ARCHIVED - Decision CRTC 2001-645

Decision CRTC 2001-645

Ottawa, 11 October 2001

Bell Globemedia Publishing Inc.
Across Canada 2001-0571-9, 2001-0610-6, 2001-0611-3, 2001-0612-1

10 September 2001 Public Hearing
National Capital Region

Ownership Change for ROBTv

The Commission approves the applications noted above by Bell Globemedia Publishing Inc. (Bell Globemedia Publishing). Approval of these applications will allow the applicant to acquire, via a multi-step transaction, control of Report on Business Television, general partnership (ROBTv partnership), licensee of ROBTv, a national English language programming undertaking.

The multi-step transaction can be summarized as follows:

· Step 1 (application 2001-0571-9) - Bell Globemedia Publishing will acquire G and M Business News Holdings Limited's (G and M Holdings) 50% partnership interest in ROBTv.

The Commission notes that, in Decision CRTC 2001-483, it approved an application by G and M Holdings to acquire a 50% partnership interest in ROBTv. This interest had been beneficially owned by Global Communications Limited and was, at the time of the decision, under a trust arrangement.

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· Step 2 (application 2001-0610-6) - Transfer of all the issued and outstanding shares of G and M Business News Limited (G and M Business) held by Mr. Kenneth Thomson to Bell Globemedia Publishing (transfer of control). G and M Business is the other general partner in the ROBTv general partnership, holding a 50% partnership interest.

· Step 3 (applications 2001-0611-3 and 2001-0612-1) - Transfer of the following to CTV Television Inc. (CTV Television):

a) Bell Globemedia Publishing's 50% partnership interest in ROBTv (transfer of assets); and,

b) Bell Globemedia Publishing's 100% voting interest in G and M Business (which includes G and M Business' 50% partnership interest in ROBTv) (transfer of control).

The end result of this multi-step transaction is that ROBTv will continue to operate under a general partnership arrangement with G and M Business and CTV Television as general partners, each with a 50% partnership interest. The effective control of ROBTv will now rest with Bell Globemedia Inc.

Upon surrender of the current licence, the Commission will issue a new licence to the general partners CTV Television and G and M Business to continue the operation of the specialty service undertaking known as ROBTv. The new licence will be subject to the terms and conditions set out in the appendix to this decision.

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Benefits

Value of the transaction for determining benefits

The Commission generally expects applicants proposing to acquire specialty television undertakings to make commitments to clear and unequivocal tangible benefits representing a financial contribution of 10% of the value of the transaction, as accepted by the Commission.

When G and M holdings acquired CanWest Global's 50% partnership interest in ROBTv (Decision 2001-483), the value of the transaction accepted by the Commission was $30 million dollars. G and M holdings therefore proposed a benefits package of approximately $3 million dollars to be spent over a five-year period. As part of the current application, Bell Globemedia Publishing indicated that CTV Television would assume responsibility for the $3 million in benefits accepted in the transaction approved in Decision 2001-483.

As well, since as a result of the current transaction, CTV Television will own (directly and indirectly) 100% of the partnership interest in ROBTV, it proposed additional benefits for the other half of the value of ROBTv ($30 million). These additional benefits have a value of approximately $3 million, to be spent over five years.

The applicant did not, however, consider that it should be obligated to pay additional benefits on the 50% partnership interest formerly held by G and M Holdings. It noted that G and M Holdings proposed to hold its interest in ROBTv only on a temporary basis, pursuant to the Purchase Agreement concluded between CanWest Global and Thomson Canada Limited. Bell Globemedia Publishing therefore considered that requiring it to pay benefits on the 50% of the interest for which G and M Holdings had already made benefits commitments would be inappropriate and unfair.

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In the context of the current transaction, the Commission accepts Bell Globemedia's position on this matter. Consequently CTV Television will not be required to spend an additional $3 million in benefits for the portion of the ROBTv partnership that it will acquire from G and M Holdings.

Description of benefits that CTV Television will assume from G and M Holdings

The licensee will spend $2.5 million over five years to develop and broadcast western Canadian business programming on ROBTv. This programming, to be developed in Calgary, will provide a western perspective on business issues to a national audience.

As well, the licensee will donate $500,000 over five years to the School of Policy Studies at Queen's University. This money will be used to upgrade the school's public opinion archive so that it can be readily searched by television journalists and documentary makers.

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CTV Television's proposed benefits

The licensee will spend $1.5 million over five years to enhance ROBTv's access to business information and reporting from Europe.

Further CTV Television will donate $1.5 million over five years to York University. These funds will be use to create and endow a professorship in broadcast management.

Other matters

The Commission notes that this licensee is subject to the Employment Equity Act and therefore files reports concerning employment equity with Human Resources Development Canada.

The Commission acknowledges the interventions submitted in support of this application.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix to Decision CRTC 2001-645

Terms of licence for the national English-language programming undertaking (specialty television service) known as Report on Business Television (ROBTv)

Upon surrender of the current licence, the Commission will issue a new licence to the general partners CTV Television Inc. and G and M Business News Limited, expiring 31 August 2003 (the current expiry date).

Conditions of licence

The licence will be subject to the conditions set out below and to any other condition specified in the licence to be issued.

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1. The licensee shall provide a national English-language specialty service consisting of business and financial news and information, and shall draw programs exclusively from Categories 1 (News), 2(a) (Analysis and interpretation), 2(b) (Long form documentary), 3 (Reporting and actualities), 5(b) (Informal education/recreation and leisure), 12 (Interstitials), 13 (Public service announcements), and 14 (Infomercials, promotional and corporate videos) as set out in item 6 of Schedule I of the Specialty Services Regulations, 1990, and as defined in Public Notice CRTC 2000-92 as amended from time to time.

2. The licensee shall devote to the distribution of Canadian programs not less than 75% of each broadcast day and not less than 75% of the evening broadcast period.

3. In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notices CRTC 1992-28, 1993-93 and 1993-174:

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a) In the broadcast year following the first year of operation, and in each subsequent broadcast year, the licensee shall expend on Canadian programs not less than 50% of the previous broadcast year's gross revenues derived from the operation of this service.

b) In the broadcast year following the first year of operation, and in each subsequent broadcast year, excluding the final year, the licensee may expend an amount on Canadian programs that is up to five percent (5%) less than the minimum required expenditure for that year calculated in accordance with this condition; in such case, the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure.

c) In the broadcast year following the first year of operation, and in each subsequent broadcast year where the licensee expends an amount on Canadian programs that is greater than the minimum required expenditure for that year calculated in accordance with this condition, the licensee may deduct:

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(i) from the minimum required expenditure for the next broadcast year of the licence term, an amount not exceeding the amount of the previous broadcast year's overexpenditure; and

(ii) from the minimum required expenditure for any subsequent broadcast year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under (i) above.

d) Notwithstanding the above, during the licence term, the licensee shall expend on Canadian programs, at a minimum, the total of the minimum required expenditures calculated in accordance with the licensee's condition of licence.

4. a) Subject to subsection (b), the licensee shall not distribute more than twelve (12) minutes of advertising material during each clock hour.

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b) In addition to the twelve minutes of advertising material referred to in subsection (a) the licensee may distribute during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.

c) The licensee shall not distribute any paid advertising material other than national paid advertising.

5. From the commencement of service, the licensee shall charge each exhibitor of this service a maximum wholesale rate of $0.25 per subscriber per month, where the service is distributed as part of the basic service.

6. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB's) Sex role portrayal code for television and radio programming, as amended from time to time and approved by the Commission.

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7. The licensee shall adhere to the provisions of the CAB's Broadcast code for advertising to children, as amended from time to time and approved by the Commission.

8. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's Voluntary code regarding violence in television programming, as amended from time to time and approved by the Commission.

For the purpose of these conditions of licence, the terms broadcast day, broadcast year, evening broadcast period and clock hour shall have the same meaning as those set out in the Television Broadcasting Regulations, 1987; first year of operation shall mean the first broadcast year in which the licensee is in operation for a period exceeding 90 days, excluding any free trial period; and paid national advertising shall mean advertising material as defined in the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.