|
Decision
|
|
Ottawa, 7 March 1988
|
|
Decision CRTC 88-136
|
|
Premier Choix: TVEC Inc.
|
|
Montreal, Quebec - 880283700 - 880284500
|
|
Pursuant to Public Notice CRTC 1988-21 dated 12 February 1988, the Commission approves the application by Premier Choix: TVEC Inc. (PC: TVEC), licensee of a French-language pay television network (Super Écran) and of a specialty network service (Le Canal Famille), for authorization to transfer to 129610 Canada Inc. (129610), a shareholder in PC:TVEC and a wholly-owned subsidiary of First Choice Canadian Communications Corporation (First Choice), an irrevocable option to acquire 785,454 Class "B" voting shares from the licensee's capital stock pursuant to a 7 October 1987 agreement. This option is presently held by Quebec's Société de développement des industries de la culture et des communications (SODICC), pursuant to a loan agreement dated 23 May 1984, as amended on 4 November 1985.
|
|
The Commission notes that approval of this transaction will ultimately result in 129610 having effective control of PC:TVEC at such time as it decides to exercise the option acquired from SODICC, thus increasing its equity in PC:TVEC to approximately 51.07% of the voting shares of the company. For its part, SODICC would continue to hold 216,546 Class "B" common shares which represents 6.19% of the shares of PC:TVEC, and as long as it has at least 150,000 Class "B" shares it will continue to have representatives on the PC:TVEC Board of Directors.
|
The Commission notes that the consolidation of the two French-language pay television undertakings operated by First Choice and Télévision de l'Est du Canada (TVEC) Inc. respectively into a single new company (PC:TVEC) was authorized by Decision CRTC 84-32 dated 24 January 1984. In response to the Commission's concern that the ongoing provision of a viable French-language pay television service be assured, First Choice had undertaken to provide significant support to the new company "by all reasonable means", including marketing assistance, the co-operative investment in the acquisition of programs and additional funding of the service. Consequently, the Commission, in the same Decision, approved an application by First Choice to amend one of the conditions of licence for its national English-language pay television network so that it read:
|
|
The licensee shall invest in and support through all reasonable means the operations and undertaking of the Frenchlanguage program service licensed to "Premier Choix: TVEC".
|
In Decision CRTC 84-32, the Commission also addressed the involvement of SODICC stating that its specific purpose is to assist "through the provision of loans or loan guarantees, the creation and development of provincially-based cultural industries, including undertakings in the fields of radio, television and cable distribution". The financial involvement of SODICC is normally available for the short- or medium-term depending upon the particular circumstances of the companies involved. The Commission notes that the decreasing involvement of SODICC that will result with approval of the present application was envisaged by PC:TVEC's plans as set out in its initial application, the 1983 and 1984 protocols and the 1984 and 1985 shareholders' agreements.
|
In presenting its arguments in support of the present application, PC:TVEC stated that the transaction would provide it with an even more concrete means of pursuing the objectives outlined in Decision CRTC 84-32. In this respect, it emphasized that 129610, which as previously noted is a wholly-owned subsidiary of First Choice, already exercises considerable influence over PC:TVEC in that it holds the largest block of common shares. It also pointed out that the number of subscribers has been constantly increasing since 129610 and/or First Choice became involved in PC:TVEC and has more than doubled since 1984. The applicant added that this agreement would consolidate the financial situation of PC:TVEC on a permanent basis by ensuring the long-term financial support and highly valued professional expertise of a sound business corporation such as First Choice. It will also enable PC:TVEC to draw on even greater benefits from the synergy of the two pay television undertakings.
|
|
Further, PC:TVEC noted in its application that in accordance with the agreement reached on October 7, 1987 between 129610 and SODICC which is the subject of this decision, the licensee's Board of Directors will still be comprised of Quebec residents and the provisions regarding programming and representation on various committees will for all intents and purposes remain largely unchanged. In outlining the benefits of the transaction, the applicant emphasized the advantages which will accrue as a result of anticipated joint productions, marketing and future investment from the general public through a public offering. The Commission notes that the 25.7% of the voting shares of PC:TVEC currently held by members of the general public will not be affected by this decision.
|
For these reasons, the Commission considers that approval of this application is in the public interest, and consistent with PC:TVEC's original application, the provisions of Decision CRTC 84-32, and the condition attached to First Choice's licence. It also considers that the transaction approved herein will enable an important component of the Canadian broadcasting system to consolidate its position while continuing to offer a pay television service reflecting the cultural distinctiveness of francophone Canadians.
|
|
Fernand Bélisle
Secretary General
|
|
|
|