staff will generate more original content or how CTV will
improve local news on the stations it wants to buy. We just simply do not know what the plans
are.
LISTNUM
1 \l 12190 There
is no one‑size‑fits‑all definition of "the public
interest", but an application without one subsequent plan to increase
original Canadian content surely does not meet the definition by anyone's
standard.
LISTNUM
1 \l 12191 CTV
hasn't shown how its application will meet the fourth part of the
ownership test because its on‑air benefits for our system are, at
best, unclear and, at worst, almost non‑existent. When TQS bought Cogeco's TV stations in 2001,
more than $9.00 out of every $10 in benefits were directed to the screen.
LISTNUM
1 \l 12192 CTV's
benefit for the system is "more efficient spending on non‑Canadian
programming and lower non‑Canadian programming costs".
LISTNUM
1 \l 12193 Although
CTV has attempted to convince many that it will protect our system
from foreign and other competition, the fact is that non‑Canadians
can't hold licences and carriage and simulcasting will still protect
Canadian TV broadcasters.
LISTNUM
1 \l 12194 Our
system doesn't need cheaper foreign programming, it needs more original
Canadian content from more sources.
LISTNUM
1 \l 12195 Our
second main point is that the application's negative effects on competitive
news gathering may be irreversible until CTV itself decides to sell to the
highest bidder. Their problem is
this: Once a predator is released it is
hard to entice it back into a cage or to make it live by new rules.
LISTNUM
1 \l 12196 It
seems to us, with all due respect, that you have four options.
LISTNUM
1 \l 12197 The
first is the simplest: Grant CTV's application
as filed.
LISTNUM
1 \l 12198 Although
2000 interventions support this, often for similar reasons, we don't think that
well‑informed, reasonable people would agree that this application serves
the public interest. We think they would
ask why CTV expects the CRTC to put the financial interests of two private
companies ahead of Canadians' interest in a competitive marketplace of ideas.
LISTNUM
1 \l 12199 Some
intervenors would support the application, but with conditions precedent. The question is whether this would be fair to
CTV, whose business plan is based on the application it filed. Conditions precedent don't address the more
fundamental problem that unless diversity can be measured, safeguards can't be
enforced.
LISTNUM
1 \l 12200 The
third option is to briefly postpone this decision until after the fall
ownership policy hearing. We think any
harm to CTV or CHUM would be outweighed by the benefits to the public interest.
LISTNUM
1 \l 12201 Postponement
would grant all broadcasters equal treatment, not just the ones who are
quickest to the post. A delay would also
give everyone the chance to collect information about the effects of
concentration of ownership and time for analysis. It are view, this might be the best option.
LISTNUM
1 \l 12202 Finally,
you could deny CTV's application because it leaves too many questions
unanswered. We all know that the
broadcasting system and broadcasters have survived when other ownership
transactions have been denied.
LISTNUM
1 \l 12203 We
strongly recommend that you postpone your decision in this proceeding, but if
delay isn't possible we urge you to deny this application because CTV hasn't
answered our questions, the questions for Canadians and, more importantly,
hasn't answered many of your questions.
LISTNUM
1 \l 12204 Thank
you for your time.
LISTNUM
1 \l 12205 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 12206 You
are making a lot of points.
LISTNUM
1 \l 12207 Let
me just say at the outset, your preferred option of postponing, as you know we
have specifically rejected that, for the simple reason that, you know, we are
not in the business of killing deals. I
don't think deals of this magnitude you can ask them to hold in abeyance for
that long. It is just the business
reality is different. People have to
plan, and they have to get ready for the next schedule, et cetera, and it
would lead to a tremendous loss of value in the assets which are not
necessarily of commensurate gains.
LISTNUM
1 \l 12208 I
told you that part in correspondence and I have told you publicly, we are going
to do this deal on the basis of our rules as they are right now.
LISTNUM
1 \l 12209 That
being said, you made some very interesting points and I would like you to
elaborate on them.
LISTNUM
1 \l 12210 Your
first one was on editorial diversity. If
I understand it, essentially you can't have editorial diversity unless you have
separate owners. If you have the same
owner you are not going to have editorial diversity.
LISTNUM
1 \l 12211 I
believe that is, in essence, the nub of your position.
LISTNUM
1 \l 12212 Is
that correct?
LISTNUM
1 \l 12213 MR.
MURDOCH: Yes. Let me say that it seriously puts diversity
in jeopardy. We have seen that in a
number of ‑‑ particularly across media ownership.
LISTNUM
1 \l 12214 Let
me just kind of ‑‑ it used to be if you were at the Globe and
Mail and you offered a story to CTV, you would be fired for it. Now you are rewarded for it. So I think it is very, very difficult to have
diversity.
LISTNUM
1 \l 12215 I
think, Mr. Chair, all you need to do is sort of ‑‑ I know you
are aware of the newspapers. The Post
and CanWest is a different organization, with different values, different
principles than, say, the Toronto Star.
That ideology, those principles, those political positions, move their
wear down into newsrooms, sometimes for political reasons, sometimes for niche
marketing reasons, but it does happen and it is based on ownership, ownership
trying to find their market, their market in a democratic debate.
LISTNUM
1 \l 12216 THE
CHAIRPERSON: Were you hear
yesterday? Were you here yesterday
during the hearing?
LISTNUM
1 \l 12217 MR.
MURDOCH: I'm sorry?
LISTNUM
1 \l 12218 THE
CHAIRPERSON: Were you here yesterday
during the hearing?
LISTNUM
1 \l 12219 MR.
MURDOCH: Yes, I was. Yes.
LISTNUM
1 \l 12220 THE
CHAIRPERSON: I asked Mr. Fecan exactly
about that and he gave a very eloquent answer about, you know, it is in his
interest to be diverse, to cover as much markets as possible. By reigning in journalists he is really not
doing himself a favour. That was
essentially his point.
LISTNUM
1 \l 12221 His
journalists, the various editors will decide whether to share stories or
whether to send out separate journalists to cover events, because only that way
can he serve the very diverse markets that we have in Canada.
LISTNUM
1 \l 12222 I
gather you don't except that line of reasoning.
LISTNUM
1 \l 12223 MR.
MURDOCH: No. I mean initially it strikes me a bit as
though a monopolistic practice is the way to ensure diversity, because you will
spread the marketplace with a variety of products, a kind of Wal‑Mart
view of the economy.
LISTNUM
1 \l 12224 No. I think that ownership brings with it the
power and authority, over all employees to some degree, including
journalists. In the long run people
understand what it is that the ownership is looking for. I don't think that ‑‑ let me
put it in another way.
LISTNUM
1 \l 12225 I
don't think that the people who work at the Montréal Gazette or the Ottawa
Citizen have a clear ‑‑ they have as clear understanding about
what CanWest's ideals are and what their politics are as do the people at BCTV
and Global Toronto. I think the same
thing ‑‑ and those are different, different platforms. I think the same thing is more likely to
happen where the platforms are the same.
LISTNUM
1 \l 12226 THE
CHAIRPERSON: All right.
LISTNUM
1 \l 12227 Do
you ‑‑
LISTNUM
1 \l 12228 MR.
MURDOCH: Just excuse me if I can, Mr.
Chair.
LISTNUM
1 \l 12229 THE
CHAIRPERSON: Yes.
LISTNUM
1 \l 12230 MR.
MURDOCH: One of the problems I have here
with Mr. Fecan's remarks is: If he
believes this, where are the plans and the ideas to foster this? All he is telling the Commission and all he
is telling Canadians is, "Trust us.
We kind of believe in it."
LISTNUM
1 \l 12231 I'm
sorry, I don't think it is good enough.
LISTNUM
1 \l 12232 THE
CHAIRPERSON: When I questioned him about
this he talked about separate news management and I said "Why don't you go
one step further and go separate news gathering, which is what we have imposed
in the Québec market on Québecor?"
He basically said "No, that is not really a viable option because
journalists, being what they are, they don't like being told and the best way
for an owner is don't get involved in the news side at all. Tell them they are free and let them work it
out, let them decide whether to share or not."
LISTNUM
1 \l 12233 I
gather you don't agree with that either?
LISTNUM
1 \l 12234 MR.
MURDOCH: No. First of all, let's remember that
Mr. Péladeau has very recently said that he doesn't want that Code of
Conduct to apply any more, so we are aware that it is difficult to site that
when the person that was obligated to is saying "I want to renege on my
commitments."
LISTNUM
1 \l 12235 But
no, I don't. I mean, I think that what
we need is competitive debate. What we
need is actually journalists to compete with each other and to fund newsrooms,
to fund news gatherers, to get the people out there finding out different kinds
of information, to be competitive in the marketplace, so that Canadians over
their kitchens and at their picnics can say, "You know, I read this. I saw this on CTV. I saw this on CHUM. I read this in the Globe and Mail", so
that there is true diversity of news, information and opinion.
LISTNUM
1 \l 12236 I
don't think that happens with same ownership.
LISTNUM
1 \l 12237 THE
CHAIRPERSON: Okay. Then you mentioned gatekeeping.
LISTNUM
1 \l 12238 Could
you elaborate on what you meant by "gatekeeping"?
LISTNUM
1 \l 12239 MR.
MURDOCH: Let me just get back here.
‑‑‑ Pause
LISTNUM
1 \l 12240 MR.
MURDOCH: Yes, I mean ‑‑
LISTNUM
1 \l 12241 THE
CHAIRPERSON: What I took down is that
people hire like people and basically as a result of this CTV's owners will
hire the type of people they like rather than ‑‑ I assume that
is where you are going with that?
LISTNUM
1 \l 12242 MR.
MURDOCH: Right. I don't think it's ‑‑ well,
it probably is that, too.
LISTNUM
1 \l 12243 But
certainly there is an expectation of points of view. There is an expectation of style, there is an
expectation of look, and there is an expectation of political points of view.
LISTNUM
1 \l 12244 I
think I would be very surprised if CTV hired, no matter how brilliant,
some wild‑eyed lefty.
LISTNUM
1 \l 12245 So
yes, I think there is a hiring practice that the corporation tends to hire
within its image. I don't think there is
one company that is unique in the course of doing that. In fact, I think ‑‑ anyway.
LISTNUM
1 \l 12246 And
I think that people who they do hire know who is paying the cheques. So if I know what ‑‑ it's
just easier for me to use CanWest.
LISTNUM
1 \l 12247 If
I know what Mr. Asper's political point of view is ‑‑
and, by the way, he will certainly let me know ‑‑ I know
within a certain framework I am expected to at least echo those.
LISTNUM
1 \l 12248 The
third thing is that there is a sense of loyalty to the corporation.
LISTNUM
1 \l 12249 So
it is very, very difficult to meet. I
can see as a kind of gatekeeping to ensure diversity. Diversity of opinion comes out of the
competitive marketplace. That is where
you really see it, at least in the news and information part of the
game.
LISTNUM
1 \l 12250 THE
CHAIRPERSON: I raised yesterday the
issue of self‑censorship. I gather
you are saying that in different words.
If I am an employer for CanWest, then I am going to write something that
falls within the general line of the owner, to take your example.
LISTNUM
1 \l 12251 MR.
MURDOCH: Yes, absolutely.
LISTNUM
1 \l 12252 By
the way, I'm not suggesting that ‑‑
LISTNUM
1 \l 12253 THE
CHAIRPERSON: We are not picking on
CanWest.
LISTNUM
1 \l 12254 MR.
MURDOCH: Yes. I'm not suggesting this goes on every day,
you know.
LISTNUM
1 \l 12255 But
what we do know is that where there is competition that chances are, if the
Finance Minister gives a budget, I can assure you the National Post is going to
have a different spin on that then the Toronto Star. That is a good thing, by the way, on both of
those, and it is there because they are competing. They are true competitors.
LISTNUM
1 \l 12256 THE
CHAIRPERSON: You mentioned a study that
you just ‑‑ have you furnished a copy of that study to us?
LISTNUM
1 \l 12257 MR.
MURDOCH: No. We just released it on the weekends in
St. John's, Newfoundland to our members.
I will furnish you with a summary of the copy and the ‑‑
and the questions that I have referred to here.
LISTNUM
1 \l 12258 THE
CHAIRPERSON: And who conducted the study
for you?
LISTNUM
1 \l 12259 MR.
MURDOCH: We did a study in conjunction
with Ryerson and McMaster University. We
surveyed news rooms across the country ‑‑ our news rooms
across the country, and we had about 850 respondents, and ‑‑
LISTNUM
1 \l 12260 THE
CHAIRPERSON: Okay. And, finally, you went to the big league
programming. You mentioned northern
Ontario and that there has been a reduction and, in effect, that you are
expecting ‑‑ you were expecting in this application to see a
commitment to ‑‑ to local programming or a reversal of the
situation in northern Ontario.
LISTNUM
1 \l 12261 It
caught me somewhat by surprise. Tell me
what happened in northern Ontario first of all.
And, secondly, what you would have wanted ‑‑ expected
to see in the CTV application regarding local programming.
LISTNUM
1 \l 12262 MR.
MURDOCH: There were, and I've just got
to jog my memory, there were services provided out of three communities I can
remember. I think it was Timmins,
possibly Masson, and I'm sorry I can't recall, that were withdrawn.
LISTNUM
1 \l 12263 And,
you know, CTV suggested, of course, that it was in longer economically feasible
to do this, and that they would be able to provide the same kind of service out
of a central station.
LISTNUM
1 \l 12264 Our
problem with ‑‑ and surely, as you know, in terms of let alone
local news gathering, there's almost no local programming in the sense that
there used to be, you know, the Galloping Gourmet here in Ottawa, or Tales of
the Klondike or ‑‑ you name it, right across the country.
LISTNUM
1 \l 12265 Those
shows have disappeared off the airwaves almost.
LISTNUM
1 \l 12266 So
what we're concerned about now is to ensure that the news gathering part and
the ‑‑ and particularly local news and information, remains as
part of the obligations of ‑‑ of broadcasters.
LISTNUM
1 \l 12267 If
we see through consolidation and concentration the ability for broadcasters to
further erode that, it is grave concern to us, to our members, and I think to
Canadians.
LISTNUM
1 \l 12268 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 12269 My
fellow Commissioners, do you have any questions for Mr. Murdoch?
LISTNUM
1 \l 12270 Stewart?
LISTNUM
1 \l 12271 COMMISSIONER
LANGFORD: It's a question that the
Chairman has put to a number of people, and maybe I should have just trusted
him if he didn't put it to you, he must have had some reason, but I'll pick up
on it anyway, take a chance.
LISTNUM
1 \l 12272 The
problem with what you're suggesting is that this company is sold. And so what's your alternative here?
LISTNUM
1 \l 12273 I
mean, when you look at what confronts us here, somebody's going to get pieces
of it, not quite all of it I don't think.
I mean, I suppose anything is possible.
But somebody ‑‑
LISTNUM
1 \l 12274 If
CTV is somehow so constrained by us that they just want out of the deal, that
it's not worth it any more, the benefits are too high, and they don't have
enough for economies of scale, then their only option at this point ‑‑
the Waters don't want it back, and they're not going to take it back.
LISTNUM
1 \l 12275 So,
as of this moment really, the likelihood of CHUM existing, as it has existed,
is just about zero. And what may exist
is pieces.
LISTNUM
1 \l 12276 And
I'm not sure what comfort you would get from the pieces going to unknown
players, or us gathering here again in a month because "X" had bought
one piece, or "Y" had bought another.
LISTNUM
1 \l 12277 Which
doesn't mean it is a slam dunk for CTV, because what we have to wrestle over
now is what conditions we can put on it to try to achieve some of the same sort
of goals that you're speaking about.
Which, interestingly enough, are some of the same goals that CTV spoke
about yesterday.
LISTNUM
1 \l 12278 So
we're all talking about the same thing here.
LISTNUM
1 \l 12279 And
I guess what I'd like to hear from you more is rather than put it off, which
the Chairman has rightly said isn't going to happen because we're here. Rather than deny it, which I think really is
a mug's game because it's just going to go to someone else if we deny it.
LISTNUM
1 \l 12280 What
can we do ‑‑ what can we put in place to get some of the goals
you want, but allow something like this deal to go through?
LISTNUM
1 \l 12281 What
would you suggest?
LISTNUM
1 \l 12282 MR.
MURDOCH: Well, I don't think that ‑‑
that CTV should automatically get the green light because, as you know, Mr.
Fecan characterizes CTV in some ways yesterday as a kind of Mother Teresa of
the Canadian Broadcasting System and brings $1.75 billion to helped the
afflicted.
LISTNUM
1 \l 12283 Clearly
what we don't know here is what other proposals are possible. What other proposals were out there.
LISTNUM
1 \l 12284 The
idea that CTV is the only possibility is, in fact, incredulous to me.
LISTNUM
1 \l 12285 What
we do know, in fact, is that there is a very competitive market out there for
media companies in this country, and the financing clearly available to it.
LISTNUM
1 \l 12286 So ‑‑
and remember that along with the company, we are buying and selling
licenses. Not companies.
LISTNUM
1 \l 12287 And
so ‑‑ so I'd like to have known what else is out there, and
known what it is CTV is actually planning to do, other than simply saying,
"Trust us, we're big."
LISTNUM
1 \l 12288 COMMISSIONER
LANGFORD: Well, if you were here
yesterday, you know we pushed pretty hard on that, and they may or may not come
back with the homework we assigned them.
LISTNUM
1 \l 12289 I
certainly would repeat that I'd advise them to, but nobody has to ‑‑
nobody has to add anything to an application.
They can let it stand or fall on its own merits. They may or may not add something.
LISTNUM
1 \l 12290 But
along the lines of what we're pushing, do you think, then, generally speaking,
maybe it's not fair to ask you to come up with a whole formula, but do you
think that with some toing‑and‑froing and pushing and pulling we
could whip this into shape?
LISTNUM
1 \l 12291 For
example, let me ask you a big question:
Would you feel more comfortable if they were buying the A Channels,
keeping them, and divesting of City?
LISTNUM
1 \l 12292 Are
you more troubled because they're buying City instead of the A Channels?
LISTNUM
1 \l 12293 I'm
trying to get a sense of what really troubles you here.
LISTNUM
1 \l 12294 MR.
MURDOCH: Right.
LISTNUM
1 \l 12295 What
troubles me is that we were not ‑‑ Canadians have not been
provided with the kind of information about what they plan to do with this
company, by the way, which was once new itself, which prospered through some
very creative and very good management.
LISTNUM
1 \l 12296 And
the idea of us simply saying that it's going to be rescued by CTV, and now for
you to ask me, well ‑‑ and I want you to know what would make
you most comfortable in terms of the rescue package. I'm afraid I'd say, you know what would make
me most comfortable, tell me what they're going to do. Tell me what the rescue is. I don't know what it is, and neither do
Canadians.
LISTNUM
1 \l 12297 COMMISSIONER
LANGFORD: Okay. So you want more details is what you're
saying? I mean, that would at least
be ‑‑ that's the road we should start down.
LISTNUM
1 \l 12298 Do
you agree we started down that road yesterday or would you ‑‑
LISTNUM
1 \l 12299 MR.
MURDOCH: You know, I was impressed. You certainly tried. I don't think you got very far.
LISTNUM
1 \l 12300 COMMISSIONER
LANGFORD: We're not there yet. Well, we'll keep marching.
LISTNUM
1 \l 12301 Thank
you very much.
LISTNUM
1 \l 12302 MR.
MURDOCH: Appreciate it.
LISTNUM
1 \l 12303 COMMISSIONER
LANGFORD: Those are my questions.
LISTNUM
1 \l 12304 THE
CHAIRPERSON: Thank you very much, Mr.
Murdoch.
LISTNUM
1 \l 12305 MR.
MURDOCH: Thank you.
LISTNUM
1 \l 12306 THE
CHAIRPERSON: Ms Madam Boulet.
LISTNUM
1 \l 12307 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 12308 We
now invite the next appearing intervenor, Illusions Entertainment Corporation
to make their presentation.
LISTNUM
1 \l 12309 If
you could please introduce yourself, and you'll have ten minutes for your
presentation.
INTERVENTION
LISTNUM
1 \l 12310 MR.
HARVEY: Yes, I'm Bruce Harvey from
Illusions Entertainment.
LISTNUM
1 \l 12311 I
don't even have a copy of my intervention here, so I can't read it. I'm just going to go down that road.
LISTNUM
1 \l 12312 It's
quite ironic that as I was driving here today that I noticed the Scott Paper
Mill down the street.
LISTNUM
1 \l 12313 My
first full‑time job was working at number 14 machine in that
building. As a good union member, and
now some number of years, which I won't go into, later I'm sitting at a table
with the Paperworkers Union talking about the acquisition of Citytv by CHUM.
LISTNUM
1 \l 12314 That's
not the ironic part. The ironic part is
when I was living in Ottawa at that time there was Global Television, CTV,
CBC. And a number of years later we're
going back to Global TV, CTV and CBC.
LISTNUM
1 \l 12315 And,
in the meantime, there have been a number of license granted across the
country, there have been a number of opportunities through specialty TV and
other licenses that gave people like myself, producers, windows to look at.
LISTNUM
1 \l 12316 We
had stations that were owned by ‑‑ specialty stations owned by
distributors, the biggest distributor in the country, the biggest lifetime
programmer in the country, an independent film maker from the Maritimes had a
station.
LISTNUM
1 \l 12317 Citytv,
which, if you're wondering why maybe Citytv's numbers don't look so good, they
were the original specialty programmer.
LISTNUM
1 \l 12318 The
reason why Space, Bravo, MuchMusic are all doing so well is because they came
from City. And City was the regional
specialty programmer, and that's why they got the licenses.
LISTNUM
1 \l 12319 I
read the ruling from the CRTC when they were granted the license, instead of
the alternative choices. And the reason
you gave them a license for MuchMusic is because they were going to use those
assets from Citytv to help support MuchMusic.
LISTNUM
1 \l 12320 And
the reason we can't separate Citytv from MuchMusic today, as Mr. Fecan said
yesterday, is because they're so interrelated.
You can't value one without valuing the other, and that's in the
valuation portion, which I'll get to later on, creates quite a problem when
you're trying to say what the benefits package should be.
LISTNUM
1 \l 12321 I
suppose it's better to put it into the specialty so you don't have to pay so
much for the conventional side. You only
have to pay the ten percent.
LISTNUM
1 \l 12322 The
reason I'm here ‑‑ one of the biggest reason I'm here is I'm
an independent producer ‑‑ film producer from Alberta. And I was before the Commission some number
of years ago when you first put out a call for the new stations in Alberta.
LISTNUM
1 \l 12323 I
was there for the first call when we had Wendell Wilks, and we had CanWest
Global, and we had the Craig family come up looking for a license. And, as you recall, they were all turned
down.
LISTNUM
1 \l 12324 And
the reason they were turned down is there was no additional programming
benefits. There was no benefits seen to
the industry at the time.
LISTNUM
1 \l 12325 A
few years later you put a second call out, and at that time CanWest Global came
forward and so did the Craig family.
LISTNUM
1 \l 12326 And
we had a benefit at that time because we had two people looking to get those
licenses, to get the station in Edmonton and the station in Calgary.
LISTNUM
1 \l 12327 And
we were able to look at their bids, we were able to look at what benefits
packages they were doing. And, more
importantly for me, I was able to look at a programming schedule.
LISTNUM
1 \l 12328 And
the reason that was important is because CanWest Global made a lot of
claims. They talked about how much
programming they were going to do, how they were going to give new TV series in
Alberta, how they were giving new TV series in the Maritimes, how they had
their existing programming across the station.
LISTNUM
1 \l 12329 But,
when we looked at the programming schedule, there was only one one‑hour
slot. And they were talking about how
much they were going to do, but there was one one‑hour slot.
LISTNUM
1 \l 12330 So
it was easy for us to look at it and say, great, you're not making any firm
commitments for those things, that you don't even have a window for them on
your proposed broadcast schedule. You
can't even accommodate the things you're saying you're doing in your future
look.
LISTNUM
1 \l 12331 Today
I don't have that benefit, because I don't have a programming schedule for
City, and I don't have a programming schedule for the new CTV.
LISTNUM
1 \l 12332 I
just have what they have in the past, and I have this piece of paper here,
which is a very slim consolidated financial projection for what's going to
happen on Citytv.
LISTNUM
1 \l 12333 When
we got to the licensing for the Craig family, at that time they were given the
licenses for those two stations, and they were required to do three hours of
drama programming and one feature film ‑‑ dramatic feature
film a week.
LISTNUM
1 \l 12334 That
dramatic feature film, 26 of them had to be original dramatic feature films.
LISTNUM
1 \l 12335 A
Channel had committed to spend $150,000 licensing. They didn't ‑‑ not as a
conditional license, but they undertook to us to spend $150,000 on each of
those licenses.
LISTNUM
1 \l 12336 We
move forward a few years, things were working great, Citytv and the Craigs had
a good working relationship, and then everything went to hell.
LISTNUM
1 \l 12337
Citytv started programming Access with feature films, all their programming off
the Citytv networks. A Channel was given
a broadcast license in Toronto. They
became competitors. They weren't
supporting each other. And,
understandably, the Craig family suffered.
LISTNUM
1 \l 12338 The
venture into Toronto, as we all know, was a mistake.
LISTNUM
1 \l 12339 So
Citytv came to their rescue.
LISTNUM
1 \l 12340 When
we first supported the purchase by Craig for the license, the first granting of
the licenses, one of the reasons we did is because it was so complementary to
Citytv.
LISTNUM
1 \l 12341 Their
programming schedule was very similar:
commitment to feature length films.
LISTNUM
1 \l 12342 Why
is that important to an Alberta producer?
There's very few slots on the dial anywhere in Canada for dramatic
programming for series, and we'll get to that later on. We can talk about how much money CTV actually
has available for dramatic series.
LISTNUM
1 \l 12343 There's
very, very few windows. And it's one
producing team that does each dramatic series.
LISTNUM
1 \l 12344 Feature
films, each one of them, is a new producing team.
LISTNUM
1 \l 12345 So
26 hours ‑‑ 26 feature films is 26 producers. 26 hours of ‑‑ or 22 hours,
if that's what we get from CTV with the new extended series, is one producer.
LISTNUM
1 \l 12346 So
the benefits were much greater ‑‑ especially in the prairies
it was hard for us to get in and start creating series. The diversity of view was much greater. It was a much better deal.
LISTNUM
1 \l 12347 So,
anyway, we come along to Citytv. You
give the license to Citytv, you have 100 hours of programming for feature films
in ‑‑ no, 100 hours in both Vancouver and Ontario and Toronto,
and they get Citytv now in Alberta that has the same commitment.
LISTNUM
1 \l 12348 They
bought those stations for ‑‑ those two stations for around
$150 million. It was a long time ago, it
was like two years ago, but they were worth $150 million then.
LISTNUM
1 \l 12349 The
station they bought in Vancouver they paid I think it was $130 million for.
LISTNUM
1 \l 12350 Unfortunately,
they gave it to the wrong management team, and we all made a mistake, you guys
made a mistake because you granted them the sales, and said that they were
going to make this a better programming industry, better broadcasting industry.
LISTNUM
1 \l 12351 And
they squandered those assets so badly that now those assets are only worth 110
to $150 million. Low and high end.
LISTNUM
1 \l 12352 And
that's after throwing Citytv Toronto into the mix, which is the flagship
station.
LISTNUM
1 \l 12353 So
add the flagship, lose $300 million. I'm
not sure how that works, but...
LISTNUM
1 \l 12354 So
when we went to ‑‑ we're in the situation now where we're told
that Citytv has been losing money for ten years, prior to the point when you
granted the right for Citytv to buy Vancouver and Edmonton and Calgary.
LISTNUM
1 \l 12355 And
I'm pretty sure that I would not have supported the acquisition if I knew that
Citytv was such a losing venture. I
wouldn't have said that the best way to save Alberta was to give it to another
losing venture.
LISTNUM
1 \l 12356 But,
anyway, we're told that they were losing $68 million. More than they spend on Canadian
content. I think they said yesterday
it's $4 million a year.
LISTNUM
1 \l 12357 So
that's $40 million over ten years. They
lost 68.
LISTNUM
1 \l 12358 So
we agreed to get a license to get the sale to City. City is in trouble. They want to sell now.
LISTNUM
1 \l 12359 So
what do we look at today?
LISTNUM
1 \l 12360 I
was here yesterday and I heard that we're all happy that Citytv is going to be
sold to CTV. And the reason that is is
that's going to provide more programming, more strength. It's going to get rid of the two big issues
that were facing Citytv, why they struggled.
LISTNUM
1 \l 12361 One,
was that the flagship stations, the Citytv stations, had to support the A
Channel stations. They had to find programming
that was going to fit the older demographic, and find some way to support
those.
LISTNUM
1 \l 12362 The
second one is was there actual programming that they were running. That the programming was not beneficial to
the station. They got away from their
edginess.
LISTNUM
1 \l 12363 So
we look at what CTV is going to give us today that's going to relieve those
problems so that this Citytv group will go forward and be a strong player in
the marketplace.
LISTNUM
1 \l 12364 Well,
the programming they're going to give us for the new Citytv is the left over
programming that CTV has right now.
LISTNUM
1 \l 12365 They
said that historically, and I assume that means over a period of years, they've
been required to buy excess programming from the American broadcasters, and
it's very important for the Canadian Broadcasting System to help support the
divestiture of those American programs.
LISTNUM
1 \l 12366 I
don't know why, if they had been buying programming that was so appropriate for
the Citytv stations, that they didn't just call up their good friends, as they
mentioned yesterday, and say we have this programming that we can't run on our
station, it fits perfectly for you.
LISTNUM
1 \l 12367 Rather
than throwing it in the garbage, like we're telling the CRTC we have to do now,
why didn't they sell it to City? If it's
such a good fit and if it makes such economic sense, why didn't it happen
already? I don't understand that.
LISTNUM
1 \l 12368 But,
anyway, we move along.
LISTNUM
1 \l 12369 They
were able to get rid of the dead wood, and they sold the dead wood for 137
million I think. $137 million for the A
Channel stations, with Access thrown in and Canadian Learning.
LISTNUM
1 \l 12370 So
the dead wood they sold for 130, the good stations were worth 110 to 150.
LISTNUM
1 \l 12371 So
now we're stuck with what's going to go forward.
LISTNUM
1 \l 12372 I
feel a bit like Dustin Hoffman sort of banging up against the glass saying,
"Please stop the wedding, please stop the wedding," from The
Graduate, but that's what it feels like.
LISTNUM
1 \l 12373 Because
when we look at what's being proposed here, all the other producers are very
happy about all the benefits we're getting, all the new windows.
LISTNUM
1 \l 12374 When
I look at the financial projections for CTV, there's category 7, which is where
Corner Gas, Degrassi kids, all of the new programming, the new ones that Citytv
have, the budgeted item, as I see it here, is slightly less than $19 million,
growing a little bit each year.
LISTNUM
1 \l 12375 It
sounds like a lot of money. It's double
what they pay on travel and entertainment.
It's almost as much as they pay to CRTC for the licenses on a yearly
basis. Substantially less than you pay
for outside management when it's 65 million.
LISTNUM
1 \l 12376 But,
anyway, $18 million for drama and comedy.
LISTNUM
1 \l 12377 And
what CTV is going to do with that is they're going to give us more Canadian
programming, they're going to give longer licenses, because right now, as
Citytv said yesterday, as Roma said, we only can give less than 13 episodes on
some series. Others we can give a little
bit more. We can't give a full amount of
license fee. They can only give $350,000
per show, and it just can't get programming on the air.
LISTNUM
1 \l 12378 They
need to do something more. And Citytv is
going to come along and do that for us.
LISTNUM
1 \l 12379 The
other thing Citytv says, they're going to be a one‑stop shop for us.
LISTNUM
1 \l 12380 They
know that the CTF is tapped out, so they'd like to be the one‑stop shop
that's going to provide these benefits for us.
LISTNUM
1 \l 12381 So
let's look at the number, $18 million.
Pick a show on CTV like Whistler.
Whistler's budget is I think $1.2 million. They can tell me if I'm wrong.
LISTNUM
1 \l 12382 It's
going to grow ‑‑ if you take growing one series to 22
episodes, the budget for that show is $26 million.
LISTNUM
1 \l 12383 The
full budget for drama under CTV is $18 million.
LISTNUM
1 \l 12384 Let's
say they do two shows. So they can give
roughly 35 percent for those two one hours of drama. That's all they can commit in their budget.
LISTNUM
1 \l 12385 What
they're giving in the benefits is supposed to be incremental. It's above that. So let's just look at what the real CTV
Citytv is.
LISTNUM
1 \l 12386
CTV Citytv is looking at less than one hour paid for by CTV of Canadian drama.
LISTNUM
1 \l 12387 When
you look at the benefits package ‑‑
LISTNUM
1 \l 12388 THE
SECRETARY: Excuse me, Mr. Harvey ‑‑
LISTNUM
1 \l 12389 MR.
HARVEY: Yes?
LISTNUM
1 \l 12390 THE
SECRETARY: You have 30 seconds to
complete your presentation.
LISTNUM
1 \l 12391 MR.
HARVEY: History got a bit longer for
theirs. Can I have a bit longer for
mine? I think History TV had a couple of
more weeks to go before they have to get rid of C.S.I., don't they? I can have maybe ten more minutes?
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 12392 THE
CHAIRPERSON: I wasn't here for ‑‑
we're running this hearing in a very disciplined method. That's the only way we can get through all
this maze of stuff.
LISTNUM
1 \l 12393 MR.
HARVEY: All I can tell you is that ‑‑
LISTNUM
1 \l 12394 THE
CHAIRPERSON: Please take your 60 seconds
to wrap up your presentation.
LISTNUM
1 \l 12395 MR.
HARVEY: I can't. The benefits package is one of the biggest
things going to producers. I cannot wrap
this up in 60 seconds. I'm sorry.
LISTNUM
1 \l 12396 THE
CHAIRPERSON: Well, we have your
submission. I'm sorry, you knew
beforehand ‑‑
LISTNUM
1 \l 12397 MR.
HARVEY: Each of these ‑‑
each of these items in here ‑‑ none of these items
provide ‑‑ when you look at the amount that's here ‑‑
trendsetters, risk takers 30 point 75 million.
The Commissioner thought it was a lot of money yesterday, broken down
over a one‑year period that's not one series.
LISTNUM
1 \l 12398 Ten
million dollars for feature films and dramatic ‑‑ dramatic
films and documentary films spread over seven years is about a million dollars
per show. That doesn't meet the
commitment that A Channel made when they committed to 26 originals at $150,000
per show. The commitments in this ‑‑
the broadcast ‑‑ the benefits they're giving are less than
what the Craig family gave to acquire the two stations in Alberta.
LISTNUM
1 \l 12399 Everyone
can jump up and down and say it's great.
There's not enough money in the benefits and in the budget for CTV to
cover the producers that were up here before supporting us let alone to give
new programming.
LISTNUM
1 \l 12400 THE
CHAIRPERSON: Okay. Thank you.
Helen, you have questions?
LISTNUM
1 \l 12401 COMMISSIONER
DE VAL: Thank you, Mr. Harvey. I've read your intervention. I've listened to your presentation
today. On your intervention you had
talked about the writers only ‑‑ the criticism of write only,
and I had the answer of Mr. Rabinovitch and ‑‑ yes, Mrs. Couture.
LISTNUM
1 \l 12402 The
pattern seems to ‑‑ seems to be ‑‑ I hear all
the problems. Maybe here is your two
minutes to tell me in a nutshell what you want us to do? What's your
solution? What ‑‑
LISTNUM
1 \l 12403 MR.
HARVEY: What ‑‑
what ‑‑ not what I want you to do. I mean what they should have done. What they should have asked for. One thing I wanted to clarify too is I
take ‑‑ I have a different stance than Commissioner Langford,
as to what assets Citytv owns. Citytv
has some great buildings. They have
great logos. They do not own the
licences of the actual broadcast rights.
LISTNUM
1 \l 12404 Broadcasting
in Canada is privilege. It's not a
right. You apply for a licence. You get a licence. You don't own it for the rest of your life.
LISTNUM
1 \l 12405 COMMISSIONER
DEL VAL: So what would you like them to
do?
LISTNUM
1 \l 12406 MR.
HARVEY: What I would like them to
do ‑‑ what could they have done? If they really believed in Canadian drama and
feature film, and if they were going to increase series and they were going to
make the commitments, they would have at least met the commitments that the
Craigs had made for those stations. They
could have met those across the Citytv format.
LISTNUM
1 \l 12407 They
could have committed to doing ‑‑ to actually investing in 100
films, not just carry them with zero licence fee. They could have committed an actual licence
fee similar to what they paid for dramatic programming that is series. So they could have given something more than
a $150,000 an hour. But a $150,000 is a
lot of money. That's $4,000,000 for this
size programming.
LISTNUM
1 \l 12408 What
they could have done is they could have said that they weren't going to run
their Canadian content on the ‑‑ the two networks at the same
time. Not just that they wouldn't have
any overlap, but the Canadian content from `City would not run at the same time
as the Canadian content from CTV. They
would run opposite each other.
LISTNUM
1 \l 12409 That
would help support. They could have
taken and said ‑‑ come to the Commission and said we've
listened to Telefilm, we've listened to the producers that were at the ‑‑
that Telefilm a month ago where they said how valuable it would be to have 30
second promotions for Canadian feature films on the network, and that we have
two minutes of programming in all of our American programming that we run that
we make all our money on.
LISTNUM
1 \l 12410 Why
don't we give half ‑‑ one of those 30 seconds of one of those
spots in every American show to promoting Canadian feature films and we'll give
that to CAFDE, the film distributors and exhibitors.
LISTNUM
1 \l 12411 Those
are the sort of things they could be doing to actually promote things. They could actually be putting this money in
the budget to meet the commitments that they say in the redirect that they're
going to do for Canadian content dramatic production.
LISTNUM
1 \l 12412 If
there was money in here to cover Brent, to cover Steven Stohn, to cover Steven
Heyges programming, to cover the programming from Alberta that was there
already ‑‑ if that was in the budget then I would be
happy. Because I could see what they
said they were going to do ‑‑ I can see how they're going to
do it. And it's here.
LISTNUM
1 \l 12413 It's
not that I think what they're doing is that bad. I mean the amount of money that they're
actually giving to production to put on screen is limited. I don't really understand how the theatre
schools on ‑‑ end up on the screen. But ‑‑ and whether ‑‑
you know Bravo Rocks doesn't belong on there either I don't think ‑‑
or City Rocks, whatever it is called.
Canada Rocks for the Cause.
LISTNUM
1 \l 12414 But
providing proper benefits ‑‑ properly evaluating those assets
and not saying that City was so poorly ‑‑ as the manager in
the last two years ‑‑ that they squandered $300,000,000. Take the money that was set aside that they
said was debt that wasn't there, attribute that to the conventionals where it
really belongs, and give benefits that reflect that. Because you're taking a twin stick and you're
putting there ‑‑ giving more than ten percent on those
benefits.
LISTNUM
1 \l 12415 I
can understand why you push and say that the conventionals aren't worth very
much. Because that's where you have to
give the added benefits. But the reality
is that those stations are worth something.
And the past shows, they're worth something.
LISTNUM
1 \l 12416 What
they sold the stations ‑‑ the A Channels for shows a
value. And that value is greater than
what they attributed under the Merrill Lynch forecast.
LISTNUM
1 \l 12417 COMMISSIONER
DEL VAL: Thank you. Those are my questions.
LISTNUM
1 \l 12418 MR.
HARVEY: Oh, and by the way you mentioned
my name earlier about writers. I work
with both independent writers ‑‑ with independent writers from
start‑up to academy award winning writers. I write myself. I'm familiar with the problems that Suzette
mentioned. But I do work with
writers. The reason why independent
producers ‑‑ have to make money through development as
well. And if you cut them out of the
development process all they get is the production and all they're getting is
drama series production, you're doing ‑‑ under these numbers
that are in CTV you're helping to support three or four producers a year.
LISTNUM
1 \l 12419 COMMISSIONER
DEL VAL: Thank you. Ms Couture wants you to phone her.
LISTNUM
1 \l 12420 MR.
HARVEY: I know that.
LISTNUM
1 \l 12421 THE
CHAIRPERSON: Stuart, I believe you have
a question.
LISTNUM
1 \l 12422 COMMISSIONER
LANGFORD: Yeah, I just ‑‑
do you accept the notion that the applicant is put before us that they are
going to carry forward whatever benefits are owed under the A Channel
purchase? Is what you're telling us that
you don't suspect they'll do that? I'm
just having a little difficulty?
LISTNUM
1 \l 12423 MR.
HARVEY: No, no. I'm not saying that. I'm saying that if they're making the same
commit ‑‑ benefits are an add on. We know that we are coming down to very few
broadcaster left in the country. There's
going to be less opportunity for acquisition, less opportunity for
benefits. Benefits is not what it's about. And if we believe what they say that those
are incremental, what's in the budget should be what we're really looking
at. That those are the real carry
forward numbers.
LISTNUM
1 \l 12424 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12425 MR.
HARVEY: So when you look at what's
here ‑‑ yes, you can say that.
We can have benefits for under the A Channels ones. And there will be some producers in Alberta
that will get something. I'm not saying
the money should go all to Alberta from here.
That's not what I'm saying.
LISTNUM
1 \l 12426 COMMISSIONER
LANGFORD: No, no. That's ‑‑
LISTNUM
1 \l 12427 MR.
HARVEY: But feature film ‑‑
LISTNUM
1 \l 12428 COMMISSIONER
LANGFORD: But you do accept that they're
carrying forward the A Channel benefits?
LISTNUM
1 \l 12429 MR.
HARVEY: Absolutely.
LISTNUM
1 \l 12430 COMMISSIONER
LANGFORD: Okay. So what's the problem? And sorry, I just ‑‑ this is
just a straight information question.
LISTNUM
1 \l 12431 MR.
HARVEY: We're going to have two major
conventional broadcasters in this system.
LISTNUM
1 \l 12432 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12433 MR.
HARVEY: The Canadian content drama
production ‑‑ the larger one that it's committing to is
$18,000,000 a year. That's what ‑‑
that's what our landscape is going to look like when the benefits are
gone. Incrementally $18,000,000 going up
about 2.8 percent is what we look at here.
When we read their submission as to how much they expect it to go up
over the licence, that's what they're talking about.
LISTNUM
1 \l 12434 COMMISSIONER
LANGFORD: Well, I didn't get that
impression from what they said yesterday.
But I see Mr. Fecan scribbling, so we'll ‑‑
LISTNUM
1 \l 12435 MR.
HARVEY: It's only ‑‑
LISTNUM
1 \l 12436 COMMISSIONER
LANGFORD: ‑‑ get his answer.
LISTNUM
1 \l 12437 MR.
HARVEY: It's only in the
financials. I mean I'm not ‑‑
I didn't make this number up. I
described their financials that they submitted.
LISTNUM
1 \l 12438 COMMISSIONER
LANGFORD: But do I understand you to
say ‑‑ and again I'm looking ‑‑ I'm not
challenging you, I'm actually looking for information here. You're the man on the spot here. Do I understand you to take the position that
you see the 18 million as all that's going into the programming? I mean ‑‑
LISTNUM
1 \l 12439 MR.
HARVEY: I see it as going into drama and
comedy category 7; 2008, $18,862,000; 2009, $19,398,000.
LISTNUM
1 \l 12440 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12441 MR.
HARVEY: The benefits package that is
given is incremental programming, that's due to this sale here.
LISTNUM
1 \l 12442 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12443 MR.
HARVEY: I'm not talking just about what
this sale ‑‑ what we're going to get just today. I'm talking about where our Canadian
landscape is going.
LISTNUM
1 \l 12444 COMMISSIONER
LANGFORD: But do you take their term one‑stop
shopping to mean that ‑‑ if you were to put together some sort
of production scheme that you would get absolutely every dime you need from CTV
or just enough to get you rolling?
LISTNUM
1 \l 12445 MR.
HARVEY: I can't with this amount ‑‑
with what we're talking about ‑‑ incremental ‑‑
yesterday Roma said they have seven dramatic series that they've been
developing of which they might be able to get one right now.
LISTNUM
1 \l 12446 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12447 MR.
HARVEY: With CTV they'll be able to get
two or three. We heard this morning from
the producers, and we heard yesterday from City ‑‑
LISTNUM
1 \l 12448 COMMISSIONER
LANGFORD: Let me ask you ‑‑
LISTNUM
1 \l 12449 MR.
HARVEY: ‑‑ from Citytv ‑‑ hold it ‑‑
saying that the CTF is tapped out and that the benefit coming to them is that
they'll be able to provide the funding so that producers can work on casting,
on script development, and we don't have to worry about going out and finding
funding all around the countryside. So
yes ‑‑
LISTNUM
1 \l 12450 COMMISSIONER
LANGFORD: But that doesn't mean they
don't have to worry about getting more funding, does it?
LISTNUM
1 \l 12451 MR.
HARVEY: But I believe it means
more ‑‑ at least something close to a third.
LISTNUM
1 \l 12452 COMMISSIONER
LANGFORD: Okay. Well, then we'll put that to Mr. Fecan and he
can enlighten us ‑‑
LISTNUM
1 \l 12453 MR.
HARVEY: ‑‑ commitments are that now.
LISTNUM
1 \l 12454 COMMISSIONER
LANGFORD: See, I've got another
impression. I got the impression ‑‑
LISTNUM
1 \l 12455 MR.
HARVEY: I know you got the other
impression. But look at the numbers that
are here.
LISTNUM
1 \l 12456 COMMISSIONER
LANGFORD: I've seen the numbers.
LISTNUM
1 \l 12457 MR.
HARVEY: They're not here.
LISTNUM
1 \l 12458 COMMISSIONER
LANGFORD: I've even seen the ones on the
pink pieces of paper.
LISTNUM
1 \l 12459 MR.
HARVEY: Yeah, which I'd love to see.
LISTNUM
1 \l 12460 COMMISSIONER
LANGFORD: Yeah.
LISTNUM
1 \l 12461 MR.
HARVEY: I will give you a better
analysis if you show me the pink ones.
LISTNUM
1 \l 12462 COMMISSIONER
LANGFORD: I'll show you yours, you show
me mine.
LISTNUM
1 \l 12463 ‑‑‑
Laughter / Rires
LISTNUM
1 \l 12464 COMMISSIONER
LANGFORD: But I ‑‑ I
know that line. It's like if anything
happens I'll marry you, which is another one I never really wanted to trust to
heavily.
LISTNUM
1 \l 12465 ‑‑‑
Laughter / Rires
LISTNUM
1 \l 12466 COMMISSIONER
LANGFORD: What we have here is some
questions to put to Mr. Fecan. Would you
agree? I saw it differently. I thought he was explaining something
differently. So let's wait for the
reply. Those are my questions. I think we'll get the answers from them. And I appreciate your questions. Thank you very much.
LISTNUM
1 \l 12467 THE
CHAIRPERSON: I want to ask you a bit
more philosophical questions. I find
your whole attitude of premise on the fact that we've got to force CTV to do
this. They won't do it on their own.
LISTNUM
1 \l 12468 I
mean I come at it from exactly the other end.
We impose upon them Canadian content requirements. Every ‑‑ it's absolutely in
their interest to meet that with the best programming possible in order to sell
it, in order to get the audiences. And
if that means spending money on Canadian drama they will.
LISTNUM
1 \l 12469 I
mean what you put in seems to me is just sort of an illustration of what ‑‑
an indication. But the main thing is I
feel it depends on their self‑interest.
They can't get around the Canadian content requirement.
LISTNUM
1 \l 12470 So
if you have to live it, make sure you produce the absolute best in order to get
the greatest audience. I would have
thought that has to be the basic equation facing Mr. Fecan and his people.
LISTNUM
1 \l 12471 MR.
HARVEY: I agree, yes. But the best he can afford to put on the
schedule ‑‑ but he has to look at the CFO who tells him that
this is how much money he has to do that.
If he can show me ‑‑ if he can go through here and say
that this an accurate forecast for where their revenues are going, although
City wasn't very good at it when they did their two licences. But if they can go through and say where the
items are coming out ‑‑ I mean I trust them that this is how
much money they say they are going to make.
LISTNUM
1 \l 12472 So
if you can tell me where it is that they have money available ‑‑
where the slush funds are that should be going to Canadian content and that
they are going to put them there, I'm on side.
I'm not saying that ‑‑ don't get me wrong, I do not
think that Ivan Fecan is bad broadcaster.
I think he's a brilliant broadcaster.
I think the programs they put out or excellent.
LISTNUM
1 \l 12473 I'm
just saying that what we're looking at by combining these two stations together
is not going to necessarily create the best environment for Canadian broadcast
industry for producers. And there isn't
enough money in here to do these things.
LISTNUM
1 \l 12474 So
to sit there and say that the reason we should be going forward is because of
A, B, C, and D ‑‑ they don't do A, B, C, and D. So give us another reason why we should go
forward.
LISTNUM
1 \l 12475 Tell
me what should happen? Tell me I should
get out of the business and I should go back working at Number 14 Machine. You know, tell me something that says that
there is some benefit for why we're doing this.
I mean I think ‑‑ personally I think Paul Gratton is
one of the best broadcasters in the country.
I think he's got a great eye for feature film. I'm glad he's at CHUM City. And I think ‑‑ I love
working with their group.
LISTNUM
1 \l 12476 Every
film I've made has been on CHUM city.
I've done films that have been for a million and a half to
$33,000,000. They have all been on CHUM
City. None of them have been on
CTV. None of them have been on CBC. They have all been on CHUM. They have all been ‑‑
through Alliance.
LISTNUM
1 \l 12477 So
when you look at what's there, there's a window that's available. We're going to lose that window. So where's it going to? What rights am I going to have? I supported A Channel. I was here in front of the CRTC saying don't
let Global get these stations for these reasons. So ‑‑ you gave a
licence. I have the licence here ‑‑
what was granted. Now we can go through
all the licences and see what it was ‑‑ what part of the
broadcast community you were trying to support.
LISTNUM
1 \l 12478 So
I'm going to give that up. I want to
know what I'm going to get in exchange?
Now what's going to happen to the broadcast community? I just don't see the numbers there. I'm sorry.
LISTNUM
1 \l 12479 THE
CHAIRPERSON: Okay. Thank you very much. Are there no further questions? We still have an awful lot of interveners to
go through today. And then tomorrow, I
guess, we're going to hear from CTV. So
I would suggest we take an hour break and we come back here at 1:30.
LISTNUM
1 \l 12480 Thank
you.
‑‑‑ Upon recessing
à 1232 / Suspension à 1232
‑‑‑ Upon resuming
at 1333 / Reprise à 1333
LISTNUM
1 \l 12481 THE
CHAIRPERSON: All right. Let's resume.
LISTNUM
1 \l 12482 Madam
Boulet.
LISTNUM
1 \l 12483 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 12484 We
will now proceed with the CBC presentation.
Mr. Richard Stursberg will be introducing his panel, after which you
will have ten minutes for your presentation.
LISTNUM
1 \l 12485 Please
go ahead.
INTERVENTION
LISTNUM
1 \l 12486 MR.
STURSBERG: Thank you. Good afternoon, Mr. Chair, Commissioners and
CRTC staff. My name is Richard Stursberg
and I'm Executive Vice‑President of CBC English Television.
LISTNUM
1 \l 12487 To
my right is Kirsten Layfield, who is the Executive Director of Network
Programming. To my left is Dave
Scapilatti, the General Manager of Sales and Marketing. And to his left is Bev Kirshenblatt, the Senior
Director of Regulatory Affairs.
LISTNUM
1 \l 12488 In
opposing this transaction we have addressed a number of issues in our
intervention. Today I would like to
focus on three key questions:
LISTNUM
1 \l 12489 (1)
Why is this particular application before you today?
LISTNUM
1 \l 12490 (2)
Is this proposed transaction in the public interest?
LISTNUM
1 \l 12491 (3)
If there are problems ‑‑ and we believe there are ‑‑
can the transaction be salvaged?
LISTNUM
1 \l 12492 Why
are we here today?
LISTNUM
1 \l 12493 Let's
start at the beginning. This application
is the result of a decision by the Waters family to sell their interest in CHUM
after the death of CHUM's founder, Alan Waters.
Contrary to the suggestions of CTV, CHUM was not a struggling company
that needed to be rescued, a company that was financially distressed in any
way. The opposite is true. CHUM was a very successful broadcasting
company that was growing on all fronts.
LISTNUM
1 \l 12494 The
50 percent premium that CTV paid for the CHUM shares is a clear testament to
the success of CHUM and the value of the CHUM assets. By way of confirmation of this valuation,
Astral was outbid by only 5 percent.
LISTNUM
1 \l 12495 The
Waters family sold CHUM because they wanted to leave the broadcasting business,
not because they had to save the company from insolvency.
LISTNUM
1 \l 12496 Is
that a sufficient reason to approve this transaction? We do not think so.
LISTNUM
1 \l 12497 The
Commission has an obligation under the Broadcasting Act to assess whether the
transaction is in the public interest and fulfils the policy objectives of the
Act, which brings me to our second question:
Is this transaction in the public interest?
LISTNUM
1 \l 12498 As
we identified in our written submission, this application raises numerous
concerns. In our oral remarks, we would
like to focus on what we consider to be the most important of these points, the
effect this transaction would have on competition.
LISTNUM
1 \l 12499 CTV
has tried to argue that this transaction will level the playing field between
itself and Canwest. This is simply not
the case. CTV is already the largest and
most successful English language television broadcaster in Canada. It is not playing catch‑up with anyone.
LISTNUM
1 \l 12500 CTV
wants to own two local operations in the five most important English language
markets: Toronto, Vancouver, Calgary, Edmonton and Winnipeg. In their written interventions CBC, Canwest
and others have shown that the existing Canwest situation is totally different
from what CTV is proposing for itself.
LISTNUM
1 \l 12501 Canwest
does not own two stations in any local market as defined by the CRTC. There is no structural imbalance that needs
to be remedied. And while CTV has argued
that the common ownership policy is no longer relevant in a world of increasing
program choices, the Commission has clearly indicated that it will not review
its current policy in this proceeding.
LISTNUM
1 \l 12502 Based
on the facts before us, there is no justification for an exception to the
Commission's common ownership policy, but that is only the beginning of the
story.
LISTNUM
1 \l 12503 If
this transaction were approved, CTV would capture 50 percent of all television
advertising revenue in the English market, conventional and specialty. This would be a remarkable outcome. Our largest English language television
broadcaster would become even larger and enjoy unprecedented market power.
LISTNUM
1 \l 12504 This
level of market power would exceed all traditional measures of acceptable
industry concentration, well above the Competition Bureau's market share
threshold of 35 percent. If this
transaction were permitted, only two major private broadcasters would remain
together controlling 75 percent of all advertising revenues.
LISTNUM
1 \l 12505 In
the United States, the U.S. Department of Justice and the Federal Trade
Commission used the Herfindahl Index to measure concentration. Any measure above 1,800 is regarded as highly
concentrated. In the case of this
transaction, after the merger, the industry would be close to 3,200. Most economists would certainly regard this
as an unacceptable level of concentration.
LISTNUM
1 \l 12506 The
effect on other broadcasters would be significant and negative in two ways.
LISTNUM
1 \l 12507 First,
this level of market power would allow CTV‑CHUM to obtain prices for its
advertising inventory that would be higher than a fully competitive environment
would permit. The ability to extract
those premiums would inevitably come at the expense of smaller players, most
notably the CBC, the only broadcaster that shows Canadian programming in real
prime time.
LISTNUM
1 \l 12508 We
put some data together for you in your reference materials. This is the chart. It's at the back of the speech.
LISTNUM
1 \l 12509 This
chart, which relies on the CRTC's own financial data from 2005, shows how CTV
would be able to use its market power to maximize its revenues and the possible
consequences for smaller players.
LISTNUM
1 \l 12510 Put
simply, it will be able to do two things.
LISTNUM
1 \l 12511 First,
it will be able to raise the price for its existing high value properties, most
notably its successful U.S. shows. This
will reduce the money available to others since the conventional advertising
market is flat and may shrink in the future.
LISTNUM
1 \l 12512 Second,
it will be able to bundle the relatively lower valued CHUM inventory, the
inventory that CBC competes against, with its high value U.S. shows to deny us
selling opportunities. As a result, CTV‑CHUM's
programs will become "must buys" for advertisers. Advertisers will be obliged to redirect
spending away from the CBC and with more revenue going to CTV‑CHUM we
will be unable to dedicate the same resources to the production of Canadian
programs.
LISTNUM
1 \l 12513 We
can return to the chart later, if you would like to.
LISTNUM
1 \l 12514 It
is worth noting that we are not alone in thinking this would happen. The Association of Canadian Advertisers is
equally concerned. The ACA states that
approving the CTV application would give CTV an undue competitive advantage.
LISTNUM
1 \l 12515 If
the advertisers are worried, I think we also have a right to be.
LISTNUM
1 \l 12516 The
new CTV would also be able to use its dominant position and enhanced revenues
to outbid others in the programming market.
LISTNUM
1 \l 12517 From
CBC's perspective, this is especially troubling in the context of Canadian
programming and CTV's proposal to keep all the tangible television benefits to
itself.
LISTNUM
1 \l 12518 With
the enhanced advertising revenues available to it, as well as control of
millions of dollars of benefits money, CTV would be in a position both to
outbid CBC for new Canadian programs, as well as tie up independent producers
formally or informally with first look deals for CTV's sole benefit.
LISTNUM
1 \l 12519 I
would like to take a moment to focus on this issue of self‑directed
benefits in the context of the present transaction.
LISTNUM
1 \l 12520 The
very purpose of the public benefits mechanism is to ensure that the deal also
benefits the public, since the licence being sold actually belongs to the
public. It is completely incompatible
with the purpose of public benefits to assign them to the parties involved in
the transaction. To do so turns them
from public into private benefits.
LISTNUM
1 \l 12521 The
only proper approach to benefits in a situation such as this is to require the
benefits to be assigned in a way that benefits the broadcasting system as a
whole, not just CTV and CHUM. In our
view, the best mechanism for this is the Canadian Television Fund.
LISTNUM
1 \l 12522 CTV
argues that the Commission should adopt the approach to their benefits as it
did in 1999. It notes that the
arrangement worked well because it allowed producers one stop shopping. Rather than running around trying to organize
their financing, producers were able to focus on the creative work associated
with making television shows.
LISTNUM
1 \l 12523 This
was probably a good argument in 1999, but now all broadcasters can offer one
stop shopping because the Canadian Television Fund has adopted an envelope
based approach to allocating its resources.
LISTNUM
1 \l 12524 The
envelope system works pretty much the same way CTV would like to use the
benefits money itself. This means that
putting the money directly into the Canadian Television Fund can also achieve
the one stop shopping objective.
LISTNUM
1 \l 12525 We
recognize that the Competition Bureau looked at this transaction. They issued subpoenas to many companies to
gather information on the impact of the proposed transaction on the advertising
markets. Then, before all the evidence
was received, they halted the process.
LISTNUM
1 \l 12526 In
this sense, it appears to us that the Bureau neither approved nor disapproved
the transaction.
LISTNUM
1 \l 12527 In
any event the CRTC's mandate is more fundamental and far broader than that of
the Competition Bureau, and therefore its examination of this transaction is
far more important. We don't think that
the Commission should give any weight to the fact that the Competition Bureau
chose not to take steps to further investigate and possibly block the CTV
acquisition of CHUM.
LISTNUM
1 \l 12528 The
Commission is in charge of ensuring that Canada has a diverse, vibrant and
robust broadcasting industry which is capable of achieving the goals of the
Broadcasting Act. In our view, it is
clearly contrary to those goals and against the overarching public interest to
permit the creation of a mega broadcaster, a company that would be able to
dominate the English television market, squeezing both advertisers and other
broadcasters.
LISTNUM
1 \l 12529 That
brings me to our final question: Can
this transaction be salvaged?
LISTNUM
1 \l 12530 Given
the clear problems with this application, it is natural to ask: Is there a way to fix it? CTV says yes: safeguards.
LISTNUM
1 \l 12531 In
our view, this makes no sense. There are
no policy reasons for approving this transaction. The CTV acquisition of CHUM would not solve
any problems. It would only create them.
LISTNUM
1 \l 12532 Why
would the Commission want to create a behemoth only to then forge a set of
chains to make sure it doesn't wreak havoc on the broadcasting system? Why create an unnecessary regulatory burden
for the Commission and others? Why
create problems of administration, monitoring and enforcement? Why do this when it is totally unnecessary?
LISTNUM
1 \l 12533 CTV
does not need to buy CHUM. CTV is doing
very well already and CHUM does not need to be bought by CTV. There are lots of other Canadian media
companies who would be interested in the CHUM assets.
LISTNUM
1 \l 12534 That
brings me back to the beginning of our presentation. Why are we here today?
LISTNUM
1 \l 12535 Because
the Waters family wanted to sell CHUM and CTV and outbid Astral for the
assets. That is not a good reason to
approve this transaction. This
transaction is against the public interest and it should not be approved.
LISTNUM
1 \l 12536 Thank
you for giving us the opportunity to present these comments, and we would be
happy to answer any questions that you might have.
LISTNUM
1 \l 12537 THE
CHAIRPERSON: Thank you very much, Mr.
Stursberg.
LISTNUM
1 \l 12538 Can
you walk me through the chart for a moment and explain the numbers?
LISTNUM
1 \l 12539 MR.
STURSBERG: I will. Actually, what I will do is I will ask Dave
Scapillati, who is the Head of Marketing and Sales, to walk you through the
chart.
LISTNUM
1 \l 12540 MR.
SCAPILLATI: What we have attempted to do
is put this into an easy to understand chart to take you through and try and
quantify what the impact would be, using some conservative assumptions of what
the impact would be with the two concerns that we have.
LISTNUM
1 \l 12541 If
you look on the left, we have all the major broadcast competitors and the first
column is the share of the conventional market.
Currently, Canwest and CTV have primarily premium U.S. programming
making up 73 percent of the total dollars.
LISTNUM
1 \l 12542 The
lower demand programming is fulfilled in the market currently by CHUM, CBC and
all other smaller independents.
LISTNUM
1 \l 12543 After
the merger, you would see that CTV and CHUM together would represent 52 percent
of conventional advertising revenues.
LISTNUM
1 \l 12544 If
it holds true that they are able to command a premium, raise the price of t
heir premium U.S. programming, in addition to the bundling effect by forcing
advertisers to buy some of the lower priced, less demand CHUM inventory in
order to get the premium price U.S., then we are looking at a range ‑‑
and I have used conservative estimates ‑‑ of 2 to 5 percent.
LISTNUM
1 \l 12545 Given
that the conventional advertising market is not growing ‑‑ it
is staying flat to maybe negative ‑‑ that is just sharing a
pie. Any gains from one come right out
of the pockets of the others.
LISTNUM
1 \l 12546 THE
CHAIRPERSON: Even if I accept that,
which I have some difficulty with, why would it come all out of your hide? Why not out of Canwest?
LISTNUM
1 \l 12547 MR.
STURSBERG: It's possible that some of it
could come out of Canwest. The idea is
actually just to give you an illustrative sense of this.
LISTNUM
1 \l 12548 Our
general feeling is twofold. One, as we
were saying, they will be able to command the premiums in the market because
they will have more market power.
Second, they will be able to move the CHUM inventory more effectively.
LISTNUM
1 \l 12549 So
it might be that some of it would come out of Canwest, but Canwest retains a
significantly stronger position in the market than any of the smaller players.
LISTNUM
1 \l 12550 The
way we have done it here, as you will see, as David will show you, is we have
simply assigned the losses to the bottom players. We could do it another way, but it is just
illustrative.
LISTNUM
1 \l 12551 David.
LISTNUM
1 \l 12552 MR.
SCAPILLATI: So if you look at the new
market share post acquisition ‑‑
LISTNUM
1 \l 12553 COMMISSIONER
DEL VAL: I'm sorry, I just want to
clarify. This share is of advertising
revenues.
LISTNUM
1 \l 12554 MR.
SCAPILLATI: Advertising revenue total
conventionally.
LISTNUM
1 \l 12555 COMMISSIONER
DEL VAL: Thank you.
LISTNUM
1 \l 12556 MR.
STURSBERG: This is just conventional
advertising revenues. It doesn't include
the specialty revenues.
LISTNUM
1 \l 12557 MR.
SCAPILLATI: The new share post
acquisition, if we look at a 2 to 5 percent range for CTV‑CHUM combined,
would be 54 to 57. CBC‑All Others
would drop from 15 down to between 13 and 10.
LISTNUM
1 \l 12558 So
let's look at that in real dollars and real percentage change.
LISTNUM
1 \l 12559 If
they were to shift 2 percent, then total advertising revenues for the CTV and
CHUM together would grow 3.8 percent.
That coincides with CTV's response to deficiencies where they did say
that they forecast it to grow 3 percent.
So it is not too far out of the range.
We believe the low end is accepted by CTV.
LISTNUM
1 \l 12560 The
impact on CBC and the other smaller independents would be a much bigger impact
because of our smaller base. It would be
in the range of 13 to 33 percent; if you look at real dollar terms, between
$38 million and $95 million.
LISTNUM
1 \l 12561 So
even that small shift of 2 percent creating a $38 million shift in advertising
revenues; very significant.
LISTNUM
1 \l 12562 MR.
STURSBERG: Just to put it into
perspective for you, right now CBC's total English language advertising
revenues are about $200 million. So
if it were to the high end with a $95 million loss, and even if it were split
50:50 between ourselves and the others, you can see that would wipe out almost
25 percent of our current advertising revenue.
LISTNUM
1 \l 12563 So
it potentially has a very big impact on us, and we think the impact would be
disproportional to the smallest players in the market; i.e., ourselves and
others who are left.
LISTNUM
1 \l 12564 THE
CHAIRPERSON: The second question
is: You basically said we should stop
this transaction. Let's not approve it
and let the market speak and somebody else will come forward and pick up the
assets, I gather.
LISTNUM
1 \l 12565 Yesterday,
first Commissioner Langford and then I mentioned that we have trouble with this
transaction because it doesn't really fit at all our two‑stick
policy. The two‑stick policy is
based on failing stations and I expressed the view that I didn't see that City
stations fail. You could make the
argument that the A stations are failing.
They are certainly much unhealthier than the other.
LISTNUM
1 \l 12566 If
you had a flip and in effect City chose to buy the A station and divest the
City stations, will your opposition still remain the same?
LISTNUM
1 \l 12567 MR.
STURSBERG: We would be much more
comfortable with that.
LISTNUM
1 \l 12568 THE
CHAIRPERSON: And third, on the CTF, you
seem to be one of the rare people who seems to think the CTF works fine and is
an example to be emulated.
LISTNUM
1 \l 12569 Do
you mean to basically restructure CTF or just the CTF as right now; that all
the benefits should go there?
LISTNUM
1 \l 12570 MR.
STURSBERG: I think the CTF actually has
come a long way. I used to have the
pleasure of chairing the CTF in conceivably its darkest days, and I think they
have made a lot of progress.
LISTNUM
1 \l 12571 Having
said that, could the CTF operate better?
Absolutely.
LISTNUM
1 \l 12572 We
met Michel Arpin the other day and we gave him a series of suggestions as to
how we thought the CTF could operate better.
But my general feeling would be that as between letting CTV keep all the
benefits money and discharge it itself versus putting the benefits money into
the CTF, even as it stands now, we are much better off doing the latter.
LISTNUM
1 \l 12573 THE
CHAIRPERSON: Are there any other examples where the CTV suggestion of self‑administered
funds like this is in existence? You
suggest the benefits should be public and not CTV‑owned. That's why they should go to the CTF or
another mechanism like that rather than being administered by themselves.
LISTNUM
1 \l 12574 Is
CTV ploughing new grounds?
LISTNUM
1 \l 12575 MR.
STURSBERG: No. There are other benefits packages that have
been put into other independent funds, but the independent funds have never
been to allocate the money uniquely to the people who established the
funds. Indeed, they have had requirements
that they had to have boards of directors and so on and so forth.
LISTNUM
1 \l 12576 As
far as I know, this is the same general structure that they proposed in 1999
and that was accepted by the Commission at the time. Indeed, I remember I was then the Chairman of
the Television Fund and they had come to ask me whether I thought this was a
good idea, and I said at the time I thought it was probably not a bad idea.
LISTNUM
1 \l 12577 But
as I said in my oral remarks, that is now eight years ago and times have
changed substantially. I think what they
say has merit; that it was a good idea to have a situation where there was one
stop shopping. I think it is a good idea
that people can make more than 13 episodes of a show exactly along the lines
that Linda Schuyler was saying earlier on today. Those are good things and we have made
exactly the same points to Michel Arpin.
So we agree with all that.
LISTNUM
1 \l 12578 But
right now the situation is that since there is an uninvolved structure within
the CTF ‑‑ and what that means is that each broadcaster is
essentially handed a certain amount of cash out of the CTF and said here, go
ahead make your deals with producers ‑‑ every broadcaster can
now have a one stop shopping relationship with the producers.
LISTNUM
1 \l 12579 So
it is in that sense that we say 1999, that was one time; 2007 it's another
time. You put the money into the
CTF. You can also have one stop
shopping.
LISTNUM
1 \l 12580 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 12581 Elizabeth,
please.
LISTNUM
1 \l 12582 COMMISSIONER
DUNCAN: Mr. Stursberg, I would like to
start reviewing the transaction because there are more aspects to it than just
the over the air television.
LISTNUM
1 \l 12583 Are
you opposed to the sale of the radio portion?
LISTNUM
1 \l 12584 MR.
STURSBERG: No.
LISTNUM
1 \l 12585 COMMISSIONER
DUNCAN: And are you opposed to the sale
of the specialty?
LISTNUM
1 \l 12586 MR.
STURSBERG: No.
LISTNUM
1 \l 12587 COMMISSIONER
DUNCAN: So your issue is only with
conventional television.
LISTNUM
1 \l 12588 MR.
STURSBERG: Our issue is with the conventional
television and with the structure of the benefits.
LISTNUM
1 \l 12589 COMMISSIONER
DUNCAN: On the fact that you have just
said that you would be more comfortable with the A Channels, it seems to me,
listening to your arguments earlier, that the issue would be the same. They would still have the advertising
clout. They would still be able to force
people to buy.
LISTNUM
1 \l 12590 I
don't understand why you would be more agreeable to the A Channels than you
would be to the CHUM channels.
LISTNUM
1 \l 12591 MR.
STURSBERG: I think what I said was I
would be less disagreeable on the subject.
It would give me less concern but it would still give me concern.
LISTNUM
1 \l 12592 The
plain fact of the matter is that the A Channels are not doing very well compared
to the CHUM conventional channels. So to
the extent that they are doing poorly, to that extent does alleviate my
concerns. But my concerns, as you say,
would still continue.
LISTNUM
1 \l 12593 COMMISSIONER
DUNCAN: With the over the air television
review, of course, we learned that all of the television broadcasters are sort
of falling on hard times as advertising is being redirected.
LISTNUM
1 \l 12594 I
think the evidence that we got yesterday from CTV was that CHUM's results are
on the decline. So it seems to me that
they do need to be bolstered. I didn't
get the impression that they were as financially sound as you maybe thought.
LISTNUM
1 \l 12595 MR.
STURSBERG: Well, I don't know. I don't have any particular insight into the
CHUM numbers.
LISTNUM
1 \l 12596 What
I do know is that if you were to look at the analysts' views as to the
situation with respect to the performance of these assets ‑‑
this is, for example, Scotia Capital's review of the Bell Globemedia offer for
CHUM in which they attempt to assess whether fair market value is being paid
and the pros and cons of the transaction, et cetera. This is the August 2006 Scotia Capital piece.
LISTNUM
1 \l 12597 In
their model summary of CHUM Limited,
what they do is they calculate what was known in 2003, 2004 and
2005. These are actuals and then they
estimate 2006, 2007 and 2008.
LISTNUM
1 \l 12598 Their
estimate is that EBITDA would grow from $79.9 million in 2003 ‑‑
this is just CHUM alone ‑‑ to $137.6 million, which would mean
in fact that the gross margin would improve from 15 to 20 percent. This is the view of Scotia Capital. This is not my view. But that doesn't sound to me like a
distressed asset. That sounds to me like
an asset which is in reasonably good shape.
LISTNUM
1 \l 12599 COMMISSIONER
DUNCAN: I guess it's hard for us to
comment really. They are projecting
those numbers, Scotia Capital. We are
relying on the folks from CHUM and CTV to give us the information they have
given us.
LISTNUM
1 \l 12600 MR.
STURSBERG: As I say, I have no insight
into the numbers that they have produced for you. I can't comment on those. All I know is the numbers that we read from
the financial analysts and the investment banking community.
LISTNUM
1 \l 12601 COMMISSIONER
DUNCAN: And the fact that Astral was
only below the bid by 5 percent, they must have been all in the same ballpark
as far as valuing the transaction.
LISTNUM
1 \l 12602 MR.
STURSBERG: Yes. Well, clearly if there had been a gigantic
difference as between Astral and what it was CTV was prepared to pay, then you
could say that there was something odd going on in the market.
LISTNUM
1 \l 12603 But
I think the fact that Astral was only 5 percent below, what it shows is that in
fact (a) there are other buyers and (b) that the other buyers will pay a
substantial amount of money and a substantial premium over market for the CHUM
assets.
LISTNUM
1 \l 12604 COMMISSIONER
DUNCAN: And so you think that we have a
concern I think about delaying the transaction.
You don't think there is any concern or that we should be concerned?
LISTNUM
1 \l 12605 MR.
STURSBERG: We are not proposing that you
delay your decisions in any way. We
understand ‑‑
LISTNUM
1 \l 12606 COMMISSIONER
DUNCAN: Not to delay the decision
but ‑‑ well, I guess that's what I understood you to be saying. If we don't approve it, the sale will be
delayed because they will have to find another buyer.
LISTNUM
1 \l 12607 MR.
STURSBERG: Or you could approve it
subject to their disposing of the City TV assets. That's another way to do it.
LISTNUM
1 \l 12608 COMMISSIONER
DUNCAN: What about if the funds ‑‑
and we heard a lot of support and got a lot of written interventions in support
of the self‑directed fund, as we talked about.
LISTNUM
1 \l 12609 If
the fund goes to the CTF fund, CBC gets 37 percent of that number. Is that correct? That's what I understood.
LISTNUM
1 \l 12610 MR.
STURSBERG: That's correct.
LISTNUM
1 \l 12611 COMMISSIONER
DUNCAN: So that means the money wouldn't
be going directly, as I understand it, to these independent producers and
writers. It would go to broadcasters,
including the CBC.
LISTNUM
1 \l 12612 MR.
STURSBERG: No, that's not right.
LISTNUM
1 \l 12613 The
way it works in the Fund is that all the money within the Fund has to be spent
on independent producers. So the 37
percent that the CBC has, that money is spent in fact licensing programs from
independent producers. But the
independent producers continue to own the copyright in all the programs.
LISTNUM
1 \l 12614 COMMISSIONER
DUNCAN: Does the money come to CBC
first?
LISTNUM
1 \l 12615 MR.
STURSBERG: Well, it's not that it comes
to the CBC first. The money is earmarked
in such a way that the CBC can spend it with independent producers. It would be exactly the same way as CHUM is
proposing to do it, as I understand it.
The money would be spent on productions that would be commissioned from
independent producers, which is exactly the way the CTF works right now.
LISTNUM
1 \l 12616 COMMISSIONER
DUNCAN: So from your point of view there
is no advantage, one system over the other.
LISTNUM
1 \l 12617 MR.
STURSBERG: Yes, there's a huge
advantage. The huge advantage is that if
you put it into ‑‑
LISTNUM
1 \l 12618 COMMISSIONER
DUNCAN: From the producers' point of
view, the creative people's point of view.
LISTNUM
1 \l 12619 MR.
STURSBERG: No, I don't think there will
be any significant advantage. In fact, I
think it will be better for the producers.
I think that the producers will find themselves in a situation where
they have more doors to knock on and that they will not be wholly dependent on
CTV in the kind of way that they would be were the merger to go through and
were CTV's proposal with respect to benefits to be agreed.
LISTNUM
1 \l 12620 Just
on this point, if you don't mind, I might ask Kirsten to comment on it because
we are very concerned about what this would imply about the relationship to
producers.
LISTNUM
1 \l 12621 MS
LAYFIELD: I think we have heard today
from some producers who have had great relationships with CTV and we are not
going to disavow that. In fact, CTV
has done a great job in the community, and that's what makes us have a great
industry.
LISTNUM
1 \l 12622 I
think the concern that we have is with the self‑directed benefits
package. Again, as Richard was saying,
was the fact that it really pigeonholes or directs those funds to those two
broadcasters.
LISTNUM
1 \l 12623 We
would much prefer a system that would allow the funds to float throughout the
system and actually support a broader industry.
LISTNUM
1 \l 12624 It
would support program producers who produce programming that might not
necessarily fit into either CTV or CHUM's programming strategy. We'd like to have a variety and keep the
industry stronger.
LISTNUM
1 \l 12625 MR. STURSBERG: You know, it's not just cash. It's talent.
LISTNUM
1 \l 12626 And
what worries us is that if this were to go ahead, CTV could also start to,
you know, monopolize talent. Talent is
rare.
LISTNUM
1 \l 12627 And
the way in which this can happen is it can happen formally or it could happen
informally. That essentially they'd set
up a series of first‑look deals with the most gifted people.
LISTNUM
1 \l 12628 So
they would say, "You come around and see us first. And, if we like it, we'll buy it. But you don't go and see anybody else until
we've passed."
LISTNUM
1 \l 12629 And
we think that would be destructive, not just to us, but it would be destructive
to the other broadcasters in the system.
LISTNUM
1 \l 12630 COMMISSIONER
DUNCAN: The CTV has proposed a
number of checks and balances. I take it
that you don't think that those are adequate?
LISTNUM
1 \l 12631 MR. STURSBERG: We think they're unnecessary. We think that the better ‑‑
as I was saying in our opening remarks, the ‑‑ this
transaction creates a series of problems.
LISTNUM
1 \l 12632 We
don't understand why the transaction is in the public interest or what the
benefits would be for the public.
LISTNUM
1 \l 12633 So
our view is rather than create a series of safeguards to deal with the problems
created by the transaction, where there's no public interest in the transaction
in the first instance, it's better simply to decline the transaction, and you
don't have to get into all the safeguards.
LISTNUM
1 \l 12634 COMMISSIONER
DUNCAN: And what about potential checks
on ‑‑ if it were approved, what type of checks could be put in
place as far ‑‑ to control them controlling the
advertising? Can you think of any?
LISTNUM
1 \l 12635 MR. STURSBERG: I think it would be ‑‑
LISTNUM
1 \l 12636 COMMISSIONER
DUNCAN: If it was approved. If the deal was approved.
LISTNUM
1 \l 12637 MR. STURSBERG: No, I think it would be exceptionally
difficult to do that. I think that they
would be exceptionally powerful in the advertising market.
LISTNUM
1 \l 12638 But,
you know, you want to ‑‑ may speak to this, too, David. You're closer than I am.
LISTNUM
1 \l 12639 MR. SCAPILLATI: Well, the bundling/packaging strategy goes
on today. And, you know, they're a big
company and they've made all the competitors better.
LISTNUM
1 \l 12640 So
I have no ‑‑ no problem at all going against a large
competitor when they can make ‑‑ advertisers can make a
decision on where to put their dollars when there's a somewhat level playing
field.
LISTNUM
1 \l 12641 What
I am resisting is where advertisers have to make decisions because they're
being forced to. And it's just simply
wrong. And that makes it uncompetitive
for us.
LISTNUM
1 \l 12642 I
don't mind going against a good competitor.
I embrace that. And today they're
a formidable competitor. 40 percent of
the market. 52, it swings the balance.
LISTNUM
1 \l 12643 MR. STURSBERG: I'd just like to make my little point. Sometimes people think that the price of
advertising inventory is just a function of how many eyeballs that you bring
in. So the cost per thousand is going to
be the cost per thousand. But that's not
the case.
LISTNUM
1 \l 12644 That
many kinds of programs command very substantial premiums in the market because
they're exceptionally desirable to advertisers because the programs have such
tremendous reach or cache or bang within the market.
LISTNUM
1 \l 12645 And
the programs that command the greatest premiums are, in fact, the top 20
American shows.
LISTNUM
1 \l 12646 Those
are the shows where you can get very big premiums.
LISTNUM
1 \l 12647 Now,
if you want to pursue a bundling strategy along the lines that Dave is talking
about, then what you do is you take all your low‑value inventory. And the lowest value inventory I have to tell
you, sadly, is Canadian programs.
LISTNUM
1 \l 12648 And
you say to the advertiser, "You want to buy the stuff you really
like? Do you want to buy these terrific
American shows that carry the big premiums?
Fine, you have to take this as well."
LISTNUM
1 \l 12649 So
that what it does is it gives them a capacity to be able to take the low‑value
inventory, and the CHUM inventory by and large is very like ours. It's relatively lower value. It doesn't command the same premiums as the
big U.S. shows.
LISTNUM
1 \l 12650 And
they'll say, "You must take that inventory from CHUM if you want
to get the top U.S. shows."
LISTNUM
1 \l 12651 Obviously
we can't do that, and so suddenly we find ourselves at a very significant
competitive disadvantage. As of to
Dave's point, what's happening then is he's not competing on a level playing
field. He's competing on one that's
heavily tilted because they can engage in those kinds of bundling strategies.
LISTNUM
1 \l 12652 COMMISSIONER
DUNCAN: I think I understand your point
there.
LISTNUM
1 \l 12653 Could
you just ‑‑ just refresh my memory on the percentage
of U.S. programming that you have?
LISTNUM
1 \l 12654 MR. STURSBERG: We have essentially no U.S. programming
except a couple of strips in the afternoon.
LISTNUM
1 \l 12655 You
want to talk to it?
LISTNUM
1 \l 12656 MS
LAYFIELD: Yes. We have a foreign programming allotment of 20
percent of the schedule.
LISTNUM
1 \l 12657 COMMISSIONER
DUNCAN: All foreign.
LISTNUM
1 \l 12658 MS
LAYFIELD: Yes, all foreign.
LISTNUM
1 \l 12659 COMMISSIONER
DUNCAN: Yes. Okay.
LISTNUM
1 \l 12660 MR. STURSBERG: But what we have is we have, correct me if
I'm wrong, Catherine, two strips in the afternoon. One is "Arrested Development", the
other is "Seinfeld". Sorry,
"Simpsons". We wish we had
"Seinfeld".
LISTNUM
1 \l 12661 No. The "Simpsons" and then we have
"Coronation Street". We'll
have occasional American movies on, and that's pretty much it.
LISTNUM
1 \l 12662 But
I would say this, which is why this links to the public policy issue, the
deeper public policy issue, is that the CBC is the only big conventional
broadcaster that puts Canadian programs on in deep prime time.
LISTNUM
1 \l 12663 The CRTC
defines prime time as 7:00 to 11:00, you know, seven days a week. But the truth is, when Canadians come to
watch television, they watch from 8:00 to 11:00 and the deepest part of that is
Monday to Thursday.
LISTNUM
1 \l 12664 Where
we try to put Canadian programs on is when Canadians are actually watching.
LISTNUM
1 \l 12665 That
block of time for Global or CTV is totally taken up with their American
shows. That's when they put them
on. And they put them on then for good
reason.
LISTNUM
1 \l 12666 So
the Canadian shows fall into the sort of lower part. So it's Saturday evening, it's 7:00
to 7:30, it's 7:30 to 8:00, whatever it happens to be.
LISTNUM
1 \l 12667 But
if the goal of the Commission is ultimately to ensure that the system can allow
Canadian programs to get made, that are watched by Canadians, then to the
extent that you damage the CBC in that respect, to that extent you damage the
goals of the Commission as a whole.
LISTNUM
1 \l 12668 COMMISSIONER
DUNCAN: Thank you, Mr. Stursberg.
LISTNUM
1 \l 12669 THE
CHAIRPERSON: Rita?
LISTNUM
1 \l 12670 COMMISSIONER
CUGINI: Thank you.
LISTNUM
1 \l 12671 You
talk about CanWest does not own two stations in any local market as defined by
the Commission, and therefore there's no structural imbalance that needs to be
remedied.
LISTNUM
1 \l 12672 Do
I take that to mean that you do not ‑‑ you don't recognize
Toronto and Hamilton as one market?
LISTNUM
1 \l 12673 MR. STURSBERG: That's correct.
LISTNUM
1 \l 12674 COMMISSIONER
CUGINI: If I live in Oakville, and
we're going to use Toronto/Hamilton because it just happens to be the city I
know best.
LISTNUM
1 \l 12675 But
if I live in Oakville and at eight o'clock I tune to channel 3 and I'm watching
"House", and then at nine o'clock I go to channel 11 and I'm watching
"Raines", I may have the nights mixed up, and then at ten o'clock I
go back to channel 3 and I'm watching "Brothers and Sisters."
LISTNUM
1 \l 12676 Isn't
that what CTV is talking about?
Because if I'm living in Oakville, I have no idea, nor probably do I
care, that any ‑‑ that one of those shows or two of those
shows are coming from Toronto, and the third one was coming from Hamilton.
LISTNUM
1 \l 12677 MS
LAYFIELD: I live in Oakville, so I can
answer that question.
LISTNUM
1 \l 12678 I
think in terms of programming, you know, you're right. There is a huge amount of variety of
programming on the air at any given time.
LISTNUM
1 \l 12679 I
think given that we're now in a digital world, there's actually hundreds of
channels. I can also watch something
coming from the Atlantic CTV feed at eight o'clock at night at the same
time.
LISTNUM
1 \l 12680 So
I think, in terms of programming, that's probably not as much of the point
we're trying to make. I think it's more
in terms of the advertising markets that we see them to be a little more
distinctive.
LISTNUM
1 \l 12681 COMMISSIONER
CUGINI: But isn't that also the point
that CTV is trying to make, in that those two Global stations, whether I'm
watching them on cable or over the air, can potentially dominate the viewer's
prime time schedule. Because they're
watching in that one market, like I say, both signals, either over the air or
on cable.
LISTNUM
1 \l 12682 And
that's the structure imbalance, therefore, that CTV is addressing when it
says that it wants to correct.
LISTNUM
1 \l 12683 MR. STURSBERG: Well, I've just got to say, I think there's
two or three things we should bear in mind.
LISTNUM
1 \l 12684 First
of all, that the local markets that we're talking about are the local markets
as defined by the Commission. And, in
that sense, you know, Hamilton and Toronto remain distinct local markets.
LISTNUM
1 \l 12685 Second
point is that in both of those markets what has to happen is they have to
continue to put up a local news cast in Hamilton, as they would put a local
news cast for a locally‑licensed station in Toronto.
LISTNUM
1 \l 12686 So
these are ‑‑ these are complet‑‑ and indeed
their ability to be able sell across these two in advertising terms is defined
by the Commission.
LISTNUM
1 \l 12687 But
the other point I would make, which I think is a very important point, is that
when you look at the markets where Global actually has these kinds of extension
arrangements through the CH network into Hamilton or into Victoria and so
on, these are minor markets.
LISTNUM
1 \l 12688 What CTV
is proposing is actually to have two stations in the most important markets in
the entire country. In fact,
overwhelmingly the richest advertising markets in the entire country.
LISTNUM
1 \l 12689 COMMISSIONER
CUGINI: Thank you. Thank you, Mr. Chairman.
LISTNUM
1 \l 12690 THE
CHAIRPERSON: You speak about public
interest, but you, strangely enough, do not mention at all diversity of voices.
LISTNUM
1 \l 12691 For
us this is probably the biggest concern.
As you know, the whole two stick policy is there to assure
diversity. And we've heard from lots of
people very strong views one way or another.
LISTNUM
1 \l 12692 I'd
be very interested to hear what your view is on this part.
LISTNUM
1 \l 12693 MR. STURSBERG: Well, we focus on diversity issues in our
written ‑‑ in our written brief, and we certainly would take
the view that the greatest guarantor of diversity is, in fact, separate
ownership.
LISTNUM
1 \l 12694 You've
heard a lot about that in the course of the testimony over the last little
while, and we would accept that in general terms that is an accurate
description of what happens.
LISTNUM
1 \l 12695 Common
ownership leads inevitably to a kind of cultural uniformity within the
organizations that are commonly owned.
LISTNUM
1 \l 12696 We
take that view. We chose to focus here
rather than on the issue of concentration, rather than on the issue of
diversity, but we would not distance ourselves from anything that you've
already heard from people who are concerned about exactly that point.
LISTNUM
1 \l 12697 THE
CHAIRPERSON: No, but you say this
transaction is not in the public interest, and you only have mentioned
concentration and not diversity of voices.
That's why I'm raising it.
LISTNUM
1 \l 12698 MR. STURSBERG: No, I agree with you. I think we would be equally concerned about
diversity, that's why we cover it in our written brief, but just in the
interests of brevity, I thought we would talk about concentration, because I
wanted to focus on those areas that were most particularly damaging to the CBC
as an organization, rather than the areas of broader public policy.
LISTNUM
1 \l 12699 But,
absolutely, with respect to general concerns about diversity, we share those
concerns.
LISTNUM
1 \l 12700 THE
CHAIRPERSON: Okay.
LISTNUM
1 \l 12701 Any
other questions? Stuart?
LISTNUM
1 \l 12702 COMMISSIONER
LANGFORD: Yes. Thank you, Mr. Chair.
LISTNUM
1 \l 12703 It's
very interesting, and I'm pleased that you could take the time to come out and,
you know, give us even more of your views than in your written presentation.
LISTNUM
1 \l 12704 I
have just one general question.
LISTNUM
1 \l 12705 Remind
me again of why you're not worried about the specialty situation. Because if you're talking about concentration
in ownership, they do move into a kind of rarified world once they ‑‑
LISTNUM
1 \l 12706 I
mean, they're pretty strong now. They're
not going to get any weaker with the ‑‑ with the acquisition
of the CHUM specialties.
LISTNUM
1 \l 12707 Why
aren't you worried about that?
LISTNUM
1 \l 12708 MR. STURSBERG: Well, I'm not unworried about it. I mean, I think would the CBC be in a better
situation if it had more specialty channels?
Absolutely.
LISTNUM
1 \l 12709 It
allows you to diversify your revenue, it allows you to have more different
kinds of advertising inventory to be able to bundle together.
LISTNUM
1 \l 12710 So
all those things are true.
LISTNUM
1 \l 12711 And,
in fact, of course, the more advertising and inventory you have generally, then
the greater your market power becomes.
LISTNUM
1 \l 12712 So,
yes, I would agree with you on that.
LISTNUM
1 \l 12713 But
the thing that preoccupies us most, just because of where we happen to be, as
conventional broadcasters, is the people who are competing against us in the
conventional advertising markets.
Particularly for the reasons I was mentioning earlier, that the kind of
inventory that CHUM has is very similar to the kind of inventory that we
have.
LISTNUM
1 \l 12714 COMMISSIONER
LANGFORD: M'hmm. Let me talk then ‑‑ thank
you for that.
LISTNUM
1 \l 12715 Let
me talk about this plan to put it with the CTV.
LISTNUM
1 \l 12716 And,
of course, it always makes us nervous, or anyone nervous when something seems
just a little too self‑serving.
LISTNUM
1 \l 12717 I'm
not indicating that that's your only purpose in doing it, but it doesn't hurt
you to have 37 percent of these benefits come your way, if everything goes with
the CTF. So ‑‑
LISTNUM
1 \l 12718 MR. STURSBERG: To the contrary. I would agree with that. That would be a good thing for us. And I think it would also be a good thing for
the system as a whole, and I'll tell you why.
LISTNUM
1 \l 12719 Is
the reasons that I mentioned earlier on, that the CBC is the only big‑time
broadcaster that puts shows into real prime time, our performance is better
than anybody else's.
LISTNUM
1 \l 12720 Right
now we take about 50 percent of the money for English drama, and we take about
two‑thirds of the audiences for English drama.
LISTNUM
1 \l 12721 So
if you want to spend your money effectively, in the sense that you want to make
shows that Canadians will watch, you're better course, frankly, is to put the
money into the CBC.
LISTNUM
1 \l 12722 COMMISSIONER
LANGFORD: Well, that's certainly an
approach.
LISTNUM
1 \l 12723 If
they were to put it into the CTF, you would get 37 percent. What would the others get? Can you give me some rough figures?
LISTNUM
1 \l 12724 Do
you happen to know, sort of, off the top of your head, or reasonably what the
other ‑‑ I'm using your chart here more or less, you
know. Going down, what would the others
get? Do you have any sense of that?
LISTNUM
1 \l 12725 MR. STURSBERG: I don't have the envelope splits on me. But the way in which the envelopes were
constructed in the first instance was based on historical draws.
LISTNUM
1 \l 12726 And
so the historical draws within the CTF, whatever it was that people happen to
make, and then they created various mechanisms whereby the envelopes could wind
up or wind down depending on audience performance.
LISTNUM
1 \l 12727 The
only one that was put to one side was the CBC.
LISTNUM
1 \l 12728 And
so the CBC envelope was established at 37, which also represented the
historical draw, but it was not subject to the same competition rules in terms
of the reallocation of envelopes.
LISTNUM
1 \l 12729 So
what they would get is whatever their envelope happens to be now as a
proportion of the total money that's available in ‑‑ in the
CTF.
LISTNUM
1 \l 12730 I
just can't remember if it's ‑‑ if it were ‑‑
if it were CTV is getting 15 percent ‑‑ don't hold me to
the numbers.
LISTNUM
1 \l 12731 COMMISSIONER
LANGFORD: No, no, no, just ‑‑
LISTNUM
1 \l 12732 MR. STURSBERG: Then they would get 15 percent ‑‑
LISTNUM
1 \l 12733 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12734 MR. STURSBERG:
‑‑ you know, if Global is getting ten percent, they would get
ten percent. I think that's the way it
would work.
LISTNUM
1 \l 12735 COMMISSIONER
LANGFORD: And where would City be? Way low in your estimation?
LISTNUM
1 \l 12736 MR. STURSBERG: I don't know.
I don't know what the ‑‑ I don't what the ‑‑
I don't have the CHUM number in my head ‑‑
LISTNUM
1 \l 12737 COMMISSIONER
LANGFORD: Right.
LISTNUM
1 \l 12738 MR. STURSBERG:
‑‑ as to what the split currently is.
LISTNUM
1 \l 12739 COMMISSIONER
LANGFORD: I don't either. I mean, we can get it, but I just thought you
might have it 'cause you have some background with this organization.
LISTNUM
1 \l 12740 Is
there another strategy ‑‑ you've come to us and said don't
deny it, but if you do deny it, make sure we get 37 percent of the deal ‑‑
of the benefits. Or, sorry, if you do
approve it.
LISTNUM
1 \l 12741 Deny
it, but if you do approve it ‑‑ sorry. As soon as I get into numbers at least half
my brain dies.
LISTNUM
1 \l 12742 But
if you do approve it, make sure we get 37 percent.
LISTNUM
1 \l 12743 Give
me another strategy where you wouldn't be guaranteed, where it just doesn't
look so self‑serving.
LISTNUM
1 \l 12744 MR. STURSBERG: I have ‑‑ I have no
embarrassment whatsoever ‑‑
LISTNUM
1 \l 12745 COMMISSIONER
LANGFORD: I'm not asking you to be
embarrassed or not embarrassed.
LISTNUM
1 \l 12746 MR. STURSBERG: But I am not embarrassed.
LISTNUM
1 \l 12747 If
you want to do something in the public interest, it seems to me ipso facto if
the money goes to the public broadcaster, it is in the public interest.
LISTNUM
1 \l 12748 And
I tell you this, which I think is fundamental, and I know that you ‑‑
you thought I was perhaps making a joke, but it is true that if you want to
have success with Canadian television programs, you've got to put them on when
Canadians are watching.
LISTNUM
1 \l 12749 And
we can see it in the numbers that we can generate. Nobody else can generate those numbers.
LISTNUM
1 \l 12750 And
I don't ‑‑ this is no criticism of CTV, it's no criticism
of Global. They don't put big Canadian
shows into deep prime time. I understand
why they don't, and that's fine. It's
not a criticism.
LISTNUM
1 \l 12751 I'm
just saying that if you want to do the best possible thing for the system as a
whole, and your goal is to make Canadian shows that Canadians want to watch, an
investment in the CBC is going to be a better investment than in other people. That's all.
LISTNUM
1 \l 12752 COMMISSIONER
LANGFORD: I didn't think it was a
joke. I thought it was interesting
perspective. But ‑‑
LISTNUM
1 \l 12753 MR. STURSBERG: I think it's a factually‑based
perspective.
LISTNUM
1 \l 12754 COMMISSIONER
LANGFORD: Yes. One man's facts are another man's whatever.
LISTNUM
1 \l 12755 But
let me try another ‑‑ let me try another proposition on
you.
LISTNUM
1 \l 12756 If
you want to do something in the public interest, as you said, for Canadian
broadcasting, another formula might be to ensure that commercial broadcasters
who don't get a statement from the government, who have to start at zero every
year and go out and sell ads for every cent of money they get, don't get off to
a flying start with a ‑‑ with a government handout, that they put
themselves in a position where they can create some Canadian programming, too,
and play it at prime time, and CTV has given us some examples of such
programming that they've financed. And I
think everyone would agree it's pretty successful. Some of it anyway. And they're playing some of it in prime time.
LISTNUM
1 \l 12757 And
now they would like to triple City's budget and see if they can bring them up
into the same stratosphere and to start playing some Canadian programming.
LISTNUM
1 \l 12758 Why
isn't that equally valid?
LISTNUM
1 \l 12759 MR. STURSBERG: In the last proceeding before you we filed a
set of studies that looked at the relative value of the public preferences that
are granted to the different broadcasters in the country.
LISTNUM
1 \l 12760 In
the case of ‑‑ in the case of the large conventional
broadcasters, not only do they have market entry limitation rules, they also
benefit from a series of rules that have to do with simultaneous subsidization,
and the extent to which taxes can be deducted for expenditures in other
countries.
LISTNUM
1 \l 12761 We
tried to make an evaluation of the ‑‑ of the size of those
preferences. And this is quite apart
from, you know, the ‑‑ the incentive program you recently put
in place that allows them to sell an extra couple of minutes of advertising.
LISTNUM
1 \l 12762 And
the size of the preference is possibly larger in dollar value than the size of
the public subsidy that comes to the CBC.
LISTNUM
1 \l 12763 Now,
that's quite apart from the value of the preferences that are associated with
the specialty channels.
LISTNUM
1 \l 12764 COMMISSIONER
LANGFORD: Can I just ask you a
question. Was that a net preference when
it comes to conventional? Or does it
take into account the price of these programs that they're putting on?
LISTNUM
1 \l 12765 MR. STURSBERG: No, this is ‑‑ this is the
relative value of simultaneous substitution in C58. Both of those preferences.
LISTNUM
1 \l 12766 COMMISSIONER
LANGFORD: Simply
simultaneous substitution ‑‑
LISTNUM
1 \l 12767 MR. STURSBERG: No, and C58. You'll see, it's in our filing, and you have
that.
LISTNUM
1 \l 12768 But
my only point in saying this is I think it would be a misunderstanding to
believe that somehow or another there is a public broadcaster, and that there
are private broadcasters.
LISTNUM
1 \l 12769 What
we have in this country is a mix. All
the private broadcasters in this country enjoy significant public preferences.
LISTNUM
1 \l 12770 Quite
apart from that, they also have access to tax credits. They have access to the CTF, which is public
money, in exactly the same way.
LISTNUM
1 \l 12771 When
it comes to specialty services the way the Commission set them in the first
instance, was they would say, "Fine, we give you a licence and we're going
to fix the basic rate that you're going to have to get".
LISTNUM
1 \l 12772 In
very large measure, that is as surely the granting of a public preference as it
is to have cash in the treasury.
LISTNUM
1 \l 12773 So
let me make these points to say that we all find ourselves benefiting from public
preferences, but public preferences of different kinds.
LISTNUM
1 \l 12774 And
the consequences of those preferences and the strategies of the broadcasters
result in different outcomes.
LISTNUM
1 \l 12775
But if you want, and I come back to it one last time, to actually build
audiences for Canadian shows, you're best to put them on when Canadians are
watching.
LISTNUM
1 \l 12776 COMMISSIONER
LANGFORD: Right. And that could be done by a commercial
broadcaster?
LISTNUM
1 \l 12777 MR. STURSBERG: No, it cannot be done by a commercial
broadcaster.
LISTNUM
1 \l 12778 In
fact, CTV and Global will not pull their U.S. programming between 8:00 and
11:00 to accommodate Canadian programs on a systematic basis.
LISTNUM
1 \l 12779 We
do it. That's all we put on between 8:00
and 11:00.
LISTNUM
1 \l 12780 They
can't, because their economics don't allow it.
Their economics run off precisely American programming and simultaneous
substitution.
LISTNUM
1 \l 12781 Their
schedules are, in effect, dictated by what happens in the United States to be
able to guarantee that they can realize those substitution revenues.
LISTNUM
1 \l 12782
What happens in terms of CTV and Global's scheduling for the eight to the
eleven o'clock period is they look to see what the Americans are doing, and
then they put it on at the same time. So
they can get the benefit.
LISTNUM
1 \l 12783 COMMISSIONER
LANGFORD: Right. We're all aware of that sort of paper chase.
LISTNUM
1 \l 12784 Thank
you very much. Those are my questions.
LISTNUM
1 \l 12785 COMMISSIONER
DEL VAL: Just to clarify,
Mr. Stursberg. I think ‑‑
I believe I heard you say that in the ‑‑ when you were talking
about the one station per market rule, you referred to a local market.
LISTNUM
1 \l 12786 So
in your interpretation of the one station per market rule, is the market a
local market rather than the BBM market?
LISTNUM
1 \l 12787 MR. STURSBERG: We're using the CRTC definition of local
markets, which are based on broadcast contours.
LISTNUM
1 \l 12788 COMMISSIONER
DEL VAL: Okay. The A or the B contours?
LISTNUM
1 \l 12789 MR. STURSBERG: I defer to Bev Kirshenblatt.
LISTNUM
1 \l 12790 MS
KIRSHENBLATT: The Global CH stations
aren't local stations in the markets where Global has another station.
LISTNUM
1 \l 12791 So,
for example, Toronto and Hamilton ‑‑ in the case of Hamilton
there would be local programming that is geared towards the Hamilton market.
LISTNUM
1 \l 12792 MR. STURSBERG: Is that the A or the B contour?
LISTNUM
1 \l 12793 MS
KIRSHENBLATT: It's not based on the
(indiscernible).
LISTNUM
1 \l 12794 MR. STURSBERG: Oh, sorry.
I'm mistaken.
LISTNUM
1 \l 12795 THE
CHAIRPERSON: Okay. Can you correct yourself, sir?
LISTNUM
1 \l 12796 MR. STURSBERG: I'm going to ask Bev to correct me. I don't know the correct answer.
LISTNUM
1 \l 12797
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 12798 COMMISSIONER
DEL VAL: No, I asked the wrong
question. It's not A or B is what she's
trying to tell me.
LISTNUM
1 \l 12799 THE
CHAIRPERSON: Yeah ‑‑
LISTNUM
1 \l 12800 MS
KIRSHENBLATT: In defining local ‑‑
we've defined local in looking at the focus or the commitments or conditions of
licence with the focus of programming that these stations have.
LISTNUM
1 \l 12801 So,
for example, in Toronto and Hamilton, although you ‑‑ the
discussion has been they may be one market for advertising. The focus of the local station ‑‑
of the station is different. And it's
not ‑‑ in the case, for example, of the Toronto local ‑‑
the Toronto Global station it's not Toronto/Hamilton. It's simply Toronto.
LISTNUM
1 \l 12802 COMMISSIONER
DEL VAL: Do you have ‑‑
and the precedence you rely on are the ‑ are the 2006 ‑‑
are the decisions that we've made, or can you point us to some precedence? Can you ‑‑ that lead ‑‑
that support that interpretation?
LISTNUM
1 \l 12803 You
can submit that. You can file that
later. Can you sort of do an analysis to
support that interpretation that the ‑‑ that in the one
station per market rule, a market should be interpreted as such rather than the
BBM market? Could you, please?
LISTNUM
1 \l 12804 MS
KIRSHENBLATT: We can. We can follow up, yes.
LISTNUM
1 \l 12805 COMMISSIONER
DEL VAL: Great. Thank you.
So how long do you need?
LISTNUM
1 \l 12806 MS
KIRSHENBLATT: By the end of the week.
LISTNUM
1 \l 12807 COMMISSIONER
DEL VAL: Thank you.
LISTNUM
1 \l 12808 THE
CHAIRPERSON: Okay. Thank you very much. I think that's all our questions for you.
LISTNUM
1 \l 12809 Madam
Boulet, who's next?
LISTNUM
1 \l 12810 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 12811 The
next appearing intervenor on the agenda is the Canadian Conference of the Arts,
and they have agreed to change places with the Alliance of Canadian Cinema,
Television, and Radio Artists, which are number 25 on the agenda.
LISTNUM
1 \l 12812 I
would therefore ask ACTRA to come forward.
LISTNUM
1 \l 12813 Excuse
me, Mr. Steven Waddell ‑‑ Waddell is representing
ACTRA. Sorry, for the pronunciation.
LISTNUM
1 \l 12814 If
you can introduce your panel. And you
will have ten minutes for your presentation.
INTERVENTION
LISTNUM
1 \l 12815 MR. WADDELL: Thank you.
And good afternoon, Mr. Chair, Commissioners, and Commission staff.
LISTNUM
1 \l 12816 My
name is Steven Waddell. I am National
Executive Director of ACTRA, the Alliance of Canadian Cinema, Television, and
Radio Artists.
LISTNUM
1 \l 12817 With
me today is Julie Stewart, a prominent Canadian performer and a member of
ACTRA, a star of Canadian television, who you should recognize from her leading
role in the TV series "Cold Squad".
LISTNUM
1 \l 12818
Also with me today to assist with your questions is Ken Thompson, ACTRA's
Director of Public Policy and Communications.
LISTNUM
1 \l 12819 ACTRA
represents over 21,000 Canadian professional performers working in the English
language recorded media in Canada.
LISTNUM
1 \l 12820 Our
members are the most visible part of this industry. Their creativity brings to life the stories
that resonate with Canadian TV audiences.
But, to be relevant, the work of writers, directors, and performers must
be seen on Canadian television.
LISTNUM
1 \l 12821
In previous hearings before this Commission, you've heard us say this before,
if Canadian creators don't have the opportunity to tell our stories on
television, no one will, and Canadian culture will inevitably atrophy and die.
LISTNUM
1 \l 12822
Thank you for the opportunity to speak with you today at this very important hearing.
LISTNUM
1 \l 12823 When
our number one private broadcasting network purchases our number three private
broadcasters ‑‑ private broadcaster, it's clear that there
will be significant changes impacting our broadcasting system.
LISTNUM
1 \l 12824
In our view, however, these changes will not come without a cost and must
benefit the system as a whole.
LISTNUM
1 \l 12825 In
ACTRA's opinion this application by CTV fails our broadcasting system. So please note for the record that ACTRA
opposes this application as proposed by CTV.
LISTNUM
1 \l 12826 In
our written submission we focused on three issues, which we believe are
significant in this review, and which we would like to revisit in this
presentation.
LISTNUM
1 \l 12827 Number
one, the negative impact of media
concentration. Number two, the
inadequate valuation of the proposed benefits, which must be increased in our
view, and the under‑representation of drama, which requires the greatest
possible allocation of tangible benefits to the production of ten point
Canadian drama.
LISTNUM
1 \l 12828 MS
STEWART: Our issue with media
concentration is quite simple. Fewer
Canadian broadcasting networks means fewer choices for Canadians to access
Canadian dramas and other Canadian programs.
LISTNUM
1 \l 12829 While
we look forward to participating in this fall's diversity of voices policy
review, we understand the current application of CTV, as well as the pending
ownership applications by CanWest, Global, and Astral Media, will be assessed
in light of the existing regulations and policies.
LISTNUM
1 \l 12830 As
a consequence, the Commission's decision to go forward with these major
ownership applications, using existing rules, will diminish the relevance of
that important policy review.
LISTNUM
1 \l 12831 Your
approval of applications like CTV's and CanWest Global's in the intervening
period will reduce the Commission's ability to influence the ownership
structure of the Canadian media for the future.
LISTNUM
1 \l 12832
We are not alone in expressing our concerns about the effects of media
consolidation on the broadcasting system.
Our views are shared by a number of other prominent industry
stakeholders.
LISTNUM
1 \l 12833 But
while it is essential for ACTRA and our partners to give you authoritative,
comprehensive, and contemporary research and data about how media concentration
has and will continue to affect Canadian broadcasting and other media, ACTRA
and other like‑minded groups do not have the resources needed to
undertake this kind of research.
LISTNUM
1 \l 12834 In
this application CTV has proposed to provide a tangible benefit in the amount
of $1.5 million to fund such third party education and research studies as the
CRTC deems most valuable.
LISTNUM
1 \l 12835 Therefore,
we propose that one half of these research funds be set aside for the benefit
of a public interest coalition comprised of stakeholders such as ACTRA, other
unions and guilds, associations of producers, the Canadian Film and Television
Industry Coalition, and other public interest organizations such as the Friends
of Canadian Broadcasting.
LISTNUM
1 \l 12836
An established research institute, such as the Canada Centre for Policy
Alternatives, could define the parameters, commission, and oversee appropriate
research and studies.
LISTNUM
1 \l 12837
We now want to comment on the benefits package offered by CTV in this
application.
LISTNUM
1 \l 12838
As you know, ACTRA and the Coalition of Canadian Audio‑visual Unions, the
CCAU, have been calling for the reinstatement of English language drama
expenditures and scheduling requirements for Canada's private broadcasters for
some time now.
LISTNUM
1 \l 12839 CTV's
application, along with the recent broadcaster financial reports from the
Commission, shows that Canada's private broadcasters are spending less again
this year on Canadian drama, but they are spending almost seven times more on
foreign predominantly Hollywood dramas.
LISTNUM
1 \l 12840 As
we have had to say repeatedly to this Commission, the 1999 television policy
let the private broadcasters off the hook and we want the CRTC to put them back
on the hook.
LISTNUM
1 \l 12841 Because
Canada's private broadcasters have failed to live up to their commitments to
this Commission and the Canadian public, and clearly must be required by
regulation to produce Canadian drama.
LISTNUM
1 \l 12842
In its submission, CTV says it plans to re‑aggregate audiences and
provide CHUM Services with access to CTV's excess U.S. programming that is
consistent with CHUM's brands, programming niches, and styles.
LISTNUM
1 \l 12843 Again,
quoting from its submissions, CTV says: "For conventional television, the
strength of the schedule is measured by the amount of programs that rank in the
top 20."
LISTNUM
1 \l 12844 According
to BBM for the week of March 5th to the 12th, 2007 the top 20 programs in Canada
were predominantly U.S. shows.
LISTNUM
1 \l 12845 They
dominate most of Canada's private broadcaster's prime time schedules;
"American Idol", "CSI", "CSI Miami", "CSI
New York", "Law and Order", "The Amazing Race",
"Cold Case", "Criminal Minds", "The Class", and
"Lost", to name several.
LISTNUM
1 \l 12846
So, according to CTV, the synergy that will bring about the revival of the
Citytv stations effectively means that the top 20, mainly U.S. licenced shows,
will be re‑purposed and shown on its Citytv stations.
LISTNUM
1 \l 12847
It's no comfort that CTV has committed that no more than ten percent of the
overall programming it plans for Citytv stations in any broadcast week will
duplicate programming aired on CTV stations.
LISTNUM
1 \l 12848 Ten
percent of the overall programming could translate into almost three prime time
hours each day for seven days in each week.
That's 21 hours per week of U.S. drama programming in prime time that
will be aired on Citytv stations.
LISTNUM
1 \l 12849 COMMISSIONER
LANGFORD: Ms Stewart, I never
before interrupted someone giving their presentation, but I just thought it
might help you to know that they ‑‑ yesterday CTV committed to
having a zero overlap. They have dropped
the ten percent.
LISTNUM
1 \l 12850 So
just helping you in formulating your arguments.
I'm sorry to interrupt you, but I thought you might want to know that.
LISTNUM
1 \l 12851 MS
STEWART: So we're making some
headway. That's excellent.
LISTNUM
1 \l 12852 COMMISSIONER
LANGFORD: You're getting there. On the long march. Sorry to interrupt again. Go ahead.
LISTNUM
1 \l 12853 MS
STEWART: That's quite all right. I still
will continue in saying that more exposure of popular U.S. shows is going to
mean less exposure for Canadian dramas.
LISTNUM
1 \l 12854 MR. WADDELL:
The figures provided by CTV show that
together CTV and CanWest will control two‑thirds of Canada's English
language conventional television revenues, and will have a market share greater
than 60 percent.
LISTNUM
1 \l 12855 This
is what CTV claims is the twin stick approach to the markets it shares with
CanWest Global, and will ensure competitiveness.
LISTNUM
1 \l 12856 How
concepts in broadcasting change over time.
LISTNUM
1 \l 12857
The original twin stick operations were designed in the early 1960s to ensure
that when the CTV network came to local markets, the local privately owned
affiliates of the CBC were not disadvantaged.
LISTNUM
1 \l 12858 By
ensuring continued access to local programming, as well as the two national
networks, it was a policy that favoured diversity.
LISTNUM
1 \l 12859 Now
in the view of the applicant it has become merely a means for private
broadcasters to amortize costs across a greater audience.
LISTNUM
1 \l 12860 If
CTV obtains approval to maintain ownership of the Citytv stations, and has two
over the air televisions licences in each of the five English language markets,
CTV will be fundamentally transformed into the dominant player in Canadian
television.
LISTNUM
1 \l 12861 That's
why we urge you to approve exceptions to the Common Ownership Policy only with
the A Channel group of stations. In our
view, CTV should be required to divest its Citytv stations.
LISTNUM
1 \l 12862
The Citytv stations have a stronger financial base, are much more attractive,
and would clearly contribute more to diversity of voices in the broadcasting
system if divested by CTV.
LISTNUM
1 \l 12863 This
would seem to provide a more realistic, although in our view still unlikely,
opportunity for a third national player to emerge.
LISTNUM
1 \l 12864
To be clear, ACTRA takes the position that the CTV acquisition of CHUM should
not qualify for an exception to the CRTC Common Ownership Policy to own more
than a single station per market.
LISTNUM
1 \l 12865 The
exception should be limited to the A Channel group of stations.
LISTNUM
1 \l 12866 However,
should the Commission approve the exemption, then tangible benefits in the
amount of 15 percent of the value of the transaction would be inappropriate and
a reasonable amount for CTV to return directly to the communities and to the
broadcasting system in exchange for CTV achieving such a dominant market
position through this acquisition.
LISTNUM
1 \l 12867 Now
we want to turn to the tangible benefits offered in the package.
LISTNUM
1 \l 12868 MS
STEWART: ACTRA and the CCAU are in the
forefront of the campaign to raise awareness of the desperate state of English
language Canadian television drama.
LISTNUM
1 \l 12869 We
are concerned about the level of investment, the on air scheduling, the lack of
adequate promotion, and the type of Canadian dramatic programs being made.
LISTNUM
1 \l 12870 CTV
has recognized the need to fund Canadian drama productions by allocating some
of the transfer benefits package to drama programming.
LISTNUM
1 \l 12871 However,
this amount is far too low to have a significant impact on the production of
new English language Canadian drama or a positive influence on the Canadian
Broadcasting System as a whole.
LISTNUM
1 \l 12872 After
reaching a peak in 1999/2000, the volume of production of English language
fiction drama declined to a low point in 2002 and 2003.
LISTNUM
1 \l 12873 Since
then volumes have risen in '05/'06, but that's still ‑‑ it's
still 20 percent lower than the peak year of 1998.
LISTNUM
1 \l 12874
Producing high qualify drama programs requires more creative technical and
financial resources than any other programming genre.
LISTNUM
1 \l 12875 But
drama production trains and develops and employs Canadian writers, actors,
directors, editors, technicians and other key creative individuals. And dramatic programming best speaks to our
Canadians and tells us more about our country, our landscape, our stories, our
myths and culture than any other programming genre.
LISTNUM
1 \l 12876 We
contend that maintaining drama expenditures and scheduling requirements are
what is needed.
LISTNUM
1 \l 12877 We
do not accept that the proposed benefits in this package are in any measure a
substitute for regulation.
LISTNUM
1 \l 12878 A
2004 study confirms that broadcast licence fees paid by Canada's private
broadcasters are substantially lower than those in any other English language country.
LISTNUM
1 \l 12879 As
a consequence, Canadian producers must look to other markets and other sources
for close to 82 percent of a production's financing.
LISTNUM
1 \l 12880 On
numerous prior occasions the Commission has acknowledged the crucial role that
dramatic programs play in our broadcasting system and in our lives.
LISTNUM
1 \l 12881 The
current application by CTV seeks approval to purchase Canada's third largest
private conventional broadcaster.
LISTNUM
1 \l 12882 This
provides an historic opportunity for the Commission to act to begin to change
the situation.
LISTNUM
1 \l 12883 We
say that CTV must direct more resources in this benefits package to the
production of ten point English language Canadian drama.
LISTNUM
1 \l 12884 MR. WADDELL: Let's look at the proposed benefits package
for a moment.
LISTNUM
1 \l 12885 For
a start, it's inappropriate for CTV to exclude the debts, since the value of
the enterprise being acquired includes debt.
LISTNUM
1 \l 12886 CTV
was aware it was acquiring debt and was assuming obligations for the continuing
payment of tangible benefits which arose from CHUM's acquisition of CKVU TV in
2001 and Craig Media in 2004.
LISTNUM
1 \l 12887 These
factors must have been taken into account in the calculations of the CTV
purchase offer.
LISTNUM
1 \l 12888 We
agree with the Director's Guild of Canada, analysis of the debt is part of the
purchase. When the $270 million debt is
included in the evaluation, an additional 27 million benefits becomes due.
LISTNUM
1 \l 12889 We
propose this additional 27 million should be specifically allocated to ten
point Canadian drama.
LISTNUM
1 \l 12890 The
Commission should set the benchmark to determine the incremental nature of
benefits as against both CHUM and CTV.
LISTNUM
1 \l 12891 If
only CHUM is used as the benchmark, then CTV will just move its spending to
CHUM and there will be no added benefit in the system.
LISTNUM
1 \l 12892 This
ensures that benefits will indeed be incremental to the system.
LISTNUM
1 \l 12893 To
recap. We're proposing that the five
percent premium for the exceptions to the Commission's one conventional station
per market rule should be calculated using the total value of the conventional
television assets.
LISTNUM
1 \l 12894 We
agree with the Director's Guild the total value should be five percent of 104
million, which is 5.2 million, which is the amount that CTV paid for the
conventional stations.
LISTNUM
1 \l 12895 It
should also pay five percent of the debt of 270 million, which equals 13.5
million.
LISTNUM
1 \l 12896 So
the ‑‑ so the total premium to be paid for the exception to
the Commission's one station per market rule should be, we say, 18.7 million.
LISTNUM
1 \l 12897 In
addition, it is ACTRA's opinion that two‑thirds of the total benefits
package proposed by CTV should be allocated to ten point Canadian drama.
LISTNUM
1 \l 12898 This
amount, or 68.31 million, should go to programs and series produced at arm's
length from CTV. The balance of the
benefits package would then need to be restructured.
LISTNUM
1 \l 12899 That
concludes our presentation. Thank you
for your attention. We welcome your
questions. And we did it within ten
minutes.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 12900 MR. WADDELL: Thank you.
LISTNUM
1 \l 12901 THE
CHAIRPERSON: Thank you. I congratulate you on the speed of your
delivery.
‑‑‑ Laughter /
Rires.
LISTNUM
1 \l 12902 THE
CHAIRPERSON: Let's go to page five,
first paragraph.
"Fewer Canadian broadcasting networks
means fewer choices for Canadians to access Canadian dramas and other Canadian
programs."
LISTNUM
1 \l 12903 We
have had a lot of discussion here about what this merger means in terms of
diversity of voices, media concentration, et cetera.
LISTNUM
1 \l 12904 I
don't understand the logic of this. If
there are fewer networks it may be undesirable for a lot of reasons, but why
does it mean fewer access to Canadian dramas or other Canadian programs? I mean, the obligations on Canadian content
will be there whether you have one network or two, so what brings you to this
conclusion?
LISTNUM
1 \l 12905 MR.
WADDELL: Well, it goes to the diversity
of voices issue, which you are going to be dealing with later in the fall, in
terms of there are fewer opportunities for Canadian producers and other
programmers, writers and directors, performers to be able to pitch to different
networks that might have different programming schemes, and so on, and so
different program buyers and developers, and so on.
LISTNUM
1 \l 12906 So
just having two major networks and that's all the choice there is, doesn't give
the opportunity for creative folk and producers to be able to pitch different
types of programming, different genres, and so on, to ‑‑
LISTNUM
1 \l 12907 THE
CHAIRPERSON: Oh, you mean variety of
Canadian programming. You don't mean
overall total programming but just the variety of programs.
LISTNUM
1 \l 12908 MR.
WADDELL: The variety of
choices, and so on, which creates additional programming and programming
types. Of course, appreciating where we
come from, drama is particularly important to our membership.
LISTNUM
1 \l 12909 THE
CHAIRPERSON: On page 20, the second last
paragraph, you say:
"So the total premium to be
paid for the exception to the Commission's one station per market rule should
be $18.7 million." (As read)
LISTNUM
1 \l 12910 You
seem to suggest that you can buy an exception through additional premiums.
LISTNUM
1 \l 12911 That
is not exactly the way we normally look at these things.
LISTNUM
1 \l 12912 MR.
WADDELL: I appreciate that, but that is
what it's coming down to it would appear.
LISTNUM
1 \l 12913 THE
CHAIRPERSON: So that is your
interpretation.
LISTNUM
1 \l 12914 MR.
WADDELL: Yes. I mean, we would prefer, as we said,
that the CHUM stations be divested and that the purchase go through with
respect to the A‑Channel. We think
that is a better way to go.
LISTNUM
1 \l 12915 THE
CHAIRPERSON: Well, if that is the
case ‑‑
LISTNUM
1 \l 12916 MR.
WADDELL: But if you don't go that route,
then we are looking for more money for production, yes.
LISTNUM
1 \l 12917 THE
CHAIRPERSON: All right. So if you have your wish ‑‑
LISTNUM
1 \l 12918 MR.
WADDELL: That is what it comes down to.
LISTNUM
1 \l 12919 THE
CHAIRPERSON: ‑‑ the City channels get divested in the A‑Channels
are retained and this premium goes down.
LISTNUM
1 \l 12920 Is
that the logic?
LISTNUM
1 \l 12921 MR.
WADDELL: That would not necessarily be
the logic, but yes, that would probably be the consequence.
LISTNUM
1 \l 12922 THE
CHAIRPERSON: I see. All right.
Thank you.
LISTNUM
1 \l 12923 MR.
WADDELL: Thank you.
LISTNUM
1 \l 12924 THE
CHAIRPERSON: Rita, you had some
questions I do believe?
LISTNUM
1 \l 12925 COMMISSIONER
CUGINI: Yes, I do. Thank you.
LISTNUM
1 \l 12926 Just
to follow up on that because, as usual, your written submission and your oral
presentation are quite clear, or at least they make your position very
clear. If we were to take you up on your
recommendation and ask CTV to divest ‑‑ or we approved the
acquisition of the A‑Channels and not the Citytv channels, which of your
concerns, outlined both in your written submission and your oral presentation
this afternoon, would go away?
LISTNUM
1 \l 12927 In
other words, why is this a better choice for you?
LISTNUM
1 \l 12928 MR.
WADDELL: Well, I think the CHUM assets
are definitely in a better financial position than the A‑Channel assets
and, as we say in our submissions and today, there is a possibility that the
CHUM assets, if it were allowed to continue, could find a buyer that might
create a third network and therefore a competitive environment and an
opportunity to ‑‑
LISTNUM
1 \l 12929 COMMISSIONER
CUGINI: But there are a lot of ifs and
mights and mays in your statement.
LISTNUM
1 \l 12930 MR.
WADDELL: Sure. Yes.
LISTNUM
1 \l 12931 COMMISSIONER
CUGINI: So that leads me to ask once
again, I mean, what led you to make this recommendation in a way that makes it
a more palatable transaction for your members?
Because again, a lot of whats, what ifs and mights and mays in that
statement.
LISTNUM
1 \l 12932 MR.
WADDELL: Yes. Well, there are a lot of what ifs, there is
no question about that.
LISTNUM
1 \l 12933 Basically
we think that having the CHUM assets divested would give an opportunity for a
third network which would create a competitive environment, instead of having
two dominant players in the broadcasting system.
LISTNUM
1 \l 12934 COMMISSIONER
CUGINI: I don't know if you
followed the interventions this morning, but there were a number of producers
here who spoke very highly of this transaction and gave us a history of their
relationship, both with CTV and CHUM and the City stations in particular,
including the specialty services.
LISTNUM
1 \l 12935 Did
that give you any comfort? Did anything
you heard this morning give you any comfort at all?
LISTNUM
1 \l 12936 MR.
WADDELL: Well, certainly I respect the
presentations from our member Brent Butt, and of course Linda and Stephen from
Epitome Pictures, but, you know, I also listened to Bruce Harvey tell you about
what it is like to produce. I have a
great deal of sympathy, obviously, because he was singing our song with what
Bruce was saying.
LISTNUM
1 \l 12937 Ms
Schuyler and Mr. Stohn are doing very well, thank you, and "Corner
Gas" is always ‑‑ certainly "Degrassi" and
"Corner Gas" are both held up as being shining examples of what
Canadian production should be, could be and we aspire toward.
LISTNUM
1 \l 12938 They
are fortunate in that they have been producing for number seasons, certainly in
the case of "Degrassi" have been producing for quite a number of
years, and are excellent products.
LISTNUM
1 \l 12939 For
those who are others who come before you, including Mr. Harvey and others, you
will hear from the CFTPA which represents the producers, I believe that
they will be saying that this proposed acquisition is not going to work
necessarily in the favour of most producers because it reduces the opportunity
overall and the ability for producers to produce because there is just not
enough money in the system.
LISTNUM
1 \l 12940 I'm
going to go back to our point which we have made so many times before this
Commission, that this Commission, we believe, needs to reestablish regulations
with respect to scheduling and expenditure requirements on Canada's private
broadcasters particularly.
LISTNUM
1 \l 12941 As
Ms Stewart has said in the presentation, Canada's private broadcasters are
paying the lowest licence fees of any broadcasters in the English‑speaking
world. That has to change. That just can't go on. We can't continue ‑‑ we
can't survive ‑‑ our members, our performers cannot survive in
this environment, there is just not enough work opportunity for Canadian
performers, writers, directors and producers.
LISTNUM
1 \l 12942 We
hope the Commission will be listening to our pleas as we have been making them,
and I think quite articulately over the past seven years, to go back and
change the regulation, reinstate those regulations.
LISTNUM
1 \l 12943 COMMISSIONER
CUGINI: Well, thank you very much.
LISTNUM
1 \l 12944 MR.
WADDELL: Thank you.
LISTNUM
1 \l 12945 COMMISSIONER
CUGINI: Thank you,
Mr. Chairman. Those are my
questions.
LISTNUM
1 \l 12946 THE
CHAIRPERSON: Stuart, did you have a
question?
LISTNUM
1 \l 12947 COMMISSIONER
LANGFORD: Just a couple.
LISTNUM
1 \l 12948 I
wanted you to look at it from another way for a second, just to make sure
that ‑‑ I'm sure you people kick this around in
committees and conferences but still you might have missed something and
we are only going to get the one chance to talk to you.
LISTNUM
1 \l 12949 You
have talked here about, you know, don't approve this as filed, but if you do
approve it put a premium, you know, an extra 5 percent here and then don't
allow the debt there and crank it up here and crank it up there. That's all well and good and I understand the
position and if it were just an endless pile of money who could object to it,
it is all going to a good cause, Canadian programming.
LISTNUM
1 \l 12950 But
the money is going to have to come from somewhere and we have heard that from
earlier intervenors. This just isn't an
endless money tree I assume, or if it is I would like to get a little sapling
or something so I could start one in my garden.
LISTNUM
1 \l 12951 So
doesn't it really mean just more secretaries getting fired and more ad salesmen
being laid off and more marketers being laid off and more receptionists out the
door? They are going to find
the synergies somewhere. I mean, if
it is not an endless money tree, aren't you really saying: Help us, but help us on the backs of
another bunch of vulnerable people who are in broadcasting in a different
way? They are not the actors, and they
are not the producers and they are not the directors maybe, they don't get the
lights on them very much, but they might get the boot.
LISTNUM
1 \l 12952 Have
you thought about it in that way? I
mean, how much of a burden do you want to put on whoever buys this for
efficiencies, because we all know where those efficiencies are going to come
from, and that is not something we regulate.
Once we let that out of the bottle, that genie is going to go and wreak
havoc wherever it goes, because that is the rule of the marketplace.
LISTNUM
1 \l 12953 MS
STEWART: I think we understand that it
is not an endless money tree. I think a
number of us are actually painfully aware of that right now.
LISTNUM
1 \l 12954 I
even appreciate the reality of the fact that, you know, a private broadcaster
such as Mr. Fecan can say that, you know, love it or hate it we have to
use the American programs to finance Canadian programs. But if there was some balance we might not
have to reiterate what we are saying time and time again about the fact that
the Canadian shows are not made, especially, as we pointed out again here
today, since the 1999 regulations loosened on what qualifies as Canadian
content the American spending, the money on American programming, is not
resulting in more Canadian shows. We can
see that by looking at graph after graph after graph of all the American shows
that we are getting to watch and the fact that the Canadian shows are not
getting made.
LISTNUM
1 \l 12955 That
doesn't mean that we are asking for more money, we are asking for a balance in
the money that comes to Canadian programs as opposed to ‑‑
LISTNUM
1 \l 12956 COMMISSIONER
LANGFORD: All right.
LISTNUM
1 \l 12957 That
may be a bigger issue than this and this is certainly the sort of proposition
you have put in the over‑the‑air examination.
LISTNUM
1 \l 12958 But
in terms of issue, I put a proposition to Mr. Fecan yesterday, and if his hair
wasn't white when I started it was certainly pure white when I finished, but it
is not so Bolshevistic, I don't think, and I wonder what you would think of it.
LISTNUM
1 \l 12959 My
proposition was: Okay, maybe we don't
hate you for a lot more money on the benefits, as you are saying, because it is
a pretty big pot right now, but we ask you to do something different with it,
maybe another half hour a week of priority programming, or a half‑hour
week of local programming, or another half hour week of drama, if we really
want to get detailed, and put it somewhere at least close to prime time, closer
than you have been.
LISTNUM
1 \l 12960 Would
that strike you as a reasonable kind of trade‑off, to look at it in a
different way rather than always just the total amount?
LISTNUM
1 \l 12961 MS
STEWART: Sure.
LISTNUM
1 \l 12962 COMMISSIONER
LANGFORD: Does that sound like a
reasonable proposition?
LISTNUM
1 \l 12963 MS
STEWART: I don't know. I mean, really I want to see Canadian shows,
as has been said earlier today, during the times when people are going to watch
television.
LISTNUM
1 \l 12964 COMMISSIONER
LANGFORD: Yes.
LISTNUM
1 \l 12965 MS
STEWART: I'm tired of seeing shows ‑‑
you know, I'm very, very happy for the success of "Corner Gas", I
think it is a great example of what can happen when a show gets put in prime
time and gets properly advertised, but there are some stories that
unfortunately didn't work out that way, and I could give you some personal
examples although I don't know if I want to get into that right now.
LISTNUM
1 \l 12966 COMMISSIONER
LANGFORD: No, we know them. We got them.
LISTNUM
1 \l 12967 But
would you agree just generally there maybe some other ways to skin this cat, to
use that old expression ‑‑
LISTNUM
1 \l 12968 MR.
WADDELL: Sure.
LISTNUM
1 \l 12969 COMMISSIONER
LANGFORD: ‑‑ that we might be able to go at it?
LISTNUM
1 \l 12970 MR.
WADDELL: Sure.
LISTNUM
1 \l 12971 COMMISSIONER
LANGFORD: Let me ask you one other ‑‑
LISTNUM
1 \l 12972 MR.
WADDELL: Sure. That is what we have been saying, is
that we feel that there should be some regulation placed on the broadcasters to
require more Canadian programming, because that is what we have right now.
LISTNUM
1 \l 12973 COMMISSIONER
LANGFORD: I know.
LISTNUM
1 \l 12974 MR.
WADDELL: We have been waiving these
around for years, which are the prime time schedules ‑‑
LISTNUM
1 \l 12975 COMMISSIONER
LANGFORD: Let me ask you to
reconsider ‑‑
LISTNUM
1 \l 12976 MR.
WADDELL: ‑‑ which are all blue showing American programming
instead of red.
LISTNUM
1 \l 12977 COMMISSIONER
LANGFORD: That might make Mr. Harper
happy, he might misunderstand that ‑‑
LISTNUM
1 \l 12978 MR.
WADDELL: There you go.
LISTNUM
1 \l 12979 COMMISSIONER
LANGFORD: ‑‑ and think it is Conservative programming or
something, who knows.
LISTNUM
1 \l 12980 MS
STEWART: It does make him happy.
LISTNUM
1 \l 12981 COMMISSIONER
LANGFORD: No more political jokes. I will pay for that.
LISTNUM
1 \l 12982 Let
me ask you one other sort of way, another way to look at it, another way
to turn the telescope.
LISTNUM
1 \l 12983 You
are worried about them getting bigger and may be losing some diversity of
voices.
LISTNUM
1 \l 12984 On
the other side of that equation, though, is it not arguable that they have paid
a big buck for this, they have a lot invested and they are professional
broadcasters. They are probably as good
as any we have in Canada for sure.
LISTNUM
1 \l 12985 They
are committed to spending a heck of a lot of money ‑‑ I'm not
trying to make the case for them, I'm just trying to look at it from another
way ‑‑ if we say no, if we say you can't have City or you
can't have the "A", or whatever we say, it is conceivable this could
be bought by someone who really doesn't have the experience and doesn't have
the depths of pockets that they think they have. We have had examples of people getting into
the television business in this country who had to get out and get out in their
socks because they just didn't have it.
LISTNUM
1 \l 12986 Isn't
it in a way maybe safer to try to find some diversity of voices, some
programming safeguards than to just leave the whole thing open and pray that if
we put this back on the market another person with their kind of experience
will come along and buy it?
LISTNUM
1 \l 12987 MS
STEWART: I would just like to point out
that maybe they are pouring buckets into it, but the fact of the matter is that
this isn't like some other businesses, they are making that money and they are
pouring that money into something that is publicly owned. The airwaves are publicly owned and so the
business that they are conducting is using something that we all own together,
not the private broadcasters.
LISTNUM
1 \l 12988 COMMISSIONER
LANGFORD: Right. I agree with you.
LISTNUM
1 \l 12989 MR.
WADDELL: Right. And the benefits that they accrue are mainly
through simultaneous substitution, right, which is a huge subsidy for private
broadcasters.
LISTNUM
1 \l 12990 COMMISSIONER
LANGFORD: I agree with that, but
you haven't answered my question if it is answerable.
LISTNUM
1 \l 12991 MS
STEWART: But I also think ‑‑
LISTNUM
1 \l 12992 COMMISSIONER
LANGFORD: Is there a big risk? Are you willing to take the risk of
dropping ‑‑
LISTNUM
1 \l 12993 MS
STEWART: I think one of the problems
right now ‑‑
LISTNUM
1 \l 12994 COMMISSIONER
LANGFORD: ‑‑ these people and taking Brand "X",
because we don't know who is coming around the corner with a bag of money.
LISTNUM
1 \l 12995 MS
STEWART: I think one of the difficulties
that we have run into so far is that the Canadian television industry, you
know, relatively to behemoth that is next to us, being the States, is
relatively young. We are relatively
inexperienced.
LISTNUM
1 \l 12996 But
one of the problems with only having one or two or three major networks making
all the programs, making all the creative decisions, choosing who is going to
be making the shows, is limiting the number of people who are actually learning
how to do it and develop the talent.
LISTNUM
1 \l 12997 Talent
is not border‑specific.
At this point in time we need to develop the people who don't
yet know how it works. The only way we
are going to do that is if we keep it from becoming too monopolized.
LISTNUM
1 \l 12998 COMMISSIONER
LANGFORD: Thank you.
LISTNUM
1 \l 12999 Those
are my questions, Mr. Chair.
LISTNUM
1 \l 13000 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13001 I
think just before we leave I can't help but correct you.
LISTNUM
1 \l 13002 I
do not accept ‑‑ speaking for myself personally ‑‑
at all the premise that you suggest that you can buy yourself a little
hole. If we oppose this deal it is
because we feel it complies with the rules or is a legitimate exception here.
LISTNUM
1 \l 13003 The
size of the benefits is important, but that is not going to drive as to whether
we allow the deal or not.
LISTNUM
1 \l 13004 That
being said, let's take a 10‑minute break.
LISTNUM
1 \l 13005 Thank
you.
LISTNUM
1 \l 13006 MR.
WADDELL: Thank you, Mr. Chairman.
‑‑‑ Upon
recessing at 1455 / Suspension à 1455
‑‑‑ Upon resuming
at 1509 / Reprise à 1509
LISTNUM
1 \l 13007 THE
SECRETARY: We will now proceed with the
next intervenor, the Writers Guild of Canada, and Ms Maureen Parker will
introduce her panel.
LISTNUM
1 \l 13008 After
which you will have 10 minutes for your presentation.
LISTNUM
1 \l 13009 Ms
Parker.
INTERVENTION
LISTNUM
1 \l 13010 MS
PARKER: Thank you.
LISTNUM
1 \l 13011 Good
afternoon, Mr. Chairman, members of the panel, Commission staff, ladies and
gentlemen. My name is Maureen Parker and
I am the Executive Director of the Writers Guild of Canada.
LISTNUM
1 \l 13012 To
my left is Kelly Lynne Ashton, Director of Industrial and Policy Research at
the Guild and on my right is our Policy Consultant, Robert Armstrong of
Communications Media Inc.
LISTNUM
1 \l 13013 The
Writers Guild of Canada is a national association representing more than 1800
screenwriters working in film, television, radio and digital production in
Canada.
LISTNUM
1 \l 13014 We
care deeply about maintaining the health and integrity of the Canadian
broadcasting system and, in particular, encouraging the production of high
quality Canadian priority programming.
LISTNUM
1 \l 13015 The
WGC supports the CTVglobemedia application to acquire CHUM's assets. Like so many of the intervenors in this
hearing, we are big fans of CTV. CTV has
supported high quality Canadian programming with TV series like Corner Gas and
Movies of the Week such as "The Man Who Lost Himself" at a time when
less and less Canadian drama is being produced for other broadcasters.
LISTNUM
1 \l 13016 While
we are concerned about media consolidation, we feel that ‑‑ we
fear that, rather, given the highly competitive nature of the international
communications market, consolidation is inevitable if Canada is to have
entities strong enough to preserve our distinct broadcasting system. The bottom line is that the Waters family
wanted to sell CHUM Limited and CTVglobemedia is probably the most appropriate
buyer.
LISTNUM
1 \l 13017 Given
the size of the proposed acquisition; its potential consequences for the
Canadian Broadcasting System and certain specific aspects of the application,
the WGC recommends that the Commission approve the application, but subject to
certain changes to CTVglobemedia's proposals.
These are the value of the transaction for benefit purposes, the size of
the benefits package as a percentage of the value of the transaction, the
incrementality of the benefits package and the allocation of additional
benefits to the funding of 10 point drama production.
LISTNUM
1 \l 13018 Since
the publication of the CRTC's `99 television policy, the value of debt has been
included in all decisions that required assessing the volume of tangible
benefits to be paid with respect to the acquisition of television and radio
assets. The Writers Guild considers that
the $270 million of CHUM debt assumed by CTVglobemedia should be included in
the value of the transaction for the purpose of determining the amount of
tangible benefits.
LISTNUM
1 \l 13019 Furthermore,
in our written intervention on the CTVglobemedia application, we demonstrated
that the allocations concerning the relative value of CHUM's radio assets and
its television assets are sensitive to the assumptions made by the
CTVglobemedia and that their assumptions tend to diminish the relative value of
television compared to the value of radio.
This is important because the CRTC's policies require that tangible
benefits be paid at a minimum rate of 10 percent of the value of television
assets as compared to a minimum rate of 6 percent of the value of radio.
LISTNUM
1 \l 13020 To
the extent that CTVglobemedia has undervalued television relative to radio, the
overall value of the proposed benefits package is lower than it should be.
LISTNUM
1 \l 13021 As
our written intervention demonstrated by revising Merrill Lynch's results in
the way that we have ‑‑ sorry, the way they have ‑‑
CTVglobemedia has reduced the total benefits package. The sensitivity analysis conducted by the
Writers Guild reproduced CTVglobemedia's own analysis, using alternative
parameters provided in the Merrill Lynch study.
This analysis indicated that the allocations chosen by CTVglobemedia
undervalue the total benefits package by an amount between $3 and $4.9 million.
LISTNUM
1 \l 13022 In
summary, using the lower of these two calculations based on Merrill Lynch's
adjusted mean values and including CHUM's debt as previously mentioned, the
Writers Guild believes the appropriate value of the transaction for benefits
purposes is $1.4975 billion.
LISTNUM
1 \l 13023 MS
ASHTON: CTVglobemedia's proposed
acquisition of CHUM Limited will lead to an unprecedented degree of horizontal
integration, vertical integration and cross‑media ownership in Canadian
broadcasting.
LISTNUM
1 \l 13024 The
CTVglobemedia transaction would give CTVglobemedia the ownership of 33 radio
stations, 26 television stations as well as the ASN satellite‑to‑cable
service, a significant interest in 36 specialty television services, production
companies, music publishers, Canada's largest national daily newspaper, the
Globe and Mail, and magazines.
LISTNUM
1 \l 13025 CTVglobemedia
already has significant ownership links to Canada's largest local daily
newspaper, the Toronto Star, book publishing, Harlequin Enterprises and a major
broadcast distribution undertaking, Bell ExpressVu.
LISTNUM
1 \l 13026 What
is more, five of CHUM's conventional stations duplicate CTV's coverage in six
major markets and CTVglobemedia is requesting an exemption to the Commission
policy that prohibits ownership of more than one over‑the‑air
television station in one language in each of these markets.
LISTNUM
1 \l 13027 As
we mentioned, we do not oppose such a massive consolidation in the
marketplace. However, we do want to
ensure that the Canadian broadcasting system benefits appropriately from the
transaction.
LISTNUM
1 \l 13028 There
are at least two occasions on which the Commission has endorsed benefit
packages that exceeded 10 percent. Both
decisions involved transactions in which the applicant had requested an
exception to the Commission's policy on horizontal integration that:
LISTNUM
1 \l 13029 "...generally
permits ownership of no more than one over‑the‑air television
station in one language in a given market". (As read)
LISTNUM
1 \l 13030 We
believe that the Commission should once again require an enhanced benefits
package in exchange for approving an exception to its horizontal integration
policy. Accordingly, the Writers Guild
concurs with other intervenors including the DGC, ACTRA, the CFTPA and CAFDE
that considering the size and importance of the acquisition of CHUM Limited
CTVglobemedia should increase its benefits package from 10 percent to 15
percent of the value of the relevant assets.
LISTNUM
1 \l 13031 In
the WGC's view, all of the television assets in the transaction and the
associated debt that was generated by CHUM essentially through its acquisition
of television assets should be subject to the 15 percent benefit calculation.
LISTNUM
1 \l 13032 Accordingly,
the appropriate value of the benefits package is $163.4 million for the
television assets and $24.6 million for the radio assets for a total of $188 million
intangible benefits.
LISTNUM
1 \l 13033 A
short table is provided as an appendix to this presentation that sets out the
basic calculations used to derive these results. $163.4 million intangible benefits for
television is $86.9 million more than CTVglobemedia is currently
proposing. Considering how difficult it
is to finance Canadian drama, the Writers Guild supports ACTRA's proposal that
these additional benefits be allocated to arms‑length 10 point Canadian
drama.
LISTNUM
1 \l 13034 CTVglobemedia
proposes to acquire five conventional stations that form the Citytv group and
duplicate CTV's conventional television coverage in those markets. We do not oppose such consolidation provided
that the objectives of section 3 of the Broadcasting Act are realized.
LISTNUM
1 \l 13035 In
this case, CTVglobemedia's objective of maintaining separate brands by
retaining two distinctive priority program schedules is fundamental and should
be fulfilled. Yesterday, CTVglobemedia
said that there would be no overlap of programming between CTV and Citytv. We applaud this commitment which is essential
both to ensure the distinct brands of CTV and Citytv and to maintain the
current level of priority programming within the Canadian broadcasting system.
LISTNUM
1 \l 13036 CTVglobemedia
has said that the benefits package will fund incremental programming. However, CTVglobemedia's definition of
incrementality is unclear. Consistent
with previous Commission decisions, the CTVglobemedia benefits package should
be additional to any spending on the existing eight hours of priority program
commitments for both CTV and CHUM stations.
LISTNUM
1 \l 13037 In
the CHUM/Craig transaction the Commission decided that the baseline for
determining incrementality should be the combined priority programming spending
of both CHUM and Craig. This approach
took into account the historical expenditures of both station groups, ensuring
that the additional funding proposed as a benefit to the Canadian broadcasting
system was truly incremental to the expenditures already made by both CHUM and
Craig.
LISTNUM
1 \l 13038 MS
PARKER: In a notice of public hearing
regarding this application the Commission said that it may wish to discuss the
appropriateness of the proposed benefits package and, in particular, whether it
is truly incremental; that is, directed to projects that would not be
undertaken in the absence of this package.
LISTNUM
1 \l 13039 While
we support many aspects of the benefits package and, in particular
CTVglobemedia's commitment to the funding of additional priority programming,
we would like to take this opportunity to tell you a little bit more about two
programs that we believe will significantly increase the quality of Canadian
programming, the Writer Only Drama Development Program and the WGC Diverse
Writers Immersion Program.
LISTNUM
1 \l 13040 Both
Canadian screenwriters and CTV have been happy with how the BCE‑CTV
Writer Only Development Program has been working and both would like to see a
similar program in place for the CHUM stations.
The Writer Only Development Program is seed money that helps
screenwriters nurture their idea to a stage of development that will interest a
producer.
LISTNUM
1 \l 13041 Broadcasters
are the gatekeepers when it comes to getting programs produced as they are the
ones that get to pick which programs they will air. The beauty of the Writer Only Development
Program is that it directly links the people who write TV programs with the
buyers. A producer will be much more
attracted to a project if it comes to the door with a broadcaster already
attached. Development will of course
then continue with the creative and financial involvement of a producer.
LISTNUM
1 \l 13042 The
WGC Diversity Immersion Program is a new program for the Writers Guild that
arose from discussions we have had internally and both with CTV about the need
for more diverse writers in order to be able to authentically produce stories
that reflect Canada's multicultural society.
Canadian society is changing rapidly and our current pool of
professional writers does not fully reflect the composition of Canada as most
Canadians know it.
LISTNUM
1 \l 13043 There
are talented, yet inexperienced writers in diverse cultural communities across
the country, that need training to assist them to write professional quality
scripts. There are no other programs in
Canada that target diverse writers in the way that we propose. We would not be able to conduct this program
without funding from the benefits package.
LISTNUM
1 \l 13044 So
at the end of the day, the WGC encourages CTV to continue to finance great
Canadian programs like Degrassi, Corner Gas, but we want to ensure that CHUM
continues to support its edgier programs like Godiva's and Terminal City. Both CTV and Citytv have distinct brands that
appeal to different audiences.
LISTNUM
1 \l 13045 The
WGC supports the CTVglobemedia application subject to the changes that we have
proposed this afternoon.
LISTNUM
1 \l 13046 Thank
you and we will accept any questions if you have them.
LISTNUM
1 \l 13047 THE
CHAIRPERSON: Thank you very much for a
very clear and concise first submission.
LISTNUM
1 \l 13048 Just
one question; how does the Writer Only Development Program work?
LISTNUM
1 \l 13049 MS
PARKER: Well, currently, the way this
all comes together is that a writer and a writer could also be a producer or a
director, but the person who is actually creating the content, the screenwriter
generally comes up with it generally speaking ‑‑ there are
different examples ‑‑ and they develop concepts, pitches,
ideas and they will take that project and pitch it, in this particular case to
the broadcaster to see if that's something the broadcaster may be interested in
making.
LISTNUM
1 \l 13050 CTV
has very definitive ideas about what they want to see on their network so, if
as a writer I am making a pitch, I should know, I try to know what it is that
they are looking for. Sometimes they say
it is "in the tent" programming.
LISTNUM
1 \l 13051 So
that way we are working directly with the writers, working directly with the
broadcaster to see if that program is something they are interested in. If it's not, that writer will very much know
then not to go that route, not to proceed any further.
LISTNUM
1 \l 13052 And
what happens as well is that CTV if it is interested will finance those very
early stages of development which are usually financed out of the writer's own
pocket. In our system you have to have a
script fairly developed before you start to get development money and, for
example, there isn't a lot of development money allocated at the CTF. Development money is in very short supply in
our system so this puts the money directly in the pockets of the people who are
doing the developing.
LISTNUM
1 \l 13053 THE
CHAIRPERSON: So just to make sure I have
got this straight, the writers only program then, the money from the benefits
that is set aside would be used by CTV to pay a writer to in effect develop a
script where you provided ‑‑ at the time of pitch you only had
a rough idea. Is that the idea?
LISTNUM
1 \l 13054 MS
PARKER: Well, it goes on further than
that and there are a whole list of programs that CTV can provide you with that
have been developed under the writers only program. At a certain stage, perhaps it is the draft
stage of the script, a producer is brought into work on the project and then
the rights, you know, do flow back to the producer. It's not ‑‑ it's sort of a
start‑up program.
LISTNUM
1 \l 13055 THE
CHAIRPERSON: Okay. Thank you.
LISTNUM
1 \l 13056 Stuart,
did you have any comments?
LISTNUM
1 \l 13057 COMMISSIONER
LANGFORD: Just a couple of quick ones.
LISTNUM
1 \l 13058 It
is very clear except in one area. I am
just a tiny bit confused about the bottom of page 7.
LISTNUM
1 \l 13059 Yesterday,
I don't know if you were in the room ‑‑ you are talking here
about your notion of incrementality.
It's getting late in the day.
It's like trying to pronounce phenomenon and I never know where to stop.
LISTNUM
1 \l 13060 "It
should be additional to any spending on the existing eight hours of priority
programming commitments for both CTV and CHUM stations." (As read)
LISTNUM
1 \l 13061 I
believe I heard Mr. Fecan say yesterday that all of this benefits spending on
priority programming would be for the City stations, so that really what they
are spending on CTV shouldn't come into it, should it, because there is no
benefit going to CTV? The benefit is
coming out of the CTV shareholders but it's going all to City.
LISTNUM
1 \l 13062 So
do you have any objection to that? Then
the test would be incremental or additional to what they are doing now for
City.
LISTNUM
1 \l 13063 MS
PARKER: Well, what you are doing here is
you are creating a new entity and so we want to ensure that any spending that
either party would be making, CTV and Citytv or CHUM, is going to be spending
on top of that, that the benefits will be on top of anything they have
historically been spending on priority programming.
LISTNUM
1 \l 13064 COMMISSIONER
LANGFORD: I understand that.
LISTNUM
1 \l 13065 MS
PARKER: This is a whole new ‑‑
yes.
LISTNUM
1 \l 13066 COMMISSIONER
LANGFORD: I understand that but it
doesn't seem fair to me, frankly. I
mean, I am trying to be fair to all parties.
LISTNUM
1 \l 13067 They
are not spending this money on CTV. They
are spending all of it on ‑‑ or sorry, on CTV. They are spending all of it on City and they
have given us an undertaking that there will be no overlap, no duplication of
program. These will be completely
standalone in terms of programming. So
is it fair to lump the big CTV purchase existing expenditures in?
LISTNUM
1 \l 13068 MS
PARKER: Well, at the end of the day you
are going to determine as the Commission ultimately what is fair.
LISTNUM
1 \l 13069 COMMISSIONER
LANGFORD: Oh, absolutely.
LISTNUM
1 \l 13070 MS
PARKER: We are only here to give you
some input and a bit of advice and just as a point of reference, you have
already made a decision along these lines.
So there is a past precedent in the CHUM/Craig purchase where you
did ‑‑
LISTNUM
1 \l 13071 COMMISSIONER
LANGFORD: But they were going ‑‑
they were being put together, weren't they, those two?
LISTNUM
1 \l 13072 MS
PARKER: M'hm.
LISTNUM
1 \l 13073 COMMISSIONER
LANGFORD: This one is not.
LISTNUM
1 \l 13074 MS
PARKER: So you are saying that because
of the overlap and the distinctive branding that you believe it's not ‑‑
LISTNUM
1 \l 13075 COMMISSIONER
LANGFORD: I am not saying I believe
it. I am just wondering whether you can
see that as an argument and something we should consider or whether you are
completely tied to this, no matter what.
LISTNUM
1 \l 13076 MS
PARKER: Oh, I am completely tied to it.
LISTNUM
1 \l 13077 COMMISSIONER
LANGFORD: Are you?
LISTNUM
1 \l 13078 MS
PARKER: No, no, I am actually ‑‑
I am just saying it's all ‑‑ it's all new information. We can just point out what has been done in
the past.
LISTNUM
1 \l 13079 COMMISSIONER
LANGFORD: Okay. Okay, thank you for that.
LISTNUM
1 \l 13080 One
last question; the notion of ‑‑ and I tried this on the
earlier group that was here ‑‑ God, and my mind is starting to
go ‑‑ ACRTA, thanks very much.
Everybody has got an acronym. I
am going to get one.
LISTNUM
1 \l 13081 The
problem, one of the problems with cracking up the benefits package ‑‑
I know the benefits of cracking it up and you spell them out very clearly, but
one of the problems of course is that somehow they have got to be paid for. So if we get to be greedy boots on one side, a
whole lot of secretaries, receptionists, whatever, are going to get fired on
the other side; people who are in the industry.
Maybe they are not writers and maybe their life isn't as exciting but
they probably have mortgages.
LISTNUM
1 \l 13082 And
how ‑‑ do you understand the kind of tension that we are in
under that? I mean, we cannot control
synergies but we know somehow whoever buys this, whether it's CTV or someone
standing in the wings somewhere, they have got to pay for it.
LISTNUM
1 \l 13083 So
if you crack it up it all seems like a great idea, but can you see the
attraction of maybe not squeezing that last dime out because someone is going
to pay for it somewhere in efficiencies?
LISTNUM
1 \l 13084 MS
PARKER: I have a couple of thoughts on
that. One of my first thoughts would be
that Mr. Fecan is a very good businessman and I would expect that he had
expected that we would be trying to up the price of the package. So I would say I negotiate for a living,
that's what I do running a union, that this is in part a negotiation, finding
the right value and the right benefits package.
LISTNUM
1 \l 13085 So
I don't feel that this is undue hardship.
I feel that, you know, there are a lot of benefits. I read this morning in the paper the Chairman
speaking about, you know, that this is unprecedented, two stations in five
markets. So therefore there has to be
some compensation for that very unusual circumstance.
LISTNUM
1 \l 13086 Now,
we are supporting this application but we are saying that you know that it is
different, that the rewards are greater than ever before. This is consolidation to an extent that we
have never seen and, therefore, you will have to pay for that.
LISTNUM
1 \l 13087 COMMISSIONER
LANGFORD: Okay.
LISTNUM
1 \l 13088 MS
PARKER: So no, I don't think it's not
affordable.
LISTNUM
1 \l 13089 COMMISSIONER
LANGFORD: Okay. Thanks very much.
LISTNUM
1 \l 13090 Those
are my questions.
LISTNUM
1 \l 13091 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13092 Madam
Boulet, who is next?
LISTNUM
1 \l 13093 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 13094 I
would now call on the Canadian Recording Industry Association to come forward
to make their presentation.
‑‑‑ Pause
LISTNUM
1 \l 13095 THE
SECRETARY: Mr. Graham Henderson will be
introducing his panel.
LISTNUM
1 \l 13096 After
which you will have 10 minutes for your presentation.
INTERVENTION
LISTNUM
1 \l 13097 MR.
HENDERSON: Thank you, Madam Secretary,
and good afternoon, Mr. Chairman, members of the Commission.
LISTNUM
1 \l 13098 My
name is Graham Henderson. I am president
of the Recording Industry Association.
LISTNUM
1 \l 13099 I
am joined by Duncan McKie. He is chair
of Pollara Research and Stephen Zolf, partner in Heenan Blaikie and our
regulatory counsel.
LISTNUM
1 \l 13100 CRIA
is pleased to appear before the Commission today to address CTV's application
and, as the Commission is aware, we have indicated our support for the
application subject only to what I am about to say.
LISTNUM
1 \l 13101 CRIA
also recognizes that CHUM Radio over many decades has been one of the leaders
in Canada in supporting musical artists and we are happy to see that CTV will
also continue to support music in Canada through the CHUM radio system.
LISTNUM
1 \l 13102 The
purpose of our remarks today is to address those points in our written comments
that relate specifically to the issue of airplay and promotion for new and
emerging artists and the process by which we can achieve our shared goals of
ensuring that they have shelf space.
LISTNUM
1 \l 13103 Thanks
to a collaborative consultation process in which we engaged with CTV, there are
now many points of agreement between the two of us on this issue.
LISTNUM
1 \l 13104 For
example, we both acknowledge the importance of airplay for new and emerging
Canadian artists. For my members new and emerging artists are the
lifeblood of our industry.
LISTNUM
1 \l 13105 We
both recognize that the Commission's concerns with respect to administrative
and regulatory burdens inherent in establishing incentives for quotas for new
and emerging artists play on radio that are both fair and can be administered
and monitored, and we both acknowledge how hard it is to establish benchmarks
for new and emerging Canadian artists given that airplay of these artists is not
necessarily appropriate to the same degree in all formats.
LISTNUM
1 \l 13106 What
we both recognize is that we need a tailored system whereby radio stations air
specified levels of new and emerging content.
We have rules for Canadian content which have worked. There is no reason why we cannot have rules
for new and emerging content.
LISTNUM
1 \l 13107 However,
we do consider that it is crucial that Canadians have an opportunity to hear
these artists at peak times and in major markets. However, as I have said before, any such
system must be geared to individual formats.
LISTNUM
1 \l 13108 We
wish, therefore, to reiterate our request for an all industry consultation to
establish benchmarks for this objective.
We initially proposed this working group approach before the Commission
at the radio review hearing last spring.
CTV embraced this proposal in its written reply in this proceeding and
we were pleased to hear them confirm their support for the approach in response
to questions from the Commission yesterday.
LISTNUM
1 \l 13109 The
Commission may properly ask why CTV and CRIA feel this process is
necessary. It's necessary because it
became evident during our consultations that there is a legitimate disagreement
over a variety of issues, not the least of which is getting a handle on what is
exactly happening in the marketplace right now.
To offer a sporting metaphor, the teams are being asked to take the
field unsure of whether it's first in goal or they are in the shadow of their
own goal posts. We don't know whether to
punt, pass or kick and we need to find out.
LISTNUM
1 \l 13110 The
result of our discussions was outlined in part by Mr. Ski yesterday and we hope
to build on what he said and will commend our proposal to the Commission to
adopt and deploy.
LISTNUM
1 \l 13111 What
we proposed to CTV was a working group like that set out in public notice 2000‑65. This notice created a consensus‑based
problem‑solving model described as follows by the Commission:
LISTNUM
1 \l 13112 "Staff
facilitated meetings involving participation in a working group by a broad
cross‑section of industry representatives and other interested parties
having a demonstrable, direct interest in the outcome." (As read)
LISTNUM
1 \l 13113 Now,
the key here, I would add, are the words, magic words "demonstrable"
and "direct". We do not want
this to become a Tower of Babel‑like process.
LISTNUM
1 \l 13114 The
working group provides an ideal procedure for investigating an issue,
determining the facts and proposing a solution on a consensus basis that would
be brought before the Commission for approval.
Commission and staff would be available to help break an impasse.
LISTNUM
1 \l 13115 The
working group process would ‑‑ I have got about four things
that it could do.
LISTNUM
1 \l 13116 First
of all, produce through consensus workable and meaningful commitments by
commercial radio licensees with respect to new and emerging Canadian artists
including maximizing exposure in prime time periods to achieve critical mass of
airplay.
LISTNUM
1 \l 13117 Two,
recognize that individual radio stations must be accorded some flexibility in
applying commitments to new and emerging artists. The model must recognize differing radio
formats and any potential limitations within the supply chain.
LISTNUM
1 \l 13118 Three,
it must establish a criteria to manage, fund and monitor a transparent and
measurable national database of airplay of new and emerging artists. We can do this now. We talked about this last spring. It becomes ever more easy as time marches
on. This database will permit the
industry to report its progress to the Commission and, indeed, to the Canadian
public across the entire radio spectrum.
LISTNUM
1 \l 13119 Fourth,
the working group process would develop appropriate procedures to resolve
disputes within a framework of consensus‑based problem solving.
LISTNUM
1 \l 13120 We
submit this is ideally suited to establishing workable and meaningful
commitments for radio play of new and emerging artists. We have to get this right.
LISTNUM
1 \l 13121 Now,
yesterday we heard from Commissioner Langford that he had assigned some
homework to our friends at the CTV and while we share the Commission's desire
to get numbers onto the record, we would suggest at this time that perhaps it's
premature with all due respect. We might
well all be assigned such homework. We
might well all come with different numbers and we might be no further ahead
than we are today.
LISTNUM
1 \l 13122 We
are committed to this. CTV is committed
to this, and we believe that a consensus‑based model is ideal because it
contemplates an environment in which all of the stakeholders are brought
together at the outset. The Commission
would be engaged in finding a resolution of issues that are industry wide in
scope and a procedure would be extremely useful in achieving this consensus.
LISTNUM
1 \l 13123 In
summary, we submit that a Commission‑initiated working group process
would provide a way forward on this important issue. This process should be applied uniformly,
moreover. As more applicants come before
you, as they surely will in the context of prospective applications for change
of control as well as licence renewals, it would be appropriate for the
Commission to widen the net and encompass these applicants under the working
group process. It would be a positive
move forward from where the Commission left things in last year's radio Review
policy which addressed commitments on a more granular, case‑by‑case
basis. If you will, it's almost a
compromise between the original ideas presented and what the Commission came up
with.
LISTNUM
1 \l 13124 Ideally,
the working group's inclusive process would find workable solutions that govern
all the particular circumstances of each type of commercial radio station and
for every given musical genre. Then, the
broadcasters will be accorded the necessary flexibility to tailor their
commitments with respect to emerging Canadian artists that is suitable for them
and acceptable to ourselves and to the Canadian public.
LISTNUM
1 \l 13125 Ultimately,
these could be adopted by conditions of licence, following the ultimate
resolution of the working group process or by amendments to the radio
regulations.
LISTNUM
1 \l 13126 We
appreciate this opportunity to appear before the Commission, welcome your
questions and thank you for your time.
LISTNUM
1 \l 13127 THE
CHAIRPERSON: Thank you very much. That's very interesting. I must say it takes me back to when we last
met and I ruled against you on procedural grounds. I denied your application and became, I
think, your least favourite judge at that point in time.
‑‑‑ Laughter /
Rires
LISTNUM
1 \l 13128 THE
CHAIRPERSON: Is there any reason why I
shouldn't do that here? I mean, what you
have just done is very fascinating, but it has absolutely nothing to do with
this transaction, other than your first sentence saying that you support this
transaction.
LISTNUM
1 \l 13129 I'm
not taking away anything from the merit of what you said and the proposal, but
how does it fit into what is before us, namely the application by CTV to
acquire CHUM?
LISTNUM
1 \l 13130 MR.
ZOLF: I will answer that,
Mr. Chairman.
LISTNUM
1 \l 13131 I
think it is relevant because, as we already said, the Commission has
articulated in the recent Radio Policy in December of 2006 that it will address
the issue of commitments to new and emerging artists as including transactions
for change of effective control, and here we are today for that.
LISTNUM
1 \l 13132 What
we wanted to articulate was, we think that rather than that granular approach
the Commission does need to ‑‑ that it now is the appropriate
time ‑‑ or the next application is the appropriate time, this
is the first one that is really before you ‑‑ to adopt that
approach.
LISTNUM
1 \l 13133 THE
CHAIRPERSON: Accepting that, let's take
granular, what is before me is CTV‑CHUM.
LISTNUM
1 \l 13134 What
do I do here?
LISTNUM
1 \l 13135 MR.
HENDERSON: Well, I might add that I
think you have an unusual situation where the stakeholders are saying
"Give us a chance to try to work this out together in a mediated matter
and we will come up with something that ‑‑ my sense all along
in these proceedings has been that the Commission is anxious to ensure that new
and emerging artists get their fair share of shelf space. We are too, so is CTV. So we need to establish the state of play and
then we can start moving the chains.
LISTNUM
1 \l 13136 THE
CHAIRPERSON: I am pragmatic. I am going to deal with what is before me,
CTV‑CHUM.
LISTNUM
1 \l 13137 So
basically you say approve this transaction, as far as CRIA is concerned work
out this whole thing that was started with the Radio Review Policy, come to a
solution and, in effect, ask CTV now to agree beforehand to buy into that
solution once it has been reached on a consensus basis?
LISTNUM
1 \l 13138 MR.
HENDERSON: Yes, that's right.
LISTNUM
1 \l 13139 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13140 Rita...?
LISTNUM
1 \l 13141 COMMISSIONER
CUGINI: Thank you,
Mr. Chairman. Just a couple of
questions.
LISTNUM
1 \l 13142 Mr.
Henderson, do you see the commitment that Mr. Ski described yesterday and
announced on Friday, its commitment to new and emerging artists by the CHUM
stations.
LISTNUM
1 \l 13143 MR.
ZOLF: You mean the Calgary proposal?
LISTNUM
1 \l 13144 MR.
HENDERSON: Commissioner Cugini, I take
it you are referring to the commitment that Mr. Ski made yesterday about
the issue.
LISTNUM
1 \l 13145 COMMISSIONER
CUGINI: That's right. Yes.
LISTNUM
1 \l 13146 Were
you here yesterday? Did you hear
Mr. Ski's ‑‑
LISTNUM
1 \l 13147 MR.
HENDERSON: I'm afraid I wasn't, no.
LISTNUM
1 \l 13148 COMMISSIONER
CUGINI: I don't have the details with
me. I thought I had brought the
press release.
LISTNUM
1 \l 13149 But
they are committing to a project across the CHUM stations ‑‑
LISTNUM
1 \l 13150 MR.
HENDERSON: Yes.
LISTNUM
1 \l 13151 COMMISSIONER
CUGINI: ‑‑ for the airplay and promotion of new and emerging
artists.
LISTNUM
1 \l 13152 MR.
HENDERSON: Yes. I am familiar with it, yes.
LISTNUM
1 \l 13153 COMMISSIONER
CUGINI: Do you see that as the start of
a terms of reference for this consultation group?
LISTNUM
1 \l 13154 MR.
HENDERSON: Listen, I think it would be
obviously that is an integral part. In a
sense, they are coming to the table with that.
But I also think they are coming to the table with something more, which
is: Here is a start, here is what we
want to do, but we both recognize that there is more that we may need to do.
LISTNUM
1 \l 13155 This
goes back to not knowing where we are.
There is a fog out there. This
came legitimately to our attention in our discussions after we both made our
filings, starting to sit down and say "Well, what is a new and emerging
artist? Is this one? Is that one?
Should this one? Should that one
not be?" And you come up a slightly
different numbers.
LISTNUM
1 \l 13156 So
I think that is the beginning of the discussion. We found them to be remarkably open in their
desire to get down to it, and I believe that both parties and the other
stakeholders who have this demonstrable direct interest in this, will come
together and, in a mediated environment, come up with answers that will be an
enormous value to the Canadian public.
LISTNUM
1 \l 13157 COMMISSIONER
CUGINI: Have you started to have these
conversations with other major radio broadcasters in the country?
LISTNUM
1 \l 13158 MR.
HENDERSON: No. Our starting point was in the last few weeks
with CTV.
LISTNUM
1 \l 13159 COMMISSIONER
CUGINI: Is that why you believe that you
need the Commission's intervention to get the stakeholder consultations going?
LISTNUM
1 \l 13160 MR.
HENDERSON: Yes.
LISTNUM
1 \l 13161 MR.
ZOLF: If I could just add to that,
absolutely, Commissioner Cugini.
LISTNUM
1 \l 13162 We
think the Commission should be predisposed to ‑‑ I mean
ideally in its ultimate ruling when it addresses radio issues, and this issue
in particular, to request the industry to go ahead and do that and to participate
in the process, not unlike, for example, what it has done on television, for
example the Digital Migration Working Group where the Commission actually
ordered those parties to try to achieve a consensus.
LISTNUM
1 \l 13163 Now,
sometimes a consensus wasn't achieved and it went a different direction with an
MOU, but the point is the Commission did see fit to request that process.
LISTNUM
1 \l 13164 MR.
HENDERSON: I think when the decision
came out in Radio Review, we regarded it as a very progressive solution to
the problem, I mean, to deal with this on a station‑by‑station
basis. It made sense for all of the
reasons that we are really sort of saying it make sense today, different
formats, different genres, different situations, different markets.
LISTNUM
1 \l 13165 But
we do have a very unusual opportunity here in the case of this transfer to take
a group of stations, with willing broadcasters, willing stakeholders, to sit
down and come up with something, which ultimately will, in effect, kind of roll
through the whole system and do something.
LISTNUM
1 \l 13166 I
honestly believe there is a historic opportunity here. Now, we can't let that lapse into sort of a
piecemeal sort of case‑by‑case approach or we can establish an
important benchmark off the top that will ripple through the entire
broadcasting network and have a pronounced effect on new and emerging artists.
LISTNUM
1 \l 13167 COMMISSIONER
CUGINI: Thank you.
LISTNUM
1 \l 13168 Thank
you very much, Mr. Chairman. Those are
my questions.
LISTNUM
1 \l 13169 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13170 Anybody
else?
LISTNUM
1 \l 13171 Thank
you very much.
LISTNUM
1 \l 13172 MR.
HENDERSON: Thank you.
LISTNUM
1 \l 13173 Madam
Boulet, who is next?
LISTNUM
1 \l 13174 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 13175 I
would now call on the Canadian Independent Record Production Association
to come forward.
‑‑‑ Pause
LISTNUM
1 \l 13176 THE
SECRETARY: Please go ahead,
Mr. Mair, when you are ready. You
have 10 minutes for your presentation.
INTERVENTION
LISTNUM
1 \l 13177 MR.
MAIR: Thank you.
LISTNUM
1 \l 13178 Good
day, Mr. Chairman. My name is
Alexander Mair, I am the Chair of the CIRPA Government Relations Committee and
the publisher of "Applaud", which you all receive.
LISTNUM
1 \l 13179 CIRPA
appreciates the opportunity to appear at this hearing, the first major hearing
to take place under the new Chair.
LISTNUM
1 \l 13180 Given
the short time available to us, I would like to quickly highlight the points we
have made in our written presentation and, in particular, the following issues:
LISTNUM
1 \l 13181 One,
our request regarding allocation of funding from the television part of the
transaction;
LISTNUM
1 \l 13182 two,
our requests regarding funding from the 1 percent discretionary funding; and
LISTNUM
1 \l 13183 three,
programming issues and emerging artists.
LISTNUM
1 \l 13184 As
the Commission is aware, the worlds of both broadcasting and music are
undergoing substantive and indeed, in the case of music, seismic changes from
the previously established norms.
LISTNUM
1 \l 13185 In
light of this, CIRPA feels that while the points we make in this hearing are
very important, equally important is an ongoing understanding and continuing
review by the Commission of the impact of technological regulatory and policy
oriented changes that are occurring across the whole field, not just for the
regulated sector but for many of the content providers as well on an ongoing
basis.
LISTNUM
1 \l 13186 These
changes are a day‑to‑day reality music industry and certainly will
not stop tomorrow. They can be expected
to keep occurring, at least until the end of the decade if not longer, as the
industry at just to a new world and new environment that is a result of
technological and business changes.
LISTNUM
1 \l 13187 Even
since the filing of this sale with the Commission almost a year ago, there have
been key music business changes. We
would ask that the Commission consider our intervention with this reality in
mind as it explains the reasoning behind our approach and the requests we are
making.
LISTNUM
1 \l 13188 We
now turn to our written intervention.
LISTNUM
1 \l 13189 In
paragraph 4, regarding money from the television transactions benefit, we feel
that our written requests are clear but for the sake of clarity suggest that
these funds be controlled by music industry organizations. They are designed to help the independent
sector access new opportunities and better achieve success both in Canada and
abroad.
LISTNUM
1 \l 13190 Each
of the three suggestions we make will be of considerable assistance in achieving
this objective. In our review, each
proposal will have positive and concrete results for the independent sector and
the artist it represents should the Commission agree with our thoughts and
introduce these benefits in its decision.
LISTNUM
1 \l 13191 To
turn to our second suggestion as outlined in points 5 and 6 of our
intervention, CIRPA feels that a portion of the 1 percent discretionary monies
would be more beneficially spent to help the independent sector by the
Commission considering replacing part of the suggested proposals with the
following approaches.
LISTNUM
1 \l 13192 One,
education and business development and research/knowledge for the sector. Today's rapidly changing music business
continues to be radically affected by advances in technology that are
restructuring both the music business itself as well as the administrative
business needs of CIRPA members.
LISTNUM
1 \l 13193 It
will be vitally important that independents are provided with adequate
professional knowledge and upgrading of skills through seminars
and courses both in person on online on a regular and continuing basis in
order that they are able to compete effectively in tomorrow's highly
competitive environment.
LISTNUM
1 \l 13194 They
also need to obtain regular and detailed information and resource
bulletins of high quality usefulness so as to adapt to the continually changing
business circumstances and opportunities that technological advances will
continue to bring for the foreseeable future.
These services are currently provided by CIRPA to members in a very
limited fashion, but with the provision of realistic levels of funding a much
enhanced service can be provided on an ongoing basis that will greatly assist
the independent sector in the future.
LISTNUM
1 \l 13195 Two,
support for international trade shows and international festivals.
LISTNUM
1 \l 13196 International
trade shows such as Midam, POPCOM and South by Southwest are vitally important
tools in the branding of Canadian music and companies in the international
marketplace. In today's very tough
business conditions and highly competitive marketplace, a company just cannot
survive on the Canadian market alone.
Export success is critical and events such as these play a major role in
the international marketing plans of all Canadian companies and artists.
LISTNUM
1 \l 13197 While
Canada was a pioneer and leader in establishing national stands and coordinated
marketing campaigns, this was duly noted and acted upon by many other countries
which has resulted in fierce competition for visibility and success. In order to raise our game and continue to be
successful, and to be regarded as a major player, more stable long‑term
funding is sorely needed. Were such
funding to be provided, the benefits to Canadian artists and companies would be
substantial and immediate and their efforts to sustain and indeed increase
their success internationally over the next few years as the business
transforms and evolves.
LISTNUM
1 \l 13198 The
third issue that CIRPA would like to address is that of emerging artists, as
noted in paragraph 8 of our intervention.
We feel that our concerns are clearly expressed in the intervention, but
there are two specific points that we wish to bring to the Commission's attention
in this regard.
LISTNUM
1 \l 13199 The
first is the definition of what, in our view, constitutes an emerging artist.
LISTNUM
1 \l 13200 The
second is a guarantee of airplay for independent artists or artists signed to
Canadian‑owned and controlled companies.
LISTNUM
1 \l 13201 As
the Commission will note, CIRPA suggests that:
LISTNUM
1 \l 13202 One,
an emerging artist is one who has released no more than five CDs, has not hit
platinum in Canada and gold in the U.S. or the U.K. We propose that 50 percent of the
applicable Cancon level be emerging artists.
LISTNUM
1 \l 13203 CIRPA
requests that 50 percent of all Cancon be Indie artists or artist signed
to Canadian‑owned and controlled companies.
LISTNUM
1 \l 13204 CIRPA
does not support any bonus system for emerging artists that would reduce
Cancon levels.
LISTNUM
1 \l 13205 Over
the weekend CTV agreed to support CIRPA's proposal for the creation of working
committee to define emerging artists.
Mr. Henderson has already discussed that we are in full agreement
and support.
LISTNUM
1 \l 13206 We
note CTV's comment regarding the lack of a database. In this regard, CIRPA would like to draw the
Commission's attention to the existence of the Canadian music industry database
which operates in conjunction with CIRPA from its offices. It already has in place a considerable amount
of the data necessary, and with appropriate funding levels would be fully
capable of adding to its data and information base to enable it to provide all
necessary services to the various stakeholders.
LISTNUM
1 \l 13207 In
addition, CIRPA would like to point out that current programming trends and
tight playlists on radio are, in our view, damaging the careers of numerous
talented young Canadians.
LISTNUM
1 \l 13208 It
is interesting that Jully Black is the only artist speaking when we are talking
about culture, not just business.
LISTNUM
1 \l 13209 Broadcasters
are ignoring the fact that the airways are public property that is licensed to
them by the Commission on behalf of all Canadians. As such, CIRPA feels that the substantial and
ongoing benefit clearly comes with the requirement to expose and promote new
and emerging Canadian artists as part of broadcasters' responsibilities under
the Act.
LISTNUM
1 \l 13210 In
this regard, we would draw the Commission's attention to the recent FCC
decision in the United States requiring airplay for independents and the
question that raises. CIRPA notes in
this regard that independents in both the U.K. and Europe have made the same
request to regulators and governments and have made strong representations in
this regard.
LISTNUM
1 \l 13211 One
final point that CIRPA would like to make is to voice its concern on one aspect
of the VideoFACT, BravoFACT funding.
LISTNUM
1 \l 13212 It
is our understanding that if VideoFACT or BravoFACT funds any part of a video,
by contract the record company is precluded from collecting payment through
AVLA and Much acquires certain unfettered rights that we feel belong to the
record company or the artist involved.
LISTNUM
1 \l 13213 CIRPA
feels that it is unfair and unjust and that Much should be precluded by
condition of licence from having such provisions.
LISTNUM
1 \l 13214 These
are our key concerns with the application.
LISTNUM
1 \l 13215 In
closing, yesterday I received the American trade paper Billboard and I
read it on the plane this morning. The
number one single in the United States is by a group from Hamilton, Ontario
called Junior Boys, an independent act debuted at number one.
LISTNUM
1 \l 13216 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13217 At
page 4 of your submission you talk about the Canadian music industry database.
LISTNUM
1 \l 13218 MR.
MAIR: Yes.
LISTNUM
1 \l 13219 THE
CHAIRPERSON: You say with appropriate
funding level it would be fully capable.
LISTNUM
1 \l 13220 What
does "appropriate" mean and where would it come from?
LISTNUM
1 \l 13221 MR.
MAIR: What it would need would depend on
the outcome of the discussions between CTV and the music industry
stakeholders. What information was
required, I cannot but I figure on the table, but we would be looking towards
CTV as part of the merger obligations, or the acquisition obligations.
LISTNUM
1 \l 13222 THE
CHAIRPERSON: So CTV pays it as part
of merger obligation, but the whole industry benefits?
LISTNUM
1 \l 13223 MR.
MAIR: Someone would have to pay for
it. It is of prime importance to
broadcasters to have a definition of "emerging artist", it is of
importance to you to know that the conditions are being met.
LISTNUM
1 \l 13224 THE
CHAIRPERSON: I understand that, I just
asked for the funding and you suggest this merger should fund it.
LISTNUM
1 \l 13225 MR.
MAIR: Yes.
LISTNUM
1 \l 13226 THE
CHAIRPERSON: All right. Thank you.
LISTNUM
1 \l 13227 MR.
MAIR: Out of the 1 percent
discretionary.
LISTNUM
1 \l 13228 COMMISSIONER
CUGINI: Just one additional question,
Mr. Mair, and it relates to the 1 percent of discretionary spending
of the radio benefits.
LISTNUM
1 \l 13229 Did
you have an opportunity to speak with or make your proposal to CTV prior to
their filing of their application?
LISTNUM
1 \l 13230 MR.
MAIR: No, we didn't. I contacted someone and through a series of
unavoidable things we did not connect prior to the submission.
LISTNUM
1 \l 13231 COMMISSIONER
CUGINI: And you did not send them a
letter to outline your proposal?
LISTNUM
1 \l 13232 MR.
MAIR: No. No, we preferred to sit down face‑to‑face
initially.
LISTNUM
1 \l 13233 COMMISSIONER
CUGINI: All right. Thank you very much.
LISTNUM
1 \l 13234 Thank
you, Mr. Chair.
LISTNUM
1 \l 13235 THE
CHAIRPERSON: All right. Thank you very much.
LISTNUM
1 \l 13236 Madam
Boulet...?
LISTNUM
1 \l 13237 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 13238 We
will now invite the Seneca College School of Communication Arts to come
forward.
‑‑‑ Pause
LISTNUM
1 \l 13239 THE
SECRETARY: Mr. Jim Craig is representing
the intervenor.
LISTNUM
1 \l 13240 If
you can introduce your colleague and you will have 10 minutes for your
presentation.
INTERVENTION
LISTNUM
1 \l 13241 MR.
CRAIG: Thank you very much.
LISTNUM
1 \l 13242 Mr.
Chairman, Commissioners, Commission staff and attending representatives, of
CTVglobemedia and CHUM Limited, thank you for allowing us this opportunity to
make comment regarding the application by CTVglobemedia Inc. to purchase CHUM
Limited.
LISTNUM
1 \l 13243 My
name is Jim Craig. I am a proud full‑time
faculty member of the Broadcast Division of the School of Communication Arts at
Seneca College in Toronto. I am also a
broadcast consultant and radio programmer.
LISTNUM
1 \l 13244 With
me as the Chair of our School of Communication Arts Jed DeCory. Prior to joining Seneca in 1999, just in time
for the opening of our York University Campus, Mr. DeCory was Director of the
Banff Centre for the Arts Media and Visual Arts Division and the Founding
Director of the Banff Centre Media Production And Training Department.
LISTNUM
1 \l 13245 We
are not here to oppose this transaction.
If anything, given CTVglobemedia's long‑standing demonstrated
history of broadcast excellence, we are generally positive to their
application, although, as broadcasters and broadcast educators, we do have
concern with any initiative that could precipitate further broadcast employment
downsizing in the name of corporate efficiencies that could have an adverse
effect on career potentials for our graduates.
LISTNUM
1 \l 13246 Rather,
we are here to comment on the tangible benefits package tied to this
application.
LISTNUM
1 \l 13247 I
would like to begin with a quick 38‑second overview of Seneca College and
our School of Communication Arts. With
about 18,000 fulltime day students on eight campuses in North Toronto and an
overall enrolment of over 100,000 students, we are Canada's largest college
operating as a community college.
LISTNUM
1 \l 13248 The
School of Communication Arts has 3,790 students with about 1,500 directly
connected to broadcast related programs.
Seneca also partners with York University in joint degree granting
programs and we are recognized by the industry as one of Canada's leading
broadcast educational institutions.
LISTNUM
1 \l 13249 First,
the current realities of broadcast education must be understood and Jed DeCory
is well versed in the facts of fiscal life at Seneca.
LISTNUM
1 \l 13250 MR.
DeCORY: Thank you. Gone are the days when someone could leave
school and begin a career in radio or television by walking into a local
station and training from scratch on the job with little or no formal education
in the skills and technologies of the broadcast business.
LISTNUM
1 \l 13251 One
of my former instructors got his break simply because he delivered a daily
paper to Jack Kent Cooke. With today's
ever changing technological advances, broadcasters are demanding that even
entry level candidates be fully trained on professional equipment and computer
software that is compatible with their gear.
LISTNUM
1 \l 13252 Therefore,
our educational facilities must be, at a minimum, up to date to satisfy the
industry employers if they are going to hire our graduates. To do so, we need to be state of the art and
that requires money.
LISTNUM
1 \l 13253 Since
2003 the Seneca School of Communication Arts has spent almost $4.6 million on
equipment, broadcast facilities, hardware, software and other materials used in
television, radio and broadcast journalism programs. $1.3 million was spent last fiscal year and
this year we are planning on another $1.2 million. All of this to make our broadcast related
programs viable, professional and acceptable to the demands of broadcast
employers. And we are doing it at a time
when Seneca is projecting an overall operating deficit of between $3 million
and $4 million.
LISTNUM
1 \l 13254 This
money is all capital expenditure for broadcast equipment, hardware and
software, just to keep up with the change.
None of it is allocated to faculty, support staff or general costs.
LISTNUM
1 \l 13255 Refer
at your leisure to the following page and you will see the scope of purchases
we have made to support broadcast programs vis‑à‑vis our relevance
to industry standards.
LISTNUM
1 \l 13256 In
these days industry demands graduates who are job ready, and our graduates
are. They are competent, not only in how
to use a video camera, a digital recorder, digital editing suite or solid state
production board, they are familiar with all aspects of the broadcast process,
including emerging new media forms, such as streaming, webcasting and
information management of station websites.
LISTNUM
1 \l 13257 To
produce the level of graduates required by industry, we must constantly keep up
with this ever‑advancing technology curve. If we still taught editing the way I learned
it, with 16 mm film and a Steinbach, the industry wouldn't even be interested
in interviewing our graduates.
LISTNUM
1 \l 13258 In
fact, that would be the case if we were still using the 20‑year‑old
technology that we have strategically replaced since 2000.
LISTNUM
1 \l 13259 MR.
CRAIG: As I said before, we are not here
today to oppose the sale of CHUM Limited to CTVglobemedia. However, given the enormity of the deal with
its huge $103 million tangible benefits package, along with the pending
associated Rogers A Channel acquisition, we feel compelled to make our feelings
known regrading the allocations in such packages.
LISTNUM
1 \l 13260 First
of all, we take issue with a plan that would simply transfer funds into
Canadian programming development activities that the buyer is already obligated
to do per CRTC regs, policy and guidelines.
As we all know, the Canadian television undertakings are required to
provide a set percentage of Canadian content.
LISTNUM
1 \l 13261 So
is there anything new over and above existing obligations being proposed in
this self‑administered plan?
LISTNUM
1 \l 13262 Second,
we note that allocations in the radio portion of the plan include money for
Corus and CHUM Radio. The Corus
allotment is to support events such as the Juno Awards, which are primarily
television broadcast events that help achieve TV CanCon obligations. And the proposed CHUM Music Fest, although
designed to showcase Canadian talent at Canada Music Week, appears to be more
of a self‑serving CHUM Radio promotional vehicle and we question whether
that lives up to the spirit of Commission expectations.
LISTNUM
1 \l 13263 Mr.
Chairman and Commissioners, perhaps we can offer a better idea for tangible
benefits and, as Stu Langford has said, do something different with it.
LISTNUM
1 \l 13264 A
precedent for capital investment in education as part of a tangible benefits
package has already been set. Decision
CRTC 99‑482 awarded CHUM Limited a new FM radio broadcast licence for
London, Ontario in 1999 which included a $1.2 million commitment made to the
Fanshaw College Music Industry Arts Program for three new recording studios,
labs and equipment upgrades.
LISTNUM
1 \l 13265 This
was a CRTC‑approved capital investment in broadcast education. And if there is any difficulty in recognizing
or defining capital investment in broadcast education as either Canadian Talent
Development initiatives or Canadian programming development opportunities, we
direct you to the DVD that we have provided.
LISTNUM
1 \l 13266 It
contains the 2004 Academy Award winning Best Animated Short "Ryan",
which was created by a team of Seneca College students and grads utilizing the
facilities of our Seneca at York School of Communication Arts campus.
LISTNUM
1 \l 13267 Jed
DeCory was the Executive Producer. The
people involved are Canadian talent, and the finished product was aired on Canadian
television as Canadian content programming.
LISTNUM
1 \l 13268 MR.
DeCORY: To sum up, Seneca College, along
with other Canadian institutions preparing students for jobs in the
broadcasting industry, depends largely on provincial operating grants to fund
broadcasting programs. Government
underfunding and post secondary education over the past decade and rising costs
and demands of maintaining leading edge training facilities means new sources
of added funding are necessary if we are going to maintain the professional
quality of our programs to satisfy broadcast employers.
LISTNUM
1 \l 13269 But
there has been very little direct investment by broadcasters and school
training in schools that are training the vast majority of their future
employees for them. In essence, they are
getting a free ride.
LISTNUM
1 \l 13270 Our
message is simple. Consideration must be
given to a capital investment in broadcast education if the industry is going
to continue to enjoy the luxury of not having to train or apprentice new
employees on the job.
LISTNUM
1 \l 13271 MR.
CRAIG: We believe Canadian programming
and Canadian Talent Development contributions inherent to all new broadcasting
licensing and broadcast property acquisitions present a significant opportunity
for educational capital funding, which in turn would alleviate cost pressures
faced by post secondary training institutions like Seneca College and serve the
need of broadcasters. That's a win‑win
scenario.
LISTNUM
1 \l 13272 The
sale of CHUM Media to CTVglobemedia could have provided an excellent starting
point, and perhaps it still can.
However, we are flagging this message for consideration by Rogers Media
as it prepares for its A Channel transactions, also for Astral Media as it
creates the tangible benefits proposal for its application to acquire Standard
and for other broadcasters with future deals that are lurking in the wings.
LISTNUM
1 \l 13273 Bottom
line, here's a solution. At Seneca, we
are intending to establish a growing endowment fund that could eventually cover
our annual broadcast education capital expenditure needs. We are inviting the corporate broadcasting
community to use this vessel to invest in broadcast education as a start toward
ensuring a sufficient flow of the pretrained employees they demand for their
future needs.
LISTNUM
1 \l 13274 We
hope the Commission understands the capital investment needs of broadcast
educators across Canada if we are to continue playing our vital part in feeding
the system with exceptional highly trained graduate Canadian talent who can
walk into a broadcast facility, sit down and do the job.
LISTNUM
1 \l 13275 Mr.
Chairman and Commissioners, we leave you with one last point to ponder. Wouldn't it make sense for the CRTC to
entrench capital investment in broadcast education as a readily acceptable
option for tangible benefits packages alongside CTD and Cancon
programming? That would be your easy
investment in a bright future for Canadian broadcasting.
LISTNUM
1 \l 13276 We
thank you for your time and indulgence and we would be certainly pleased to
hear any of your comments and answer any questions that you might have.
LISTNUM
1 \l 13277 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13278 I'm
somewhat surprised that you say you support the merger and at the same time you
are afraid that the corporate efficiencies will have an adverse effect on
career potential of your graduates. I
have never seen a corporate merger that has not produced corporate
efficiencies. That is one of the reasons
you have a merger.
LISTNUM
1 \l 13279 So
aren't you supporting something that is not in your interest?
LISTNUM
1 \l 13280 MR.
CRAIG: We understand the realities. That is the reality of the business. As broadcast educators, we also try to
educate our students in an understanding of what the business is all
about. And we fully understand
that. There will be some efficiencies.
LISTNUM
1 \l 13281 There
is obviously concern that those cost efficiencies might affect the hiring
probabilities of a few of our students, but that's life. That's life in the broadcast zone.
LISTNUM
1 \l 13282 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13283 My
fellow Commissioners don't seem to have any questions.
LISTNUM
1 \l 13284 Mr.
Langford?
LISTNUM
1 \l 13285 COMMISSIONER
LANGFORD: Just in a general sense. I mean, everybody is for education and
against war and poverty and whatnot, and I don't want to make light of what you
are saying. But aren't we the kind of
wrong forum for this?
LISTNUM
1 \l 13286 I
know you have that one radio decision from 1999, but we generally don't do
bricks and mortar. Isn't that something
that fund raisers at a college like yours get around? Ryerson has a building named after Rogers and
I assume they made some kind of deal.
And we see business schools named after people. They recognize donations and there's
charitable consequences and taxation consequences.
LISTNUM
1 \l 13287 Aren't
those sorts of things usually done in a different forum than this?
LISTNUM
1 \l 13288 MR.
DeCORY: I think at this point we are
doing them in every way we possibly can.
One of the issues when we go to a broadcaster with a pending licence
renewal or a purchase, they quote the parameters.
LISTNUM
1 \l 13289 Unfortunately,
my 20 students in my independent music production may qualify under the current
CRTC rules. However, my broadcast
television students and my broadcast radio students, the heart-blood of what
makes these networks run, don't qualify under the current parameters.
LISTNUM
1 \l 13290 What
we are asking is for you to look at perhaps making those parameters a little
more wide open so that we can go to our broadcast partners, and we will provide
them the place to put it if you provide them with the ability to put it and
include it under a tangible benefits package.
LISTNUM
1 \l 13291 MR.
CRAIG: And we are not looking for bricks
and mortar money. We are looking for the
dollars that will help pay for those parts of the facility that the
broadcasters are quite frankly demanding we have in place for our students to
be able to be trained so that they can then suck them into the system.
LISTNUM
1 \l 13292 COMMISSIONER
LANGFORD: And you realize without
further process, this couldn't come out of this decision. You understand that.
LISTNUM
1 \l 13293 MR.
CRAIG: We fully understand that, unless,
of course, as has been suggested, there might be some more money added to the
pot ‑‑ which we know won't happen.
LISTNUM
1 \l 13294 COMMISSIONER
LANGFORD: You might want to be talking
that way. Thanks very much.
LISTNUM
1 \l 13295 MR.
CRAIG: Yes.
LISTNUM
1 \l 13296 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13297 I
think you have had your forum to advertise your endowment fund.
--- Laughter / Rires
LISTNUM
1 \l 13298 MR.
CRAIG: Thank you so much.
LISTNUM
1 \l 13299 THE
CHAIRMAN: Let's go on.
LISTNUM
1 \l 13300 Madam
Boulet, who is next?
LISTNUM
1 \l 13301 LA
SECRÉTAIRE: Merci, Monsieur le
Président.
LISTNUM
1 \l 13302 J'inviterai
maintenant la prochaine intervenante, Radio enfant ado à se présenter à la
table des intervenants, s'il vous plaît.
LISTNUM
1 \l 13303 We
will proceed to the next appearing intervenor, the Manitoba Motion Picture
Industry Association, if you will come forward.
‑‑‑ Pause
LISTNUM
1 \l 13304 THE
SECRETARY: Ms Todd, you have ten minutes
for your presentation; thank you.
INTERVENTION
LISTNUM
1 \l 13305 MS
TODD: The Manitoba Motion Picture
Industry Association (MMPIA) supports the CTV application.
LISTNUM
1 \l 13306 My
name is Kim Todd. I'm the Chair of MMPIA
and President of Original Pictures, which is an independent production company
based in Manitoba.
LISTNUM
1 \l 13307 MMPIA
is a non‑profit membership driven organization that represents the
interests of Manitoba's motion picture industry. Our members are individuals, companies,
labour groups, broadcasters, distributors, suppliers and exhibitors representing
more than 1,400 people.
LISTNUM
1 \l 13308 Our
support of the CTV application and our comments are the result of a survey of
our members requesting their views at an open meeting to shape our
intervention.
LISTNUM
1 \l 13309 Many
of the points raised in our letter to the Commission are repeated in other
letters and submissions, and in the interests of time today I will focus mainly
on the issues specific to Manitoba.
LISTNUM
1 \l 13310 CTVglobemedia
has been a good partner to Manitoba's production community. We support their pledge to ensure distinct
programming for CTV and CHUM, to bring financial stability to CHUM and to
enable CHUM to return to their "original programming philosophy".
LISTNUM
1 \l 13311 Our
members feel that their concern about this acquisition reducing the number of outlets
that they have for the sale of their productions is answered by the CTV promise
that there will be separate programming departments and separate executives
with decision‑making power in each broadcaster. We support this as a condition of licence.
LISTNUM
1 \l 13312 I
would like to address the twin sticks discussion which happened recently and
since we have written our letter, at this point before I talk about the
benefits package, because Winnipeg is obviously in that discussion.
LISTNUM
1 \l 13313 In
Manitoba we have experienced the effect of CHUM's waning fortunes. Our Citytv station there laid off more people
than any other City station when the layoffs happened. In fact, we hired one of them at my company.
LISTNUM
1 \l 13314 Much
as CHUM has attempted to be a player and a participant for the producers and
the viewers in Manitoba, it hasn't happened.
LISTNUM
1 \l 13315 We
note that our local programming on the CHUM station is 15 hours per week as
opposed to Edmonton's, which is 31.5.
Alternatively, we have seen CTV meet and surpass commitments to our
community, more, it must be said, than any of the other broadcasters.
LISTNUM
1 \l 13316 We
believe the alternative to the CTV proposal is either the sale of our local
station to a less well capitalized owner, and we will have Citytv all over
again, a struggling station that provides neither the opportunity for
production nor the programming for viewers that it wishes it could; or the
closure of our station.
LISTNUM
1 \l 13317 We
suggest that the twin sticks rule may be outdated in the world of fragmentation
and cable delivery.
LISTNUM
1 \l 13318 Further,
the discussion of Canadian programming in prime time which arose today in the
CTV intervention, it is our understanding that CHUM unfettered by simulcasting,
which is not the case with Global or CTV, and bolstered by CTV's financing,
will provide unique Canadian programming in prime time; programming of the
innovative and daring type that distinguished CHUM in the past. That's programming in drama, arts, music, news
and all other genres.
LISTNUM
1 \l 13319 We
would expect the CRTC to monitor the performance of CTV and CHUM in this regard
and to exercise its power at the time of licence renewals on this point.
LISTNUM
1 \l 13320 On
the benefits package, we support of course the intent to put new funding into
development and production of Canadian television programming. Our support of this particular proposal is
based in part on CTV's impressive performance in our community in the last few
years.
LISTNUM
1 \l 13321 I
point to the paragraph in our letter that describes the CTV Western Development
Office which was established in Winnipeg in 2001 as a part of the benefits
package attached to the CTV purchase of CKY in Manitoba. That office has had a direct impact on
Manitoba's independent production sector: $11 million in production leveraged
from CTV's investment of $600,000 from the Manitoba Script and Development Fund
and $1.6 million from the Local and Regional Programming Initiative; 56
shows licensed over 30 Manitoba production companies.
LISTNUM
1 \l 13322 We
suggest that, given the success of this office and the local CTV development
person who runs it, that a similar CHUM office could be set up in Winnipeg and
in other regional areas of the country.
There is CHUM development office in Edmonton right now that covers
Winnipeg, but due to distance and the differences in provincial industries this
office has not resulted in the development and production of Manitoba
programming in the same way as the CTV office has in Winnipeg.
LISTNUM
1 \l 13323 One
has to note that it takes as long to fly to Edmonton from Winnipeg as it does
to fly to Toronto, so local doesn't really apply.
LISTNUM
1 \l 13324 MMPIA
is not recommending a guaranteed regional spend, but we are requesting that the
Commission require CTV to demonstrate how the regions will be equitably dealt
with under the benefits package and how they will be well represented in the
programming on CHUM. I repeat the notion
that we only have 15 hours of local programming in Winnipeg on CHUM right now
and we would like to have the 31.5 that Edmonton has.
LISTNUM
1 \l 13325 It
is important to us that contributions made under the proposed benefits packages
will be incremental, as discussed and promised by CTV. In part, because CHUM owes a significant
amount of money on the previous benefits package to the Manitoba area still.
LISTNUM
1 \l 13326 And
finally, MMPIA particularly supports the investment of $2.25 million in APTN,
the Aboriginal Peoples Television Network, drama development fund. Our community has one of the largest
Aboriginal populations in the country and it is a priority for us that these
Canadians be represented in our television programming.
LISTNUM
1 \l 13327 We
appreciate this opportunity to appear before the Commission and would be happy
to answer any questions about our particular region or arguments. Thank you.
LISTNUM
1 \l 13328 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13329 Helen,
you had a question?
LISTNUM
1 \l 13330 COMMISSIONER
DEL VAL: Just one small question, Ms
Todd.
LISTNUM
1 \l 13331 On
the regional aspect I think CTV has made their plans out in all of their
submissions. So and your particular
request is that there be a creation of a development officer in Winnipeg
specific to that aspect. Is that your
particular request?
LISTNUM
1 \l 13332 MS
TODD: Yes. It has been our experience that for very
little investment there is a huge payoff to having a person on the ground in
the market.
LISTNUM
1 \l 13333 COMMISSIONER
DEL VAL: And not other regions?
LISTNUM
1 \l 13334 MS
TODD: I mentioned in other regions as
well. Winnipeg is where we live and it
is the example we have where we have either had success or not had success,
depending on the activities of broadcasters.
LISTNUM
1 \l 13335 COMMISSIONER
DEL VAL: Thank you, those are my
questions.
LISTNUM
1 \l 13336 THE
CHAIRPERSON: And you suggest that this
twin sticks policy is outdated given the experience in Manitoba? Have I understood you correctly?
LISTNUM
1 \l 13337 MS
TODD: Yes, sir, we suggest it might
be. It is a new issue that has come
up. We are looking at how it
affects. I mean, if twin sticks refers
to the towers, isn't how things are delivered anymore, and ‑‑
LISTNUM
1 \l 13338 THE
CHAIRPERSON: I know, but I just wondered
why you feel that the experience in Manitoba, which I gather was not conducive
to diversities, necessarily applicable to the rest of the country.
LISTNUM
1 \l 13339 MS
TODD: No, I think it is probably
applicable to the rest of the country. I
am just trying to use our specific experience as an example.
LISTNUM
1 \l 13340 Twin
sticks, in my understanding, refers to one entity owning two channels in a
market. But given the digital channels
and the cable channels and the proliferation and the fragmentation of our
industry it is very difficult, as I think someone else made the point on the
panel, when you are turning the channels you are not aware of where the signal
is coming from anymore.
LISTNUM
1 \l 13341 THE
CHAIRPERSON: Okay. Thank you very much.
LISTNUM
1 \l 13342 MS
TODD: Thank you very much.
LISTNUM
1 \l 13343 THE
CHAIRPERSON: Who is next, Madame Boulet?
LISTNUM
1 \l 13344 THE
SECRETARY: Just for the record, I would
just like to indicate the Canadian Conference of the Arts have advised us that
they will not be appearing as intervener.
LISTNUM
1 \l 13345 The
next two interveners have switched places.
Therefore, I would now call on the Canadian Film and Television
Production Association to come forward.
LISTNUM
1 \l 13346 Mr.
Guy Mayson will be introducing his panel, after which you will have 10 minutes
for your presentation.
INTERVENTION
LISTNUM
1 \l 13347 MR.
MAYSON: Thank you, it is a pleasure to
be here.
LISTNUM
1 \l 13348 Mr.
Chair, members of the Commission, my name is Guy Mayson and I am the President
and CEO of the Canadian Film and Television Production Association.
LISTNUM
1 \l 13349 With
me today are three prominent Canadian producers. On my left here, Ira Levy of Breakthrough
Films & Television of Toronto and Chair of the CFTPA. Among the programs he has executive produced
are kids' shows such as the animated Atomic Betty and Adventures of Dudley the
Dragon, as well as the documentary series Little Miracles and King &
Country.
LISTNUM
1 \l 13350 On
my right, Sandra Cunningham, President of Strada Films in Toronto, is Co‑Chair
of our Feature Film Committee. She is a
Co‑Producer of such Canadian features as The Statement, Being Julia,
Where the Truth Lies and, most recently, Fugitive Pieces and the soon‑to‑be‑released
theatrical feature length documentary 27.
LISTNUM
1 \l 13351 And
to Sandra's right, Julia Keatley, President of Keatley Entertainment of
Vancouver. She's a Creator and Executive
Producer of the drama series Cold Squad and Godiva's. Julia is a past Chair of the association and
co‑chairs our Broadcast Relations Committee.
LISTNUM
1 \l 13352 The
staff members with us today, to my left, are John Barrack, National Executive
Vice‑President and Counsel; Marc Séguin, far end, Vide‑President of
Feature Film and New Technology; in between there is Mario Mota, our Senior
Director of Broadcast Relations and Research.
LISTNUM
1 \l 13353 The
CFTPA represents almost 400 companies that create, finance, produce, distribute
and market feature films, television programs and interactive content for new
digital platforms. The producers on our
panel are here to share with you their experiences in creating Canadian films,
drama and documentary programs and the impact that approval of this transaction
could have on they and their colleagues do business.
LISTNUM
1 \l 13354 The
strategic importance of the combined television assets of CTVglobemedia and
CHUM in terms of their production of original Canadian programming makes this a
landmark transaction. While
CTVglobemedia talked at length about positioning itself vis à vis its Canadian
competitors and the largest international media conglomerates, our concerns
rest with the inordinate influence this single broadcaster could wield within
the Canadian television market.
LISTNUM
1 \l 13355 You
referred to this yesterday, Mr. Chairman, when you spoke of the danger of a
national champion becoming a national predator.
In reply, Mr. Fecan suggests that CTVglobemedia would be on a short
leash because they would be coming before you in 2008 for licence renewal. We have framed these remarks in order to
provide the Commission with our thoughts on just how short that leash should
be.
LISTNUM
1 \l 13356 At
the outset, we would like to say that CFTPA supports this application and, in
general, is not opposed to consolidation in the broadcasting sector provided
sufficient safeguards are in place to alleviate our own and the Commission's
concerns about gate keeping, undue preference and anticompetitive practices.
LISTNUM
1 \l 13357 Our
written submission addressed ownership consolidation, the valuation ascribed to
the television assets and the proposed related benefits. We have made 22 recommendations. Among these are two that we consider
essential, a requirement that CTV enter into a terms‑of‑trade
agreement with us on behalf of the Canadian independent production companies
and, second, that the purchase provide the Commission with a revised package of
benefits pertaining to the television assets.
We have framed these recommendations as conditions for approving the
transaction.
LISTNUM
1 \l 13358 Ira.
LISTNUM
1 \l 13359 MR.
LEVY: Thank you, Guy.
LISTNUM
1 \l 13360 Yesterday,
Mr. Fecan stated that the proposed transaction will expand the diversity of
voices. He told you that growth is a
necessity to face the challenges of the unregulated universe and that with
growth with scale CTVgm will be able to provide the resources to enrich the
programming of the CHUM services. He
said the transaction will result in new opportunities for the production and
promotion of Canadian programming and referred to enhanced quality and
distinctiveness of programming for Canadian audiences.
LISTNUM
1 \l 13361 We
welcome and appreciate these positive statements made on behalf of CTVgm. However, like the Commission, we want to see
those statements framed as something that is measurable, enforceable conditions
of licence.
LISTNUM
1 \l 13362 We
ask you to give this application particular scrutiny because of the enormous
power this single broadcaster will have if you approve this transaction. Never has the pressure from broadcasters on
producer rights been greater. This is
why we need substantive terms‑of‑trade agreements.
LISTNUM
1 \l 13363 We
have been in discussions with CTV on this for more than a year and we are
pleased that they agree with us that terms of trade will ensure fairness,
clarity and responsibility and that such agreements are important for the
stability of the production industry as well as for future growth.
LISTNUM
1 \l 13364 They
have said that they are committed to finalizing a framework that will set clear
parameters for the commercial relationship between Canadian independent
producers and CTVgm. Mr. Fecan also told you yesterday that the terms of any
such agreement would also apply to the CHUM services.
LISTNUM
1 \l 13365 But
he also said that he didn't want completing such an agreement to be linked to
this proceeding, saying that such a requirement would tilt the balance of power
in favour of the producers. Quite
frankly, the power all rests in the hands of the broadcaster. The broadcaster has the choice of which
producers they will work with and it is their commitment to air the program
that is the trigger for all of the financing that producers bring to the
project.
LISTNUM
1 \l 13366 This
is why we are looking for the Commission's support to ensure a fair and more
balance partnership. Requiring a terms‑of‑trade
agreement to be finalized as a condition of licence will ensure that the
negotiations currently underway are successfully completed to the satisfaction
of both parties.
LISTNUM
1 \l 13367 Sandra.
LISTNUM
1 \l 13368 MS
CUNNINGHAM: When CTVgm spoke to you
yesterday about ensuring distinctiveness between the city and CTV stations Mr.
Fecan committed to zero overlap. That is
a good start. But we would like to see that commitment expanded to encompass
zero program overlap between the CHUM and CTV speciality channels.
LISTNUM
1 \l 13369 To
us, diversity and differentiation means separate programming, separate decision
making and separate program budgets.
This is a way to ensure that we continue to have a number of different
doors to knock on when we are seeking buyers for our programming.
LISTNUM
1 \l 13370 Now,
turning to feature film for a moment. As
Steve Heyges stated this morning, the English‑Canadian feature film
industry is in crisis. Outside of the
U.S. feature films simply do not get produced unless there is a broadcast
partner. CHUM is the only Canadian
conventional broadcaster to have played a meaningful role in this regard.
LISTNUM
1 \l 13371 If
CTVgm is serious about the prominent place of feature film on a re‑branded
City TV, a position suggested by Mr. Fecan when he met with our CFTPA Board of
Directors last fall, then it is going to take money, much more than the $10
million over seven years proposed in the current benefits proposal. That equates to about $1.4 million a year or
almost enough to licence and properly support one quality feature film.
LISTNUM
1 \l 13372 For
instance, a sizeable upfront commitment to a project could open the door to the
possible delivery of a quality feature film to the network quite quickly
following its theatrical release allowing for greater promotion and growth of
audiences. So we think a significantly
increased commitment to feature film would provide a unique opportunity for
CTVgm, the feature film community and, most importantly, Canadian audiences.
LISTNUM
1 \l 13373 Julia.
LISTNUM
1 \l 13374 MS
KEATLEY: Thank you, Sandra.
LISTNUM
1 \l 13375 Our
written submission raised a number of concerns with regard to the valuation
report filed with the application. We
disagree with CTVgm's arguments for not including the debt of $270 million and
have recommended that additional benefits should be allocated to development,
licensing and promotion of priority television programming.
LISTNUM
1 \l 13376 We
see merit in may of the proposed television initiatives, but consider that the
amount allocated to support for priority programming should be greatly
augmented. We have recommended that the
purchaser be required to file a revised benefits package as a condition of
approval.
LISTNUM
1 \l 13377 Because
the proposed transaction, if approved, would result in common ownership of two
conventional television operations in five separate markets the CFTPA has
requested that benefits be assessed at 15 per cent of the value of the
transaction.
LISTNUM
1 \l 13378 We
urge CTVgm to ensure that some initiatives are independently administered and
made available to the industry at‑large.
The interactive media sector is a key component of the multiplatform
environment that CTVgm has embraced. We underscore the need for specific and
tangible commitments to this area similar to those made in the context of the
BCE‑CTV transaction.
LISTNUM
1 \l 13379 CTVglobemedia
has said that greater scale would give them greater program buying power. We sincerely hope that they intend this
greater buying power to be devoted to original Canadian production and not just
U.S. purchases.
LISTNUM
1 \l 13380 We
have talked to you about the enormous disparity in the spending by Canada's
largest television broadcasters on foreign mostly‑U.S. entertainment
programming compared to their Canadian program expenditures. In 2005 the foreign Canadian drama
differential was five to one. Recently
released statistical information for 2006 indicates that the portion for
foreign drama expenditure was 87 per cent or a differential of almost 10 to
one. You have heard why this has come
about, competitive bidding for the top U.S. programs to fill prime time.
LISTNUM
1 \l 13381 We
have recommended that a majority of the revised television benefits be accessed
by independent production companies for the creation and production of original
Canadian programming. Only in this way
will you have a clear and transparent means of ensuring that this self‑directed
package of initiatives is clearly incremental.
LISTNUM
1 \l 13382 We
hope that the financial support CTVglobemedia will provide to the city stations
will enable them to match the level of investment and priority programming that
has been previously made by CTV's conventional television stations.
LISTNUM
1 \l 13383 Thank
you. Guy.
LISTNUM
1 \l 13384 MR.
MAYSON: The Broadcasting Act recognizes
a role of independent production within the Canadian broadcasting system. It has producers based in every part of this
country who have the passion and the ability to create content that speaks to
our own culture, values and interest and that tells Canadian audiences our
stories.
LISTNUM
1 \l 13385 This
is where program diversity originates.
We believe that big broadcasters should bear bigger
responsibilities. If CTVglobemedia can
spend more than $1.3 billion to acquire most of CHUM's broadcast assets we
believe that it can well afford to contribute more to the development,
creation, scheduling and promotion of priority programming.
LISTNUM
1 \l 13386 We
have asked the Commission to send a clear message to CTVglobemedia about the
obligations it will be expected to fulfil in return for the privilege of being
granted ownership of additional conventional and speciality television
services. We would like to see evidence
of this particular broadcaster make Canadian programming its number one
priority, not just with words but with expenditure and exhibition commitments.
LISTNUM
1 \l 13387 What
appeals to audiences is programming, it is content. Viewers do not care who provides the content
or how they obtain it. In future
broadcasters' success will depend on connecting to audiences with the best
programming possible. It will mean
making serious commitments to original Canadian programming because the foreign
content is going to be easily accessible in many different ways.
LISTNUM
1 \l 13388 To
do this requires the strengthening of the traditional broadcaster‑producer
partnership to ensure that there is a critical mass of quality, original
domestic content that speaks to Canadian and world audiences. This transaction provides the opportunity to
rebalance the relationship between our member companies and Canada's largest
television broadcaster.
LISTNUM
1 \l 13389 Thank
you for your attention and we would be pleased to answer any questions that you
may have.
LISTNUM
1 \l 13390 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13391 You
were here I presume this afternoon when Mr. Stursberg was here from CBC and you
heard him say quite clearly that he opposes the transaction. In his view there is no necessity for it
other than the death of Mr. Waters and that we should deny it and await other
purchasers making a pitch for it.
LISTNUM
1 \l 13392 And
his fallback position was if not, then at least make them diverse the City
channels and so that there is a greater chance of another network emerging. What is your position on that, on both of
those points?
LISTNUM
1 \l 13393 MR.
MAYSON: I think, simply put, we are
supporting the application. I think that
Mr. Fecan mentioned yesterday there is a complementarity in the acquisition
between the two entities. Provided there
is a very distinct programming strategy for both entities, I think we are
supportive.
LISTNUM
1 \l 13394 THE
CHAIRPERSON: But isn't it in your long‑term
interest that there be a strong network emerging?
LISTNUM
1 \l 13395 MR.
MAYSON: I think ‑‑
LISTNUM
1 \l 13396 THE
CHAIRPERSON: I see your short‑term
benefit or greater benefit of this transaction versus the long‑term
benefits of having a strong network emerging.
LISTNUM
1 \l 13397 MR.
MAYSON: We are also interested in the
long‑term as well. I think the
benefits package is very important. But
what we are really interested in is a distinct programming strategy and a
strong commitment to Canadian programming for ‑‑
LISTNUM
1 \l 13398 THE
CHAIRPERSON: Do you have any position on
whether CTV purchases City group or whether it purchases the A Channels?
LISTNUM
1 \l 13399 MR.
MAYSON: I think, as we said, we support
the application. I think it is a good
fit.
LISTNUM
1 \l 13400 THE
CHAIRPERSON: On page 7 of your
submission you say, "We urge CTVgm to ensure that some initiatives are
independently administered and made available to the industry at‑large." What exactly does that mean, "some
initiatives?"
LISTNUM
1 \l 13401 MR.
MAYSON: I will make a general comment,
but let other people comment too.
LISTNUM
1 \l 13402 I
think there is aspects of some of the benefits that were proposed that we think
should be made generally available to the industry at‑large in terms of
new media in particular, perhaps some promotional packages.
LISTNUM
1 \l 13403 I
think it is important that we see the value of the self‑directed
approach, but I think it is also important to have some elements of the
benefits package available to the industry at‑large.
LISTNUM
1 \l 13404 Do
you want to comment on that, Julia? No?
LISTNUM
1 \l 13405 MS
KEATLEY: I mean, obviously you have
heard from a number of producers who are very happy with the BCE‑CTV
benefits packages and obviously producers who have been beneficiaries of that
would be very supportive of it.
LISTNUM
1 \l 13406 At
our board level we had a great debate about this in terms of self‑directed. I mean, obviously there are kinds of funds
that are out there, whether it be things like the Independent Production Fund
or the Shaw Fund that have come out of various transactions and those also help
to finance various projects.
LISTNUM
1 \l 13407 So
we did debate this but we did see the success of essentially the kind of
programming that came out of the BCE‑CTV benefits was actually, and
overall, a very good thing for the system and I think the kind of hits that
came were good things. And so then in
light of that, in terms of Mr. Stursberg's comments for instance, that this
money should go to the CTF, you know, realistically if you took the $65 million
that is currently on the table for benefits as a one‑time only put into
the CTF it is a drop in the bucket over those number of years.
LISTNUM
1 \l 13408 So
this kind of a proposal actually gives some volume to a transaction at this
time.
LISTNUM
1 \l 13409 THE
CHAIRPERSON: You are one of the few, if
not the only, submission that really refers to multiplatform environment and
new media and suggesting that the benefits be made available to that. Can you explain that to me?
LISTNUM
1 \l 13410 I
mean for us, obviously, where they link here with over‑the‑air
stations and we want to make sure that they stay healthy and that because that
is our primary generator of local content.
I appreciate you can generate local content for all sorts of platforms,
not only for over‑the‑air, but why should we in this case when we
are talking about TV stations make this departure?
LISTNUM
1 \l 13411 Because
it may very well be in that case that only a very small portion goes to the
stations and a lot of it goes to other platforms.
LISTNUM
1 \l 13412 MR.
MAYSON: There was a lot of support
certainly within our own sort of new media community I think for looking at
ways to encourage more interactive content which comes, in many cases, out of
television and so it is more designed to assist on the interactive components
of television programming.
LISTNUM
1 \l 13413 But
certainly the new media industry in general is hard pressed to find sources of
funding and the Bell New Media Fund, which was established in previous
transactions, has been a very important source of funding for new media. So I thought it was an area that could be
explored in terms of putting a benefits package into something like that.
LISTNUM
1 \l 13414 THE
CHAIRPERSON: That is all pretty
vague. What exactly are you suggesting?
LISTNUM
1 \l 13415 MR.
MAYSON: It is all pretty vague?
LISTNUM
1 \l 13416 THE
CHAIRPERSON: Yes. I mean, you say here:
"The interactive media sector
is a key component of the multiplatform environment CTVgm has embraced. We underscore the need for specific and
tangible commitments to this area similar to those made in the context of the
BCE‑CTV transaction." (As Read)
LISTNUM
1 \l 13417 So
translate them to me from BCE‑CTV to CTV CHUM, what do you think we
should accept from CTV in this context?
LISTNUM
1 \l 13418 MR.
MAYSON: I think it is an area that needs
to be explored in terms of a specific commitment that is available to the
entire industry, whether it is set‑up as a separate fund administered by
CTV or put into an existing fund I think there is benefit in this area because
a smaller amount of money can go a great distance in that area.
LISTNUM
1 \l 13419 THE
CHAIRPERSON: Okay. Stuart.
LISTNUM
1 \l 13420 COMMISSIONER
LANGFORD: Just one question to you, Ms
Cunningham, assuming you have authorship and ownership of your statements.
LISTNUM
1 \l 13421 On
page 6, second sentence, you indicate your increased enthusiasm of the zero
overlap idea and then said you would like to see that commitment expanded to
encompass zero program overlap between the CHUM and CTV specialty services.
LISTNUM
1 \l 13422 You
have a lot of recommendations and I got the sense that they are not all equal
in a sense of how devoted you are to them, not that they are not all
important. I wonder in a sense of genre
protection, you know, with the obvious exceptions of things like news and
sports where kind of one to where genre is getting a little harder to
define. But in other areas we do have
genre protection. One thinks of Bravo as
being pretty distinct, MuchMusic is pretty distinct, whereas Discovery and
History are going to be totally different.
LISTNUM
1 \l 13423 I
mean, do you really think you need to put their feet to the fire on this one or
do you want to give them a little bit of leeway so they can have a second
window, they have spent a lot of money on these programs. I mean, just how tough do you want to make it
for them out there?
LISTNUM
1 \l 13424 MS
CUNNINGHAM: I will start, but I will
invite anybody else to jump in, because this was collective.
LISTNUM
1 \l 13425 COMMISSIONER
LANGFORD: Sure, we are a egalitarian to
a fault here.
‑‑‑ LAUGHTER /
RIRES
LISTNUM
1 \l 13426 MS
CUNNINGHAM: For us, it is about ensuring
more Canadian programming and the more overlap that there is the fewer original
programs there are and that is the basic principle.
LISTNUM
1 \l 13427 I
will let my colleagues who produce for television specifically talk about the
specific genres. But I think the idea is
more original programming and let us not disguise that by overlapping too much
in terms of working with a broadcaster to amortize cost.
LISTNUM
1 \l 13428 COMMISSIONER
LANGFORD: Yes, I understand your goal,
but I just wonder whether sometimes, you know, in trying to attain one goal you
might just make it so much difficult on the other side that it is almost not
worth buying programming, they just can't, as you say, amortize it.
LISTNUM
1 \l 13429 MS
CUNNINGHAM: Well, we were actually quite
impressed with the express desire of CTVgm to re‑brand the CHUM stations
including Bravo and certainly City TV and I think that implies a very strong
genre going back to its roots and we logged that.
LISTNUM
1 \l 13430 So
I am not sure that they would necessarily have a problem and will probably
naturally keep distinct channels. But so
philosophically I don't think they would have a problem either. We think it is probably a good business model
for them as well.
LISTNUM
1 \l 13431 MR.
MOTA: Commissioner Langford, if I could
just add to that.
LISTNUM
1 \l 13432 I
think our concern is that the overlap doesn't get any greater than already
exists. We recognize there is already a
lot of overlap when you drill down on individual programs across CHUM's
services and, separating that, CTV's services.
We don't want to see that grow.
LISTNUM
1 \l 13433 I
mean, there was a very recent example where the Commission wrote for a
particular speciality service saying a particular U.S. program they were airing
was not on side with their particular nature of service genre. When you drill down by program there, in
fact, is a lot of flexibility in terms of the programs that they can air
because they fall within a particular programming category.
LISTNUM
1 \l 13434 So
we are just trying to be sure that the overlap is not growing to the extent
that reduces opportunity for producers and for original Canadian programming.
LISTNUM
1 \l 13435 COMMISSIONER
LANGFORD: But this seems to me, if I am
reading it correctly, like absolutely no overlap. So I mean, like that is a big ‑‑
LISTNUM
1 \l 13436 MR.
MOTA: Well, what exists today is fine,
it is because we are bringing these two entities together let us not have the
CHUM service programming end up on CTV's specialty services and let us not have
the CTV's specialty service programming end up on the CHUM services.
LISTNUM
1 \l 13437 COMMISSIONER
LANGFORD: But, why not?
LISTNUM
1 \l 13438 MR.
MOTA: We are just taking it to a new
level.
LISTNUM
1 \l 13439 COMMISSIONER
LANGFORD: But, why not? I mean, obviously, if you are running, for
example, Bravo and you suddenly come on with 15 animated cartoons for kids, I
think the market will take care of you there.
There is not going to be a problem.
Or, you know, you are doing MuchMusic videos, you know, on some channel
where it just doesn't work.
LISTNUM
1 \l 13440 But
if you actually have something that fits with both and there is, as you said,
minimal opportunity for overlap anyway, but I mean if it actually fits why
would we put their feet to the fire so much and just say you just absolutely
can't use this? Isn't that, in a way,
going to hurt you guys in the long run because they are just going to be less
keen to buy and to put big money into programming if they can't get maximum
usage out of it.
LISTNUM
1 \l 13441 MR.
MAYSON: I will say something
quickly. I think it is a very good point
you raise, but I think it goes to the heart of where the concern is in the
production community about transactions of this scale. What you don't want here is to have any kind
of diminishment in opportunities for production. You want diversity, you want to encourage as
much as possible. The more cross‑over
there is it is a major problem.
LISTNUM
1 \l 13442 COMMISSIONER
LANGFORD: We will hear Mr. Fecan reply
tomorrow. I mean, it is just kind
of ‑‑ and I don't want to appear to be pleading his case for
him ‑‑ but I have a sort of proclivity for taking a contrarian
view to everything everyone says and it probably all evens out in the end.
LISTNUM
1 \l 13443 Sorry,
you wanted to say something?
LISTNUM
1 \l 13444 MS
KEATLEY: No, I would just like to
add. I mean, this is one of the things
we are trying to negotiate in our terms‑of‑trade negotiations with
CTV. In fact, if what you did is you
separated out those additional platforms or the licenses then perhaps there
wouldn't be a problem. What is happening
now is for the one, you know, lump licence fee they are taking everything and
the fear is it would go across all those specialties and therefore there is no
secondary market where there used to be.
That is essentially one of the things that we are trying to negotiate.
LISTNUM
1 \l 13445 COMMISSIONER
LANGFORD: Well, good luck with it.
LISTNUM
1 \l 13446 Thank
you very much, those are my questions.
LISTNUM
1 \l 13447 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13448 Madame
Boulet, how may people do we have left?
LISTNUM
1 \l 13449 THE
SECRETARY: We have five more interveners
on the list.
LISTNUM
1 \l 13450 THE
CHAIRPERSON: Okay, let us take a five‑minute
health break. My intention is to try to
get through all the five today, so five minutes literally it is. Thank you.
‑‑‑ Upon recessing
at 1648 / Suspension à 1648
‑‑‑ Upon resuming
at 1701 / Reprise à 1700
LISTNUM
1 \l 13451 THE
CHAIRPERSON: We seem to have lost our
Hearing Officer. Madam Boulet.
LISTNUM
1 \l 13452 THE
SECRETARY: Thank you,
Mr. Chairman. I would now call on
the Alberta Motion Pictures Industries Association, if they are in the room.
LISTNUM
1 \l 13453 All
right, you can go ahead. Please
introduce yourself for the Panel. Thank
you.
INTERVENTION
LISTNUM
1 \l 13454 MR.
PATENAUDE: Mr. Chairman, Commissioners,
my name is Jean Patenaude and I am the Vice‑President North of Alberta
Motion Pictures Industries Association, a nonprofit association also known as
AMPIA, a strong voice from the West.
LISTNUM
1 \l 13455 We
did present you with a written submission.
I didn't want to repeat what we had given you in a written form, but I
thought perhaps I could highlight some areas that we really hold at heart.
LISTNUM
1 \l 13456 We
recognize CTVglobemedia commitment to continue the legacy that Allan Waters and
others began by maintaining the CHUM brand in the CHUM culture. The uniqueness and willingness to take risks
in programming have done a great service in allowing voices from across Canada,
and especially from Alberta in our case, to tell their stories in their own
way. We are also happy to note that
CTVglobemedia will continue to adhere to the specific licence genre of the
specialty services. The CHUM specialty
services play an important role for Alberta's independent producers.
LISTNUM
1 \l 13457 As
we have stated in previous intervention letters and at recent public hearings,
independent producers in Alberta continue to struggle to bring together the
necessary financing to develop and create uniquely Canadian programming. If this transaction is approved, our members
would face an additional challenge of having fewer Canadian broadcasters to
pitch their program concepts to.
LISTNUM
1 \l 13458 While
consolidation has significant fiscal benefits and efficiencies, it also limits
the number of distinct and regional voices that may be seen or heard on our
television screens. So AMPIA
respectfully recommends to the Commission that as a condition of licence
CTVglobemedia agrees to maintain distinctly separate brands between CHUM and
CTV, therefore allowing separate buying of productions from independent
producers to take place.
LISTNUM
1 \l 13459 Mr.
Fecan said yesterday that it is an expectation that this will take place and
that there will be separate buyers. We
want just a little bit more than that.
We want a guarantee that that will actually happen.
LISTNUM
1 \l 13460 AMPIA
also respectfully recommends that the Commission make it a condition of licence
that CTV commits to the continuation of senior development officers. My colleague from Manitoba alluded to that
previously. So decision‑making
capabilities are done in regions, in our case Alberta, as part of this
transaction.
LISTNUM
1 \l 13461 As
AMPIA has discussed with the Commission on prior occasions, this is a critical
matter for our members, to have senior executives who are familiar with our
independent producers, that understand our environment, that understand our
stories and what we are trying to tell.
So that is very important for us to have these senior representatives in
our community, in our case in Edmonton.
LISTNUM
1 \l 13462 AMPIA
is also concerned with the lack of opportunities for underserved
programming. We support the need for
additional dollars for high‑quality dramatic programming.
LISTNUM
1 \l 13463 As
far as dramatic programming, my colleague Bruce Harvey spoke about that earlier
today very eloquently.
LISTNUM
1 \l 13464 So
we believe there should also be opportunities for independent producers from
all strands of productions. It is
important to balance the needs of large budget dramatic programming with other
types of programming also. In addition
to our superb drama producers, we have heard loud and clear, as far as our
membership is concerned, from our documentary and performing arts producers
indicating a critical need for significant first window licence fees for their
hard to finance programs.
LISTNUM
1 \l 13465 It
turns out this way. I am an artistic
producer and I will illustrate what is happening to me and then you will
understand how we stand over there in Alberta, because there are some artistic
producers.
LISTNUM
1 \l 13466 It
has become very difficult in Canada to produce artistic programming in both
French and English and in trying to represent the regions, in my case Alberta.
LISTNUM
1 \l 13467 We
need significant first windows financing for performing arts. As an example, the new Canadian operas. I produced last year Filomena. Filomena was on opening night. Opening night is gone. First windows are gone. When are we going to see an opera on our
screens again?
LISTNUM
1 \l 13468 There
is also extensive music documentaries, artistic series. There are now in Canada, in both French and
English, very few broadcasters left to support original artistic programming,
especially from the regions, and that will be shown on prime time television in
our country.
LISTNUM
1 \l 13469 So
what I'm trying to say is that in this transaction Bravo! has become very
important in promoting the arts along with its counterpart RTV in French
Canada.
LISTNUM
1 \l 13470 Finally,
AMPIA has a major concern in regards to ongoing yearly sponsorship support for
Alberta's production community. For over
32 years AMPIA has presented the Alberta Film and Television Awards, an annual
fundraiser that celebrates honours and acknowledges the individuals involved in
Alberta's film and television industry.
This support is extremely important for AMPIA. The funds raised at the yearly event are
specifically dedicated to professional development workshops and seminars to
assist in continued growth and development of our members.
LISTNUM
1 \l 13471 We
are pleased to advise the Commission that over the years both CTV and CHUM have
always been generous supporters of this annual event, including CHUM's yearly
commitment to license the program for broadcast on their specialty channels and
an Citytv stations and Alberta.
LISTNUM
1 \l 13472 However,
in previous transfers of ownership, we have experienced, AMPIA has experienced,
a critical erosion of sponsorship support when two broadcast companies become
one and the new owner determines that it is no longer necessary to have
separate profiles at this major event and tends to treat sponsorship
commitments as a cost‑saving opportunity.
LISTNUM
1 \l 13473 So
AMPIA is hopeful that this will not be the case if this application by
CTVglobemedia is approved.
LISTNUM
1 \l 13474 I
will just close with this on a positive note, because we are in support of this
transaction. We see over here a
tremendous opportunity for the production of Canadian programming through this
transaction. With more dollars there
will be more investment into independent production.
LISTNUM
1 \l 13475 We
would respectfully suggest that CTVglobemedia has a real opportunity to grow
the Canadian audience by investing in new Canadian programming, but especially
by investing significantly in independently produced regional programming.
LISTNUM
1 \l 13476 Thank
you.
LISTNUM
1 \l 13477 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13478 Elizabeth,
did you have some questions?
LISTNUM
1 \l 13479 COMMISSIONER
DUNCAN: Your presentation today was very
clear and so were your written remarks.
LISTNUM
1 \l 13480 I
wanted to just clarify, what currently is the situation with the Senior
Development Offices? Is there both a
CHUM and a CTV Development Officer in Alberta?
LISTNUM
1 \l 13481 MR.
PATENAUDE: Just CHUM.
LISTNUM
1 \l 13482 COMMISSIONER
DUNCAN: Just CHUM?
LISTNUM
1 \l 13483 MR.
PATENAUDE: CHUM, yes, through Citytv and
Access and all that. In Edmonton, yes.
LISTNUM
1 \l 13484 COMMISSIONER
DUNCAN: In Edmonton?
LISTNUM
1 \l 13485 MR.
PATENAUDE: Yes.
LISTNUM
1 \l 13486 COMMISSIONER
DUNCAN: So that is what you are looking
for, is continuation of that one position?
LISTNUM
1 \l 13487 MR.
PATENAUDE: Yes. We wanted to continue, yes.
LISTNUM
1 \l 13488 COMMISSIONER
DUNCAN: All right. Those are all my questions, Mr.
Chairman. Thank you.
LISTNUM
1 \l 13489 THE
CHAIRPERSON: With regard to sponsorship,
if I understood you correctly, it is your expectation, because CTV will
continue the two labels, CTV and City, that there will continue to be two
sponsorships?
LISTNUM
1 \l 13490 MR.
PATENAUDE: That is the concern.
LISTNUM
1 \l 13491 THE
CHAIRPERSON: Yes. You expressed a concern. You didn't express a remedy. That is why I was wondering what you had in
mind.
LISTNUM
1 \l 13492 MR.
PATENAUDE: Yes. Well, the concern is that it will become one
or one will see the other and that it will be just one sponsor.
LISTNUM
1 \l 13493 THE
CHAIRPERSON: You heard Mr. Fecan stating
that there would be no overlap in programming and so obviously he is going to
sell it under two labels, either on the City label or CTV.
LISTNUM
1 \l 13494 MR.
PATENAUDE: That is, yes.
LISTNUM
1 \l 13495 THE
CHAIRPERSON: So that should address your
concern.
LISTNUM
1 \l 13496 MR.
PATENAUDE: Hopefully, yes.
LISTNUM
1 \l 13497 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13498 MR.
PATENAUDE: Thank you.
LISTNUM
1 \l 13499 THE
CHAIRPERSON: Madam Boulet?
LISTNUM
1 \l 13500 THE
SECRETARY: Thank you, Mr. Chairman.
LISTNUM
1 \l 13501 We
have had to rearrange the order of some of the interveners appearing and I
appreciate the cooperation of the two interveners that will have to be delayed
until tomorrow.
LISTNUM
1 \l 13502 I
would now call on the Association of Canadian Advertisers to come forward for
their presentation. They will be the
last appearing intervener for the day.
‑‑‑ Pause
LISTNUM
1 \l 13503 THE
SECRETARY: Please introduce yourself to
the Panel and you will have 10 minutes for your presentation.
INTERVENTION
LISTNUM
1 \l 13504 MR.
REAUME: Thank you very much. Good afternoon.
LISTNUM
1 \l 13505 Mr.
Chair, Commissioners, Commission staff, my name is Bob Reaume and I am Vice‑President
Policy and Research at the Association of Canadian Advertisers.
LISTNUM
1 \l 13506 With
me is Ron Lund who you have met before, President and CEO of our organization.
LISTNUM
1 \l 13507 We
are very pleased to have this opportunity to appear and comment before you
today to represent the views of advertisers in Canada.
LISTNUM
1 \l 13508 As
we have pointed out many times before, advertising is a primary resource
sustaining the Canadian broadcasting system.
In all its forms, advertising is estimated to represent an annual
$13 billion investment in the Canadian economy. Of this total amount, approximately $3
billion is invested annually in television advertising. It is a substantial contributor of funds to
the Canadian television broadcasting system, and clearly the role of
advertising is critical to a healthy and robust broadcasting system in Canada.
LISTNUM
1 \l 13509 In
short, advertising brings essential economic strength to the system.
LISTNUM
1 \l 13510 For
many advertisers, conventional broadcasting continues to be the workhorse of
brand building. Advertisers have also
embraced and supported the many and varied specialty channels that the
Commission has licensed, but it is still conventional stations where
advertisers go to purchase mass audiences.
LISTNUM
1 \l 13511 Strong
and stable media companies are not only important to advertisers, but to the
broadcasting system as a whole. CTV has
consistently provided advertisers with a proven track record of programming
that performs and no doubt will continue to offer advertisers sound and steady
leadership in broadcasting in Canada.
LISTNUM
1 \l 13512 They
have been, and no doubt will continue to be, terrific partners with Canadian
advertisers. That is why we do not
object to the bulk of this merger. It is
important that strong broadcasting companies be able to flourish in Canada.
LISTNUM
1 \l 13513 Adding
radio assets, for instance, to the television and newspaper offerings from
CTVglobemedia provides advertisers with opportunities and options for media mix
synergies.
LISTNUM
1 \l 13514 Not
unlike other interveners, we believe that the addition of the Citytv stations
to the CTVglobemedia stable, however, does give us cause for serious
concern. For advertisers, if this
portion of the merger is allowed, then the markets of Toronto, Winnipeg,
Calgary, Edmonton and Vancouver will all have two very local stations by the
same owner and will create undue competitive advantage.
LISTNUM
1 \l 13515 Advertisers
seeking time in those markets in the future would find it extremely difficult,
if not impossible, to buy around CTV, leaving them unable to exert any
substantial leverage in response to unacceptable price offerings. Excessive market cost increases for TV time
would be inevitable and force manufacturers to pass these costs on to
consumers. The Commission's long‑standing
common ownership policy of one conventional station, one owner, one market, has
served the broadcasting system well. It
has ensured healthy competition and diversity of voices.
LISTNUM
1 \l 13516 If
this merger were approved by the Commission, it would represent the first time
that this policy is breached.
LISTNUM
1 \l 13517 The
applicant has suggested that the Commission has already set several precedents
in this regard by allowing, for instance, CanWest's ownership of CHCH‑TV
Hamilton as well as common ownership of stations in Red Deer, Calgary and
Edmonton, Barrie, Toronto, Victoria, Vancouver, et cetera.
LISTNUM
1 \l 13518 In
our opinion, these are true exceptions.
The Red Deer, Barrie, Hamilton and Victoria stations all have licences
to serve those specific markets, licences that come with obligations for local
programming, local news, and local advertising sales. Exceptions for distinct but nearby markets
are much different, in our opinion, than two local operations in the very same
city.
LISTNUM
1 \l 13519 The
applicant argues, quite rightly, that past ratings success is never a predictor
of future success, but if anything is, it most certainly is the number of local
distribution channels. This merger would
give CTV two local signals in five top markets in English Canada and confer an
undue competitive advantage.
LISTNUM
1 \l 13520 We
believe the Commission should approve this merger to preserve strong and stable
broadcast entities in Canada but also require that the applicant divest itself
of the five Citytv stations in order to preserve healthy competition and an
important and successful policy.
LISTNUM
1 \l 13521 Mr.
Chair and Commissioners, we thank you again for the opportunity to present our
views on behalf of Canada's advertisers and we wish you well in your
deliberations.
LISTNUM
1 \l 13522 We
know that time is tight this evening as well, but if you do have questions we
would be happy to answer.
LISTNUM
1 \l 13523 THE
CHAIRPERSON: Thank you very much. We too are also reaching the saturation point,
but I appreciate your short and very precise submission.
LISTNUM
1 \l 13524 Going
right to the bottom line at the end, were you suggesting that we should ask CTV
to divest the five City station? What is
your position on the A‑Channels?
LISTNUM
1 \l 13525 MR.
REAUME: The A‑Channels are more
analogous to what the CanWest organization has in operation right now, in our
opinion. It is never our position to
suggest to a company what they should sell or buy. So I can't tell you that we think they should
keep the A‑Channels and divest the Citytv channels, but that would seem
to be, I think, a more analogous situation.
LISTNUM
1 \l 13526 THE
CHAIRPERSON: But you seem to echo here
what I said yesterday, that the A‑Channels seem to fall more readily into
the exceptions so far established in the City channels.
LISTNUM
1 \l 13527 MR.
REAUME: Indeed.
LISTNUM
1 \l 13528 THE
CHAIRPERSON: So if that was the line we
would take, would that address your concerns?
LISTNUM
1 \l 13529 MR.
REAUME: It would.
LISTNUM
1 \l 13530 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13531 Rita,
did you have any questions?
LISTNUM
1 \l 13532 COMMISSIONER
CUGINI: Yes, just a couple of questions
for clarification. It may be the time of
day, but can you please explain to me anyway what you mean when you say at the
bottom of page 3 "to buy around CTV"?
LISTNUM
1 \l 13533 MR.
REAUME: In broadcast buying, our
agencies that we hire to do this for us will go into the marketplace and
hopefully they still have a couple of options available to them in a market to
purchase.
LISTNUM
1 \l 13534 They
will compare prices. They will price
shop. If one entity owns 50 percent of
the inventory in a market, you can't buy around them. In other words, you will have to buy
something on the CTV‑CHUM entity.
If they know that and we know that, they pretty much can name their
price.
LISTNUM
1 \l 13535 COMMISSIONER
CUGINI: So your fear is that the price
will be so inflated.
LISTNUM
1 \l 13536 MR.
REAUME: Yes.
LISTNUM
1 \l 13537 COMMISSIONER
CUGINI: And even if they inflate their prices,
your advertisers don't have any other choice but to buy.
LISTNUM
1 \l 13538 MR.
REAUME: We have other choices, but we
could not get our total objective from the other choices. We will have to at least put a portion of our
buy on the CTV‑CHUM entities.
LISTNUM
1 \l 13539 COMMISSIONER
CUGINI: Were you here earlier today for
the CBC intervention?
LISTNUM
1 \l 13540 MR.
REAUME: We were.
LISTNUM
1 \l 13541 COMMISSIONER
CUGINI: And would it be safe to say that
in essence you agree with this chart that they provided and explained, or to a
certain degree?
LISTNUM
1 \l 13542 MR.
REAUME: Well, I would say to a certain
degree we do agree. But before I would
say categorically, I would like to study it a little bit more.
LISTNUM
1 \l 13543 COMMISSIONER
CUGINI: Fair enough.
LISTNUM
1 \l 13544 One
final question. Do you consider Toronto‑Hamilton
to be one market?
LISTNUM
1 \l 13545 MR.
REAUME: BBM Nielsen says it is one
market.
LISTNUM
1 \l 13546 COMMISSIONER
CUGINI: Right.
LISTNUM
1 \l 13547 MR.
REAUME: And for purchasing, it would be
one market. But the trouble with that
statement is that no buyer is going to go out and approach CHCH Hamilton as the
first buy in the Toronto‑Hamilton market to cover Toronto. They are not going to approach CHCH. It is not considered to be a Toronto station,
or a top line Toronto station.
LISTNUM
1 \l 13548 You
can carry that reasoning too far. Do we
think Home and Garden Television is a Toronto station? It is available in nearby markets.
LISTNUM
1 \l 13549 COMMISSIONER
CUGINI: Right. But if you want to buy the Toronto audience
that is watching 20/20 you have to go to CH to buy that Toronto audience.
LISTNUM
1 \l 13550 MR.
REAUME: Yes. Yes, because they are the only entity, sure,
with that program, yes.
LISTNUM
1 \l 13551 COMMISSIONER
CUGINI: All right. Thank you.
LISTNUM
1 \l 13552 Thank
you, Mr. Chairman.
LISTNUM
1 \l 13553 THE
CHAIRPERSON: Thank you very much.
LISTNUM
1 \l 13554 Madam
Boulet, I gather we have a complication?
LISTNUM
1 \l 13555 THE
SECRETARY: We have three intervenors
left. I understand the Canadian
Association of Film Distributors and Exporters are in the room and cannot stay
for tomorrow, if they are still here.
LISTNUM
1 \l 13556 THE
CHAIRPERSON: All right. Would you come forward. I warn you, we are literally at the saturation
point. I apologize, but there is only so
much one can absorb in one day.
LISTNUM
1 \l 13557 So
come right to the point.
LISTNUM
1 \l 13558 MR.
EAST: Thank you.
LISTNUM
1 \l 13559 THE
SECRETARY: Please introduce yourself for
the record.
INTERVENTION
LISTNUM
1 \l 13560 MR.
EAST: I will be brief. My name is Ted East and I am President of the
Canadian Association of Film Distributors and Exporters and I'm going to be
brief. I am just going to highlight and
expand on some of the key points we made in our written submission.
LISTNUM
1 \l 13561 We
think it is important to stress how important a traditional broadcast licence
is for feature films. I will just go
through this quickly.
LISTNUM
1 \l 13562 In
the 1930s the average Canadian would go to the movie theatre between 40 and 50
times a year. Now the number is between
four and five. Our love of film has not
decreased. In fact it has increased. Canadians are now watching movies mostly at
home.
LISTNUM
1 \l 13563 CAFDE
members have long been frustrated by the lack of feature film programming by
traditional broadcasters. The only
consistent buyer for films has been Citytv.
They have been important partners for Canadian producers and distributors
and have had a long and distinguished track record in programming and promoting
Canadian films.
LISTNUM
1 \l 13564 So
the news that they had been purchased by CTV GM makes us nervous and we feel
any reduction in support for feature film by the traditional broadcast sector
could be disastrous.
LISTNUM
1 \l 13565 Therefore,
we are urging the CRTC to ensure that support for films at City by CTV GM be
continued and in fact strengthened.
LISTNUM
1 \l 13566 I
should say that I have met with Mr. Fecan and Mr. Sparkes who made a very
convincing case about their commitment to feature films at City in the future,
and I was very encouraged to hear this and believe that they were being
sincere.
LISTNUM
1 \l 13567 However,
we have seen broadcasters change their minds or not live up to promises in the
past.
LISTNUM
1 \l 13568 In
the year 2000, before this Commission the CBC committed to invest $30 million
over five years in the production, acquisition and promotion of Canadian films,
a commitment they did fall short of.
LISTNUM
1 \l 13569 Looking
at CTV GM's benefits package, we noted very limited support for feature
films. We believe 33 percent of the
benefits package dedicated to television programming should be allocated to the
production, promotion of Canadian films.
We are also in agreement with the CFTPA, the WGC and others in
recommending increasing the benefits package to 15 percent of the
transaction and we are also recommending increasing the number of original
hours from 100 to 250 per year.
LISTNUM
1 \l 13570 That
is my quick presentation.
LISTNUM
1 \l 13571 THE
CHAIRPERSON: Certainly short and to the
point.
LISTNUM
1 \l 13572 Helen...?
LISTNUM
1 \l 13573 COMMISSIONER
del VAL: Thank you.
LISTNUM
1 \l 13574 I'm
just referring to your written submissions where one of the recommendations is
that the CRTC ensure safeguards are put in place to prevent anti‑competitive
practices. Is there any practice that
you can think of that has not been mentioned already?
LISTNUM
1 \l 13575 MR.
EAST: No, I think everything has been
covered.
LISTNUM
1 \l 13576 COMMISSIONER
del VAL: Thank you very much.
LISTNUM
1 \l 13577 Those
are my questions, Mr. Chairman.
LISTNUM
1 \l 13578 THE
CHAIRPERSON: Thank you.
LISTNUM
1 \l 13579 MR.
EAST: Thank you.
LISTNUM
1 \l 13580 THE
CHAIRPERSON: We will then resume
tomorrow morning and deal with the remaining intervenors. Then we will hear from you, Mr. Fecan, and we
will have some questions for you and that will be the end.
LISTNUM
1 \l 13581 I
have to give a speech tomorrow at noon to the Québec Association of
Broadcasters, so we have to be out of here by 11:30 at the latest. Hopefully we will be out before that.
LISTNUM
1 \l 13582 How
many intervenors to have tomorrow?
LISTNUM
1 \l 13583 THE
SECRETARY: Mr. Chairman, we have two
more intervenors left for the morning.
LISTNUM
1 \l 13584 THE
CHAIRPERSON: Why don't we start at nine
o'clock tomorrow morning. Thank you.
LISTNUM
1 \l 13585 THE
SECRETARY: Thank you.
‑‑‑ Whereupon the
hearing adjourned at 1725, to resume
on Wednesday, May 2, 2007 at 0900 / L'audience
est ajournée à 1725, pour reprendre le mercredi
2 mai 2007 à 0900
REPORTERS
____________________ _____________________
Kristin Johansson Monique
Mahoney
____________________ _____________________
Jean Desaulniers Jennifer Cheslock
- Date de modification :