Bluepoint Investment Corp., a holding company wholly owned by media agency veteran Bruce Claassen, has entered into an agreement to purchase Brandon, Man. television station CKX-TV from CTV Inc. for $1.
The acquisition is expected to be finalized by Dec. 31, once it receives approval from the Canadian Radio-television and Telecommunications Commission.
The Brandon station was one of three that Calgary-based Shaw Communications Inc. had agreed to buy for a dollar earlier this year. Shaw backed out of the deal late last month, leaving CTV—which had not planned to renew the station’s licence—in search of a new buyer.
CKX-TV is the first acquisition for Bluepoint, which was launched only two months ago by Claassen, chairman of Aegis Media Canada and CEO of Genesis-Vizeum Inc.
In an interview with Marketing, Claassen reiterated an earlier statement by Bluepoint CEO Colin Berrie that the company intends to become a “significant media player” in the North American market.
“We have generated a significant amount of investment funds from both Bay Street and Wall Street and this is our first purchase,” said Claassen. “We are in the middle of negotiations to purchase some Canwest stations as well as some U.S. stations.
“It’s part of something we’re looking to build that’s much broader-based, not just Canadian. We’re looking at Comcast and Warner and a whole bunch of other stuff as opportunities.”
Claassen said local Canwest stations in Vancouver, Victoria and Red Deer, Alta. were among those Bluepoint is currently negotiating to purchase.
As a private company, Bluepoint would have access to the $100 million Local Programming Improvement Fund where its previous owners could not.
“Because we’re Canadian and we’re independent, we have the opportunity to take advantage of the improvement fund, which perhaps larger organizations such as CTV couldn’t take advantage of,” he said. “That will offset some of the losses the station has incurred.”
Claassen said an improved economy with greater advertising investment, along with the possible implementation of fee-for-carriage, could also boost the station’s fortunes.
“All of those factors together suggest that there is a future for the local stations,” he said.
Claassen acknowledged that the risk involved in the acquisition is not accurately reflected by the $1 price tag.
“You buy it for a buck, but it isn’t like some kid down the street opening up a lemonade stand. You’re buying 39 employees, and they have pensions,” he said. “There’s losses of half a million dollars a year, so you’re taking on liability… It’s not a buck, it’s millions and millions of dollars here that’s in play.”
He also said it was too early to speculate on any possible staffing changes though he believes employees will at least have a better sense of where they stand.
“The staff, probably for the last year or two, have been sitting around twiddling their thumbs, nervous as hell about what’s going to happen to their jobs, and when you’re sitting in Brandon, it isn’t like there’s another TV station down the street,” said Claassen. “The most important thing we can do is go there and say, look, we’ve made a decision to invest here, and we’re here to build, not to destroy.”
Claassen said he would also work with CBC, which recently decided not to renew its affiliate agreement with CKX-TV, to preserve some form of partnership with the public broadcaster.
“[The CRTC] wants to make sure we maintain some relationship with the CBC affiliates. We have asked the vendors to make sure we have an à la carte menu so we can keep some CBC programming on-air.”
Claassen noted that Bluepoint is now and will remain a holding company only, and that a separate company will be created when the acquisition of CKX-TV is officially approved.
