The venue had changed. Corus Entertainment Inc. had defected to the side of the supporters. And Pierre Karl Péladeau, now officially retired from the daily affairs of Quebecor Inc., shone by his absence.
But the second hearings on the Bell-Astral merger, held in Montreal this week by the Canadian Radio-television and Telecommunications Commission (CRTC), had all the feeling of an old rerun on the Cinépop classics’ TV chain.
One after the other, opponents to the $3.4-billion transaction took turns in front of the microphone to blast the “Astral light” deal, as Bell Media promises to sell off Astral’s stake in 11 television services and 10 English-language radio stations to ease concentration concerns. If you closed your eyes, you fell right back into September, when the first hearings were held.
Louis Audet, president and chief executive officer of Cogeco Inc. and its cable affiliate, came out swinging against Bell – aka the “gorilla.” Its revised deal, which he described as “odious” and “very dangerous,” is no better than the first transaction, which the CRTC shot down over fears of an outsized influence and of an excessive market power.
But Mr. Audet might have been alone in being totally faithful to his initial opposition. Quebecor, which has previously allied with Cogeco to form the now-defunct “Say No to Bell” coalition, had a slightly different take this time around.
Officially, Quebecor is still dead set against this transaction. Robert Dépatie, the media group’s new president, did his best to impersonate Mr. Péladeau and his inimitable sense of indignation. “A monster will be created,” he said.
But in its submission to the CRTC, Quebecor identified strict conditions under which the merged companies could operate, should the CRTC err and approve the transaction in a moment of absent-mindedness. Implicit in this is the pragmatic recognition that the CRTC might well approve the transaction this time around.
Bell was stung by the CRTC’s outright rejection of its initial merger plan. But before it came back with its new proposal, the company did its homework. The divestitures Bell is planning will reduce the merged companies’ viewership to more acceptable, if hefty, levels. Bell Media estimates it will have a 22.6 per cent share of French-language viewing, still well behind Quebecor’s 30.5 per cent share. In English-language viewing, however, Bell’s share would rise to 35.7 per cent, which falls at the low end of the the 35 to 45 per cent range where CRTC policy requires a detailed examination.
What is more, the $175-million in tangible benefits that Bell promises to the Canadian broadcasting system over the next seven years are not self-serving, unlike the $20-million the company initially wanted to use to launch its own French all-news TV service.
Also, Bell executives exhibited less arrogance when they appeared in front of the CRTC commissioners. And after being criticized for having pulled a rabbit out of their hat last time around, they refrained from last-minute surprises. That said, it remains to be seen how CRTC chairman Jean-Pierre Blais will consider George Cope’s take-it-or-leave-it stance, which the Bell president laid out flatly on Friday.
If the CRTC approval is almost a sure thing, given that Bell has responded to most of the concerns the CRTC expressed in its initial refusal, the real issue is under which conditions the broadcasting regulator will allow the merger to operate.
Some of the proposals that Bell’s competitors have put forward are so obviously self-serving that it is hard to take them seriously. Rogers Communications ended up admitting that it would like to buy The Movie Network, the pay-television service it hopes Bell will be forced to sell. And it is easy to understand why, with its operating profit of over $28-million on annual revenues of $139-million in 2011.
Quebecor will have a hard convincing the CRTC to prohibit Bell from acquiring a French-language conventional TV station – in this case it can only be V, owned by the Rémillard brothers – given all the media properties it owns in Québec.
But the CRTC might give some thought to introducing competition and possibly ending the monopoly that many of Astral’s specialty televisions still enjoy in their genres, as Quebecor suggested. Specialty television channels, which now account for almost half of all the television revenues in the country (45 per cent), boast the highest profit margins by far.
Mr. Blais asked some pointed question to Bell executives on the nearly 60-per-cent share of French-language specialty television revenues the merged and integrated company would have.
If it were any other CRTC chairman, you wouldn’t necessarily make much of these questions. But coming from the guy who stood up to Bell and shot down its merger proposal, it might well mean that Astral's coveted specialty television might lose some of its high-definition pizzaz.Report Typo/Error
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- Updated December 9 2:18 PM EST. Delayed by at least 15 minutes.