CANADIAN MEDIA LANDSCAPE 2007
July 2006
CTVglobemedia Inc.-CHUM Ltd
CTVglobemedia adds to its specialty TV portfolio and makes a foray into radio. However, it is ordered to sell off the prized Citytv assets by the CRTC
CTVglobemedia, formerly Bell Globemedia, got the acquisition ball rolling with its $1.7-billion deal for CHUM Limited. CHUM would remain independent as long as founder Allan Waters was alive, but everything changed when he died at the age of 84 in December 2005. The deal seemed a slam dunk for CTVglobemedia when it announced the purchase and planned sale of the five A-Channels to appease Ottawa bureaucrats. Upon approving the deal in June, however, the CRTC ordered CTVglobemedia to sell off the five Citytv stations, which were subsequently snapped up by Rogers Communications. Today, Bay St. analysts are divided on the wisdom of the purchase. “Probably the best deal was Bell buying CHUM,” says David McFadgen, media analyst with Cormark Securities. “They are keeping all the specialties, which is a better business, [and] they got a good price.” But another Bay St. analyst offers a different opinion. “The CHUM deal doesn’t look that great,” he says, noting that radio is not a core competency for CTVglobemedia, and the transaction as ultimately approved by the CRTC is not what the company envisioned. “It’s still a good deal for CTV, but they obviously totally misread the tea leaves or mis-executed on the regulatory side [with the CRTC]. They didn’t get what they wanted.”
January 2007
CanWest-Alliance Atlantis
CanWest bolsters its specialty TV portfolio with a long-rumoured deal for Alliance Atlantis. The deal is awaiting regulatory approval
Financially the most complicated deal of the year, CanWest’s $2.3-billion takeover of the specialty broadcaster has the support of U.S. investment banking giant Goldman Sachs, which has taken the performance risk of the CSI series off CanWest’s hands. CanWest, which was a weak player in specialty broadcasting with eight digital specialty channels including TVTropolis (formerly Prime), gets Alliance Atlantis’ 13 specialty channels-including History, Showcase and HGTV-as well as five others in the works. “CanWest needed additional cable, so from that perspective it gives [advertisers] more assets when doing multi-media platform” buys, says Debbie King of ZenithOptimedia. It’s also a deal media buyers are watching with interest. “You are going to have two players now in the market that have the bulk of the specialty channels,” adds Bruce Claassen, CEO of Genesis Media and president of the Canadian Media Directors’ Council. “Could these two in an oligarchy start increasing the pressure on ad prices for specialty? Perhaps.”
February 2007
Astral Media-Standard Inc.
Astral pays $1.08 billion for Standard’s 52 radio stations in 29 markets, becoming the country’s largest radio broadcaster. The deal is awaiting regulatory approval
What do you get when you combine two geographically separate radio networks to build the country’s largest radio broadcaster? Apparently not much, if you listen to investment analysts. “I don’t think that is a particularly good deal,” says David McFadgen, media analyst with Cormark Securities. “[Astral] is paying over $1 billion, and Standard has 40% margins. The best they are going to do is grow with the market. You can’t take any more costs out, because it has already been stripped down; you have one or two bad [ratings] books, and kiss those margins goodbye. They paid at the top of the market.” That negative assessment is shared by another anonymous analyst. “I still think that’s a bad deal,” he says. “Astral bought Standard not because they wanted it, but because they missed CHUM and Alliance Atlantis. So Astral ended up with Standard and I think they will rue the day they bought it.” It’s certainly a good deal for the Slaight family, which said it had no overwhelming desire to sell but couldn’t refuse the hefty buyout in an industry notorious for its hot and cold acquisition moods.
June 2007
Rogers Communications-Citytv stations
Rogers adds the iconic Citytv brand to its media portfolio. Deal still awaiting regulatory approval
Media buyers and advertisers breathed a sigh of relief when Rogers was able to translate its initial purchase of five second-tier A-Channel stations into the crown jewel of the CHUM empire-namely the five Citytv channels in major markets such as Toronto, Calgary and Vancouver. “We lost CHUM as a major television competitor, only to get Rogers as a major television competitor, so that’s not so bad,” notes Claassen. Funding the $375-million purchase of the stations is pretty much pocket change for a media giant like Rogers, which earns the bulk of its profit and revenue from its wireless and cable TV businesses. A longer-term goal, one analyst says, is to get CRTC approval to more closely link its OMNI television stations with Citytv.
July 2007
Quebecor Media-Osprey
After being left out of the bidding for Citytv, Quebecor adds to its Ontario newspaper holdings with a $414.4-million bid for Osprey Media.
Shut out of the major deals, Quebecor was forced to engage in a bidding war with Black Press for Osprey, one of the country’s last remaining independent media operations. Adding Osprey gives Quebecor more heft in southern Ontario, where it will find itself going head-to-head with Torstar, just as the companies do in Toronto with the Sun and Star respectively. Criticism, and praise, is muted for the purchase. “I think it makes sense,” says David McFadgen, media analyst with Cormark Securities. “They paid up, but I think they will be able to attract a lot of synergies. They’re good newspaper operators and community newspapers are still a good business to be in.”
