ARCHIVED - Broadcasting Notice of Consultation CRTC 2010-498

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Additional reference: 2010-498-1, 2010-498-2, 2010-498-3 and 2010-498-4

Ottawa, 22 July 2010

Notice of hearing

20 September 2010
Location to be determined
Deadline for submission of interventions/comments: 23 August 2010

The Commission will hold a hearing commencing 20 September 2010 at a location to be determined at a later date, commencing immediately following the hearing for the applications referenced in Broadcasting Notice of Consultation CRTC 2010-497.

[Broadcasting interventions/comments form]

Applicant and Locality

1.      CanWest Global Communications Corp.
Across Canada
Application No. 2010-0854-0

2.      Shaw Communications Inc.
Across Canada
Application No. 2010-0550-5

1.      Across Canada
Application No. 2010-0854-0

Application by CanWest Global Communications Corp. (Canwest Global), on behalf of Canwest Television GP Inc. (Canwest GP) (the general partner) and Newco (the limited partner) in a limited partnership that will carry on business as Canwest Television Limited Partnership (CTLP), and on behalf of the licensees of Fox Sports World Canada, MenTV, Mystery and TVtropolis, for authority to acquire, as part of a multi-step corporate reorganization, the assets of the television broadcasting undertakings and specialty services currently indirectly held by Canwest Global.

The applicant also requests new licences to continue the operation of the undertakings under the same terms and conditions as those in effect under the current licences.

The proposed transaction is for corporate reorganization purposes within Canwest Global as well as within certain of its subsidiaries, and would not affect the effective control of any of the regulated broadcasting undertakings.

As contemplated in the Plan of Compromise and Arrangement of the Canwest entities pursuant to the Companies’ Creditors Arrangement Act (Canada) (CCAA), the present corporate reorganization involves a change of ownership within CTLP and would result in the issuance of new broadcasting licences.

The proposed steps of the said reorganization are as follows (see Appendix 1):

1.      Canwest Media Inc. (CMI) would liquidate and dissolve 4501063 Canada Inc. (4501063 Canada), a wholly-owned subsidiary of CMI and currently parent corporation of (Canwest GP. Following the dissolution of 4501063 Canada, Canwest GP would become a wholly-owned subsidiary of CMI.

2.      CMI would transfer all its partnership interest in CTLP to Newco, a newly-created corporation that would be a wholly-owned subsidiary of CMI.

3.      CMI would transfer to Newco all of its shares (which represent a 100% voting interest) in the capital of Canwest GP.

4.      Canwest GP would continue to own its 0.1% partnership interest in CTLP.

5.      Following the transfer by CMI of its partnership interest in CTLP to Newco, all of the assets and property currently held by CMI for and on behalf of CTLP would be transferred to Newco. Newco would have, indirectly through its 99.9% partnership interest in CTLP, ownership of the following:

• the broadcasting undertakings’ assets;
• 100 common shares of Canwest Global Broadcasting Inc.;
• 1,000 units of TVtropolis General Partnership (66.67%);
• 490,000 units of Men TV General Partnership (49%);
• 50 units of Mystery Partnership (50%);
• 1 common share of Fox Sports World Canada Holdco Inc.; and
• 99.9% partnership interest in Fox Sports World Canada Partnership.

Applicant’s address:

121 Bloor Street East
Suite 1500
Toronto, Ontario
M4W 3M5
Fax: 416-386-2779
E-mail: cbell@canwest.com

Examination of application:

At the applicant’s address

2.      Across Canada
Application No. 2010-0550-5

Application by Shaw Communications Inc. (Shaw), on behalf of CanWest Global Communications Corp. (Canwest Global) and its operating subsidiaries/licensees, for authority to transfer the effective control of Canwest Global’s broadcasting entities to Shaw, through a wholly-owned subsidiary of Shaw known as 7316712 Canada Inc. (7316712 Canada).

On 6 October 2009, Canwest Global, along with its operating subsidiary Canwest Media Inc. (CMI) and certain other subsidiaries, filed for creditor protection under the Companies’ Creditors Arrangement Act (Canada) (CCAA).

At the beginning of November 2009, Canwest Global, with the assistance of RBC Capital Markets, commenced an equity solicitation process to identify potential new Canadian investors.

On 19 February 2010, after arm’s length negotiations between Shaw, Canwest Global and the Ad Hoc Committee (comprised of holders of over 70% of the 8% senior subordinated notes issued by CMI due 2012), Canwest Global’s board approved Shaw’s offer.

On 31 March 2010, Shaw filed an application for approval of its acquisition of effective control of the conventional and specialty television undertakings indirectly owned by Canwest Global.  Under that original offer, Shaw was to subscribe for Class A Voting shares representing a 20% equity and 80% voting interest in Restructured Canwest for a minimum $95 million in the aggregate.

On 3 May 2010, Shaw acquired from Goldman Sachs & Co. affiliates (Goldman Sachs entities) 29.9% of the voting shares and 49.9% of the common non-voting shares in the capital of CW Investments Co. (CWI). The Commission notes that this transaction was subject to the notification requirement pursuant to the Commission’s regulations.

On 4 May 2010, Shaw advised the Commission that, pursuant to an amendment to the 31 March 2010 application, Shaw’s indirect equity interest would be 100% of Restructured Canwest. Shaw also advised that, in addition to acquiring the shares of CWI indirectly held by Canwest Global it would acquire, by way of an option, the remaining shares, held by Goldman Sachs entities in the capital of CWI, immediately following Commission approval of the application.

On 18 May 2010, Canwest Global filed an application (2010-0854-0) for authority to effect a multi-step corporate reorganization for restructuring purposes as contemplated in the document entitled “Plan of Compromise, Arrangement and Reorganization” of the Canwest entities pursuant to the CCAA and resulting in the issuance of new broadcasting licences. This application is also being considered at this public hearing.

Finally, on 23 June 2010, the consolidated “Plan of Compromise, Arrangement and Reorganization” pursuant to the CCAA and the Canadian Business Corporations Act was filed with the Ontario Superior Court of Justice.

Following the proposed transaction, Shaw, through its wholly-owned subsidiary 7316712 Canada, would become the sole owner of Restructured Canwest and of CWI, and would acquire control of all broadcasting undertakings currently controlled by Canwest Global (see Appendix 2).

Shaw has ascribed a total value for the acquisition of all broadcasting assets owned by Canwest Global of $2.005 billion and has proposed a tangible benefits package in the amount of $23 million.

Considering the size and scope of the proposed transaction, the Commission may discuss, among other things, the following:

Ownership

In the context of the proposed consolidation involving two major broadcasters, the Commission may wish to discuss the potential impact on the television market (i.e., market power that Shaw could enjoy and the potential to adopt anti-competitive behaviour), and may examine various related ownership issues.

Value of the transaction and the proposed benefits package

The Commission may wish to discuss the value of the transaction applied to the assets and how these values have been allocated between the broadcasting undertakings.

The Commission may also wish to discuss the proposed benefits package in terms of incrementality, acceptability, and proposals in respect of any benefits that may be found to be unacceptable to the Commission. The Commission, in applying its benefits test, has been consistent and rigorous in requiring that (1) expenditures proposed as tangible benefits be truly incremental; (2) such expenditures be directed to projects and initiatives that would not be undertaken or realized in the absence of the transaction; and (3) as generally required, applicants demonstrate that expenditures proposed as tangible benefits flow predominantly to third parties, such as independent producers.

Additional information may be placed on the public examination file as it becomes available. The Commission encourages interested parties to monitor the public examination file and the Commission’s website for additional information that they may find useful when preparing their comments.

Applicant’s address:

Shaw Communications Inc., on behalf of
CanWest Global Communications Corp.
630 – 3^rd Avenue South West
Suite 900
Calgary, Alberta
T4P 1L4
Fax: 403-716-6544
E-mail: Cynthia.rathwell@shawdirect.ca

Examination of application:

40 Elgin Street
Suite 1400
Ottawa, Ontario

181 Bay Street
Suite 4210
Toronto, Ontario

630 – 3^rd Avenue South West
Suite 900
Calgary, Alberta

1067 West Cordova Street
Suite 900
Vancouver, British Columbia

Public participation

Deadline for interventions

23 August 2010

The intervention must be received by the Commission and by the applicant on or before the above-mentioned date. The Commission cannot be held responsible for postal delays and will not notify a party whose intervention is received after the deadline date. The intervention will not be considered by the Commission and will not be part of the public file.

The intervention must include one of the following statements in either the first or the last paragraph:

1. I request to appear at the public hearing.
2. I do not want to appear at the public hearing.

Interventions will be considered by the Commission and will form part of the public record of the proceeding without further notification to intervening parties, provided the procedure set out below has been followed. Parties will be contacted only if their submissions raise procedural questions.

Written interventions should be submitted to the Secretary General of the Commission in only one of the following formats:

by using the
[Broadcasting interventions/comments form]

or

by mail to
CRTC, Ottawa, Ontario K1A 0N2

or

by fax at
819-994-0218

A true copy must be sent to the applicant, and proof that this has been done must accompany the intervention sent to the Commission.

The Commission advises those who file and serve by electronic mode to exercise caution when using e-mail for service of documents or notification, as it may be difficult to establish that service has occurred.

Parties must ensure that, before initiating service through electronic mode, they will be able to satisfy the Commission, upon request, that service of the notification was completed.

Submissions longer than five pages should include a summary.

Each paragraph of the submission should be numbered. In addition, where the intervention is filed by electronic means, the line ***End of document*** should be entered following the last paragraph of the document, as an indication that the document has not been damaged during electronic transmission.

Interventions should clearly identify the application referred to and indicate whether parties support or oppose the application, or, if they propose changes to it, include the facts and grounds for their proposal.

In the event that the application is brought to the oral phase of the hearing, and if parties wish to appear, they must provide reasons why their written interventions are not sufficient and why an appearance is necessary.

Parties may participate from the Commission’s regional offices via videoconferencing. Parties interested in doing so are asked to indicate the regional office where they wish to appear at the time they file their comments. A list of the Commission’s regional offices is included in this notice.

Persons requiring communications support such as assistance listening devices and sign language interpretation are requested to inform the Commission at least twenty (20) days before the commencement of the public hearing so that the necessary arrangements can be made.

Important notice

All information that parties provide as part of this public process, except information granted confidentiality, whether sent by postal mail, facsimile, e-mail or through the Commission’s website at www.crtc.gc.ca, becomes part of a publicly accessible file and will be posted on the Commission’s website. This information includes personal information, such as full names, e-mail addresses, postal/street addresses, telephone and facsimile numbers, and any other personal information parties provide.

The personal information that parties provide will be used and may be disclosed for the purpose for which the information was obtained or compiled by the Commission, or for a use consistent with that purpose.

Documents received electronically or otherwise will be put on the Commission’s website in their entirety exactly as received, including any personal information contained therein, in the official language and format in which they are received. Documents not received electronically will be available in PDF format.

The information that parties provide to the Commission as part of this public process is entered into an unsearchable database dedicated to this specific public process. This database is accessible only from the web page of this particular public process. As a result, a general search of the Commission’s website with the help of either its own search engine or a third-party search engine will not provide access to the information that was provided as part of this public process.

The Commission encourages interested parties to monitor the public examination file and the Commission’s website for additional information that they may find useful when preparing their interventions.

Examination of documents

An electronic version of the applications is available from the Commission’s website by selecting the application number within this notice.

A list of all interventions will also be available on the Commission’s website. An electronic version of all interventions submitted will be accessible from this list. To access the list, select “Lists of interventions/comments” under “Public Proceedings” from the Commission’s website.

Documents are also available during normal office hours at the local address provided in this notice and at the Commission offices and documentation centres directly involved with these applications, or, upon request, within two (2) working days, at any other Commission offices and documentation centres.

Location of Commission offices

Toll-free telephone: 1-877-249-2782
Toll-free TDD: 1-877-909-2782

Les Terrasses de la Chaudière
Central Building
1 Promenade du Portage, Room 206
Gatineau, Quebec
J8X 4B1
Tel.: 819-997-2429
Fax: 819-994-0218

Regional offices

Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia
B3A 4S5
Tel.: 902-426-7997
Fax: 902-426-2721

205 Viger Avenue West
Suite 504
Montréal, Quebec
H2Z 1G2
Tel.: 514-283-6607

55 St. Clair Avenue East
Suite 624
Toronto, Ontario
M4T 1M2
Tel.: 416-952-9096

Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba
R3B 2B3
Tel.: 204-983-6306
Fax: 204-983-6317

2220 – 12^th Avenue
Suite 620
Regina, Saskatchewan
S4P 0M8
Tel.: 306-780-3422

10405 Jasper Avenue
Suite 520
Edmonton, Alberta
T5J 3N4
Tel.: 780-495-3224

580 Hornby Street
Suite 530
Vancouver, British Columbia
V6C 3B6
Tel.: 604-666-2111
Fax: 604-666-8322

Secretary General