ARCHIVED - Broadcasting Decision CRTC 2002-465

Broadcasting Decision CRTC 2002-465

Ottawa, 20 December 2002

Food Network Canada Inc.
Across Canada

Application 2002-0727-6

Corus Entertainment Inc.'s voting interest in Food Network Canada Inc.

1.

The Commission received an application by Food Network Canada Inc. (Food Network), requesting authority to increase the voting interest of Corus Entertainment Inc. (Corus) in Food Network.

2.

Food Network is the licensee of a national specialty television programming service known as Food Network Canada, which provides information and entertainment related to food and nutrition. Corus is a diversified entertainment company in radio, television and specialty television, and is affiliated with Shaw Communications Inc., the parent company of the second-largest cable distributor in Canada.

3.

In New specialty television service "Food Network Canada" replaces the U.S. service "TV Food Network", Decision CRTC 2000-217, 4 July 2000 (Decision 2000-217), the Commission noted that the ownership structure of the new service would be subject to a Letter of Agreement (the letter) dated 5 August 1999. The letter set out the equity position of the shareholders in a company to be incorporated (now Food Network). According to the letter, Corus would own 10% of the voting interest in the licensee company. Also according to the letter, any increase in Corus' voting interest would be subject to Commission approval.

4.

At the time of the approval granted in Decision 2000-217, the Commission's policies and regulations restricted cable-affiliated ownership in any analog pay or specialty programming service to no more than 10% of the voting interest of such a licensee. Based on those policies and regulations, and upon the letter, the Commission imposed the following condition of licence:

In addition to the requirements set out in section 10 of the Specialty Services Regulations, 1990, the licensee shall obtain the prior approval of the Commission in respect of any act, agreement or transaction that directly or indirectly would result in Corus Entertainment Inc., by itself or with an affiliate, owning or controlling more than 10% of the voting shares of the licensee. For the purposes of this condition, "affiliate" means a person who controls Corus, or who is controlled by Corus or by a person who controls Corus.

5.

In Amendments to the Specialty Services Regulations, 1990 and the Pay Television Regulations, 1990 - Ownership of discretionary services - Requirements for prior approval, Broadcasting Public Notice CRTC 2002-24, 9 May 2002, (Public Notice 2002-24), the Commission amended its regulations to remove the restriction on cable ownership of analog pay or specialty programming services.

6.

In light of the above-noted change, the Commission approves the application to increase the voting interest held by Corus in Food Network, beyond the 10% limit imposed by condition of licence. As a result of this approval, Corus' holdings will increase from 10,000 Common shares, representing 10% of Food Network's voting interest, to 27,529 Common shares, representing 22.59% of the licensee's voting interest.

7.

This transaction will not alter the effective control of Food Network, since Alliance Atlantis Communications Inc. will continue to control the licensee through its subsidiary Alliance Atlantis Broadcasting Inc., which holds 57.61% of the voting interest in Food Network. The authorized ownership of Food Network is as set out in the Appendix to this decision.

8.

Concurrent with this application, Food Network requested the deletion of the condition of licence restricting Corus' holdings in Food Network to a maximum of 10% of the voting interest. This request will be processed separately, as set out in Broadcasting Public Notice CRTC 2002-79, issued today.

Secretary General

Appendix to Decision CRTC 2002-465