To hear Kevin Crull tell it, he had no idea he had such bitter enemies.
After all, when BCE Inc. announced last March that it would be plunking down $3.3-billion to buy Astral Media Inc., the only sound was applause: from analysts, who said the deal was another slam dunk by his boss, the company’s basketball-playing chief executive officer George Cope; and from shareholders, who saw Astral’s stock price leap almost 35 per cent in a day.
True, a handful of busybodies were off in a corner, moaning abstractly about the dark dynamics of market concentration, but nobody much seemed to be listening.
And then, a neon flare across the Astral plane: In the quiet of mid-August, some of Bell’s largest competitors pulled the pin on a noisy campaign aimed at killing the deal when it goes before the Canadian Radio-television and Telecommunications Commission for scrutiny early this month.
The deal would see Bell Media, of which Mr. Crull is president, own more than 100 radio stations and almost 90 TV channels. And it would give the company a hammerlock on distribution of programming that competitors fear would allow Bell to force them to pay exorbitant fees or lose their customers. Bell says it needs to bulk up to provide real competition among Canadian broadcasters and fend off increasingly savvy online challengers.
The merger’s fate rests in the hands of the broadcast regulator, which will spend the week of Sept. 10 cloistered in a Montreal boardroom hearing out all sides. It could let the deal go through unaltered, insist some changes be made, or kill it outright.
The hearings are critically important to the country’s broadcast industry, as they will establish the balance of power between broadcasters and TV distributors for years to come. By some measures, Bell’s proposal is without precedent in the industrialized world. Every other G8 country has prevented this sort of accumulation of power, something its competitors have seized upon in their bid to see the deal killed.
Calling themselves The Say No to Bell Coalition, the cable companies Cogeco and Eastlink, together with the print/cable/broadcaster Quebecor, have flooded the country with newspaper ads and television commercials warning that Canadians could end up being forced to buy certain TV channels from Bell even if they didn’t want them.
Through the attacks, Mr. Crull, the executive charged with fulfilling his boss’s vision, has held his tongue.
Until this week.
“There’s a level of misleading information and a tone of the debate that I am surprised by,” he says on Thursday afternoon in the old CITY-TV building on Toronto’s Queen Street West. “It’s a very, very offensive attack, in my mind, to use words like, ‘Bell’s behaviour,’ ‘anti-competitive activity,’ and things of that sort.”
Consumers who are caught in the middle can be forgiven if they can’t figure out whether the deal is in their best interest or not – the two sides don’t even agree on how to measure the size of the broadcast market, never mind their individual share of it.
Measurements matter: The CRTC has said it would closely scrutinize any deal that sees one company control 35 per cent of the country’s market, and would outright kill any arrangement that would push that number above 45 per cent.
But the debate is making the picture fuzzy. Should the math include all TV signals, or just the ones controlled by Canadian broadcasters? Do they throw the CBC-SRC into the mix – as Bell suggests – in which case Canada has five, not four, major broadcasters and therefore becomes an also-ran behind the public broadcaster-dominated United Kingdom, Germany and France in the damning market concentration charts?
But put all of that aside for the moment, because some things are indisputable.
“This is a huge merger from anybody’s standpoint, in any country,” says Robert Picard, a professor with the University of Oxford’s Reuters Institute for the Study of Journalism who specializes in media economics.