While extreme makeovers have been taken off the schedule for Alberta’s television lineup, viewers may still find the latest regulatory decision is not the final answer.
The Canadian Radio-television and Telecommunications Commission (CRTC) recently turned down Toronto-based CHUM Ltd.’s application to open two new stations in Calgary and Edmonton, and also rejected a CanWest Global Communications Corp. request to install transmitters from its Red Deer television station in both cities.
But a leading industry analyst still expects changes to the provincial broadcast landscape in the days ahead. Ian Morrison, of the Friends of Canadian Television, doesn’t see CHUM as having come out on the short end of the stick.
Morrison says he believes the viability of Calgary-based Craig Media Inc., Canada’s largest privately held television broadcasting company, was the real reason CHUM was blocked – for now – from entering the Alberta market.
“Despite their comments to the contrary, I believe that the CRTC decision was influenced by the fragility of Craig’s position and a sense that having an extra station in Calgary and Edmonton would just complicate matters in the post-Craig world,” says Morrison.
“I think CHUM’s application forced the (CRTC) hearing and the commission is perfectly within its rights to say that they concluded that the market could not support another player. I just don’t believe that this argument was the determining factor in their decision, but rather an excuse to not expand the number of players in an environment of Craig uncertainty,” adds Morrison.
The Craig empire, which includes A-Channel Calgary, A-Channel Edmonton, A-Channel Manitoba, a new Toronto station, and specialty channels MTV Canada and TVLand, among others, is widely reported to be on the block and in difficulty.
The company, however, has also said it is not up for sale, but rather is “seeking strategic contacts.”
In announcing its decision on the CHUM application, the commission said it looked at growth in advertising revenues and the profitability of stations already operating in the market.
For Calgary, Edmonton and Red Deer, the CRTC reported that it found advertising revenues only increased by 6.5 per cent between 1998 and 2002, while the average profit margins earned by private conventional television stations in these markets, before interest and taxes, decreased significantly from 1997 to 2002.
“Although the financial data now available for 2003 indicate substantial improvement in the performance of the Calgary and Edmonton markets, the commission is not prepared to view the data for 2003 as conclusive evidence that the Calgary and Edmonton television markets could support the licensing of new stations at this time,” it said.
Morrison believes the CRTC put the interest of the licensees over Albertans’ viewing needs. “I believe that Craig is toast and the decision merely lays the ground for its dismemberment.”
He also sees Toronto-based CHUM as the “odds-on favourite” to acquire Craig’s A-Channel Alberta stations in a restructured environment, after shedding the Toronto channel to another player since it is already in that market.
“CHUM would love to have Alberta because they’ll become more competitive with organizations like CTV. Alberta is more important than its apparent share because all of a sudden it would give CHUM a national reach. You could survive without Saskatchewan, but not Alberta,” says Morrison, in reference to national advertisers such as General Motors.
“When you can deliver British Columbia, Alberta and Ontario and have ways of delivering ads in Atlantic Canada, you’re close to a national reach. It’s enough for national advertisers anxious to do national buys and you can compete with CTV and Global. Alberta is the linchpin that they need.”
Mario Mota, an Ottawa-based industry analyst and president and publisher of Decima Publishing Inc., says should CHUM end up purchasing the Craig operations, “approval would be a slam-dunk.”
“The CRTC wouldn’t want the stations to be off the air. It would be a natural evolution of those stations if that were the scenario to play out,” says Mota, referring to similarities in formats and programs run by both broadcasters.“It is far more efficient (to buy) and allows them to go to market that much quicker.”
CHUM president and CEO Jay Switzer says while disappointed, he respects the CRTC’s decision. “We maintain our belief in the strength and importance of the Alberta market and remain committed to finding a way to provide local television service to Albertans,” he says. “We will continue to pursue any acquisition or licensing opportunities that may arise in the near or medium term.”
In a statement, Craig president and CEO Drew Craig called the CRTC decision a win for viewers in Calgary and Edmonton. “The CRTC has acknowledged that the health of the market is critical in order for local broadcasters to serve their audiences well. We look forward to continuing to provide the most comprehensive local coverage in our markets.”
In turning down the Global request to add CKRD transmitters, the CRTC said approving the application would have had a long-term negative impact on existing television services.
“Furthermore, CanWest Global Communications Corp., which owns Global, is aalready the largest owner of media companies in Alberta. Approving the Calgary and Edmonton transmitters would therefore increase the level of concentration of ownership and cross-media ownership in those markets,” the CRTC said in its ruling.
But the CRTC did approve Global’s application to disaffiliate CKRD from the CBC network at such time as the CBC commences the operation of new transmitters in Coronation and Red Deer.
Global is still reviewing the situation.
“We’re currently assessing our options,” said Chris McGinley, general manager Alberta for Global Television. “We’ve read it (the decision) and there’s lots to it. We are deciding what our options are, but at this point we haven’t made a decision on how to proceed.”
