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Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT/SUJET:
THE BROADCASTING APPLICATION BY ROGERS MEDIA INC.,
ON BEHALF OF 1708487 ONTARIO INC., 1738700 ONTARIO INC.
AND CHUM TELEVISION VANCOUVER INC. /
LA DEMANDE EN RADIODIFFUSION PRÉSENTÉE PAR ROGERS MEDIA INC.,
AU NOM DE 1708487 ONTARIO INC., 1738700 ONTARIO INC.
ET CHUM TELEVISION VANCOUVER INC.
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
August 29, 2007 Le 29 août 2007
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
THE BROADCASTING APPLICATION BY ROGERS MEDIA INC.,
ON BEHALF OF 1708487 ONTARIO INC., 1738700 ONTARIO INC.
AND CHUM TELEVISION VANCOUVER INC. /
LA DEMANDE EN RADIODIFFUSION PRÉSENTÉE PAR ROGERS MEDIA INC.,
AU NOM DE 1708487 ONTARIO INC., 1738700 ONTARIO INC.
ET CHUM TELEVISION VANCOUVER INC.
BEFORE / DEVANT:
Konrad von Finckenstein Chairperson / Président
Rita Cugini Commissioner / Conseillère
Helen del Val Commissioner / Conseillère
Elizabeth Duncan Commissioner / Conseillère
Stuart Langford Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secrétaire
Stephen Millington Legal Counsel /
Conseiller juridique
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
August 29, 2007 Le 29 août 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Rogers Media Inc. 3 / 25
PHASE II
INTERVENTION BY / INTERVENTION PAR:
Canadian Ethnocultural Council 156 / 972
Multicultural History Society of Ontario 164 / 1013
Brightlight Pictures Inc. 174 / 1075
David Brady Productions 181 / 1110
Stephen Hawkins 196 / 1171
Communications, Energy and Paperworkers 208 / 1244
Union of Canada
Canadian Association of Film Distributors 219 / 1309
and Exporters
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Wednesday August 29, 2007
at 0930 / L'audience débute le mercredi
29 août 2007 à 0930
LISTNUM 1 \l 11 THE CHAIRPERSON: Good morning, everybody.
LISTNUM 1 \l 12 Would you please take your seats?
LISTNUM 1 \l 13 This is a follow‑up to the hearing that we had on Citytv. The panel is the same in that it is made up of commissioners, starting from right to left, Langford, del Val, von Finckenstein, Cugini and Duncan.
LISTNUM 1 \l 14 The Commission today is assisted by Lyne Renaud as hearing officer, Stephen Millington as legal counsel and Jade Roy as hearing secretary.
LISTNUM 1 \l 15 We are obviously going to examine the acquisition by Rogers of the Citytv network.
LISTNUM 1 \l 16 Madame Jade Roy, I believe you have some introductory remarks to make.
LISTNUM 1 \l 17 THE SECRETARY: Thank you, Mr. Chair.
LISTNUM 1 \l 18 Nous aimerions souligner quelques points d'ordre pratique qui contribueront au bon déroulement de cette audience publique.
LISTNUM 1 \l 19 Firstly, simultaneous interpretation service is available during the hearing. Receivers are available from the commissionaire outside the hearing room.
LISTNUM 1 \l 110 The English interpretation is on channel seven, and French is on channel eight.
LISTNUM 1 \l 111 When you are in the hearing room, we would ask you to please turn off your cell phones, beepers and blackberries, as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators.
LISTNUM 1 \l 112 We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 113 Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen, qui se trouve dans la salle Papineau, située à l'extérieur de la salle d'audience, à votre droite.
LISTNUM 1 \l 114 For the record, the Commission sent a letter to Rogers asking them to be prepared to provide comments at today's proceeding on the Canadian Television Fund Task Report dated June 29, 2007, and Rogers submitted yesterday the purchase agreement between CTVGlobeMedia and Rogers Broadcasting Limited.
LISTNUM 1 \l 115 Stephen?
LISTNUM 1 \l 116 MR. MILLINGTON: When that document was submitted, there was a claim for confidentiality. I understand that is no longer required and I would just like to get confirmation on the record that, that is the case.
LISTNUM 1 \l 117 MR. STRATI: That is correct.
LISTNUM 1 \l 118 MR. MILLINGTON: Thank you.
LISTNUM 1 \l 119 THE SECRETARY: This letter, and the document, has been placed on the public file, and copies are available in the examination room.
LISTNUM 1 \l 120 And now, Mr. Chairman, we will proceed with the application filed by Rogers Media.
LISTNUM 1 \l 121 Appearing for the applicant is Tony Viner, who will introduce his colleagues.
LISTNUM 1 \l 122 You will then have 20 minutes to make your presentation.
LISTNUM 1 \l 123 Thank you.
LISTNUM 1 \l 124 THE CHAIRPERSON: Mister Viner, welcome.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 125 MR. VINER: Thank you, Sir.
LISTNUM 1 \l 126 Mr. Chair and members of the Commission, I am Tony Viner, President of Rogers Media.
LISTNUM 1 \l 127 It is a pleasure to be here this morning to present our application for the acquisition of the Citytv stations in Toronto, Winnipeg, Calgary, Edmonton and Vancouver.
LISTNUM 1 \l 128 Before we begin our presentation, I would like to first briefly introduce our panel.
LISTNUM 1 \l 129 To my immediate left is Rael Merson, President of Rogers Broadcasting. Rael and I will share the responsibility of leading the presentation, and responding to your questions.
LISTNUM 1 \l 130 To my right are Leslie Sole and Diane Boehme, available for programming and Canadian production issues at both City and OMNI stations.
LISTNUM 1 \l 131 To Rael's left is Alain Strati, our regulatory counsel.
LISTNUM 1 \l 132 Next to him is Madeline Ziniak, available for further insight about OMNI and cultural diversity, and then, Renato Zane and Stephen Hurlbut, responsible for news at ONMI and City, respectively.
LISTNUM 1 \l 133 In the row directly behind me, starting from my far left, is Malcolm Dunlop, programming, sales and audience research, as well as Melanie Farrell and Andrea Gagliardi, who can provide insight about marketing, public relations and community outreach.
LISTNUM 1 \l 134 Finally, we have Al Thorgierson and Brad Phillips, general managers for the Citytv stations in Western Canada.
LISTNUM 1 \l 135 Also in the audience is Mr. John McKellar, the trustee of the City stations.
LISTNUM 1 \l 136 Other members of the City and OMNI management teams are also here in the front row of the audience, available to answer questions, if required.
LISTNUM 1 \l 137 Rael ?
LISTNUM 1 \l 138 MR. MERSON: Good morning.
LISTNUM 1 \l 139 Our presentation this morning will consist of three parts.
LISTNUM 1 \l 140 I will briefly outline the rationale for our acquisition of the Citytv stations, and our vision for their future.
LISTNUM 1 \l 141 Leslie will then describe our overall programming strategy for these stations.
LISTNUM 1 \l 142 And Tony will conclude by addressing the regulatory and policy issues identified in the Notice of Public Hearing.
LISTNUM 1 \l 143 So why are we interested in Citytv, in an environment that has seen over‑the‑air television lose market share, and face real declines in profitability, one in which IPTV is looming, commercial skipping is a reality and the threat of disintermediation is very real, as studios begin selling their content directly to consumers, bypassing the broadcast system in its entirety?
LISTNUM 1 \l 144 We made the decision to first buy the A channels, and then Citytv, because of our fundamental belief that only free over‑the‑air television can draw the mass audiences that are necessary to support the production of the highest quality programming.
LISTNUM 1 \l 145 We recognize that over‑the‑air television will have to take on increasing risk in order to continue to add value, and to protect its position in the value chain that brings content to audiences. We believe that will take scale and investment, from large, committed Canadian players, to ensure that the system is not bypassed in its entirety.
LISTNUM 1 \l 146 Rogers is exactly that kind of long‑term investor. We have achieved success with other broadcast properties that needed commitment, ingenuity and patience.
LISTNUM 1 \l 147 CFMT, 680 News and the Shopping Channel are all examples of that philosophy.
LISTNUM 1 \l 148 And there is a natural fit between City and OMNI, and between City and Rogers.
LISTNUM 1 \l 149 City reflects the multicultural reality of our urban centres, while OMNI reflects the ethnocultural identity of new and existing ethnic communities in Canada.
LISTNUM 1 \l 150 City has produced new innovative programs that laid the foundation for the launch of a number of successful specialty services.
LISTNUM 1 \l 151 Rogers' very DNA is innovation, whether it be ethnic programming, FM radio, cable distribution, wireless communications or the marketing of those services.
LISTNUM 1 \l 152 The business of Citytv is, however, under threat. Faced with audience fragmentation and tough competition from other broadcasters, City has seen its revenue and profitability decline over the last couple of years, to the point where the stations are now losing money.
LISTNUM 1 \l 153 In this broadcast year, City is projecting operating losses of almost three million dollars, and preliminary budgets for 2008 are for higher operating losses.
LISTNUM 1 \l 154 We recognize that we need a new strategy for Citytv, one that will build upon its legacy and history.
LISTNUM 1 \l 155 Our plan is as follows:
LISTNUM 1 \l 156 First and foremost, for City to reaffirm its local, urban and diverse identity, and to re‑focus its operations on the development of that brand and core mandate.
LISTNUM 1 \l 157 Secondly, City must sort out its conflicted priorities. The stations must move away from specialty‑driven initiatives in programming genres like science‑fiction, and establish a more consistent programming approach, one that is more reflective of a re‑focused brand and a vision for Citytv.
LISTNUM 1 \l 158 And finally, City must be able to access the resources and expertise necessary to make a long‑term investment in television, helping it to become a significant, new player in the production of high‑quality programming, and re‑establishing its financial viability and future profitability.
LISTNUM 1 \l 159 I will now hand over to Leslie to expand on additional elements of our programming strategy, starting with local programming.
LISTNUM 1 \l 160 Leslie?
LISTNUM 1 \l 161 MR. SOLE: We believe that our local programming strategy currently being pursued by the City stations is fundamentally sound.
LISTNUM 1 \l 162 It is delivering benefits for local audiences and, over the longer term, should help them attract larger audiences, and shore up their financial position.
LISTNUM 1 \l 163 Throughout its long history in Toronto, City has been a pioneer in local reflection and local content, including such iconic shows and programming concepts as The NewMusic, CityLimits and Speaker's Corner, just to name a few.
LISTNUM 1 \l 164 We expect this proud tradition to continue.
LISTNUM 1 \l 165 The City stations in Western Canada recently expanded Breakfast Television, and introduced new local programs, such as YourCity, to enhance community reflection, and provide greater scope for local context and discussion.
LISTNUM 1 \l 166 We support their efforts to build a stronger and deeper relationship with viewers through distinctive local programming.
LISTNUM 1 \l 167 But City has to re‑think its approach to Canadian priority programming.
LISTNUM 1 \l 168 In the past, synergies with CHUM and the specialty services influenced the the programming direction for the entire group.
LISTNUM 1 \l 169 That may have helped to control costs, but it also narrowed the scope of priority programming projects that could have been considered specifically for the City stations.
LISTNUM 1 \l 170 Under our ownership, programming synergies with specialties will be significantly reduced but, at the same time, City will be better able to make programming decisions that are more consistent with its vision and the brand.
LISTNUM 1 \l 171 The benefits from both this application and the Craig Media acquisition will provide a unique opportunity to kick‑start this change of focus and direction.
LISTNUM 1 \l 172 They are an important component in the future development of Canadian priority programming on these stations.
LISTNUM 1 \l 173 And no strategy is complete without acquired American programming.
LISTNUM 1 \l 174 Here too, the loss of synergies with the CHUM specialties will provide us with new opportunities.
LISTNUM 1 \l 175 The City stations will have much greater freedom to acquire US programming that is supportive of their local, urban and diverse market positioning.
LISTNUM 1 \l 176 We think that it will make for a more compelling and consistent program schedule ‑ one that will help the stations generate more interest from viewers, more revenues from advertisers and ultimately more financial stability.
LISTNUM 1 \l 177 However, it will continue to be difficult to compete for the acquisition of the famous Top 20 simulcasts.
LISTNUM 1 \l 178 CTV and CanWest have significantly greater scale and significantly greater distribution, and City will have to carefully pick its spots, making strategic and opportunistic program buys that incrementally build audiences and revenues over the long term.
LISTNUM 1 \l 179 And we can't forget new media. There are few companies in Canada better able to help City and these stations than Rogers.
LISTNUM 1 \l 180 New media is a key strategic focus of ours, and we are investing in new projects and services, and experimenting with alternative distribution platforms and new media content on a daily basis.
LISTNUM 1 \l 181 To establish and maintain a powerful connection to local communities, the City stations must have a strong presence in Video on Demand, wireless, the Internet. City must continue to innovate itself and respond to new challenges of broadband and the new multi‑platform environment.
LISTNUM 1 \l 182 Reflection of cultural diversity has always been important at Rogers, beginning with our cable community channels in the 1970s, followed by our investment in CFMT in the 1980s, and it has certainly also been an important part of the City philosophy.
LISTNUM 1 \l 183 Under our ownership, the City and OMNI stations will be able to share their respective experiences, their expertise, and strengthen their approaches and contributions to cultural diversity.
LISTNUM 1 \l 184 We believe our programming strategy includes all of the fundamental elements required to rebuild and revitalize the Citytv stations, and that Rogers has the resources, the expertise and the long‑term perspective necessary to successfully undertake this challenge in the future.
LISTNUM 1 \l 185 Tony?
LISTNUM 1 \l 186 MR. VINER: I will address the three policy and regulatory issues identified by the Commission in the Notice of Public Hearing: First, common ownership; two, programming diversity; and three, the benefits test.
LISTNUM 1 \l 187 The Commission's policy generally permits the ownership of no more than one station, in one language, in a given market.
LISTNUM 1 \l 188 And in our submission, the common ownership of City and OMNI fits squarely within that policy.
LISTNUM 1 \l 189 These stations do operate in different languages. They have different audiences and mandates for their programming, and reflect the needs and demands of different communities.
LISTNUM 1 \l 190 The City stations are licensed as English‑language stations, competing directly with other English‑language stations like CTV, Global and the CBC.
LISTNUM 1 \l 191 On the other hand, the OMNI stations are specifically licensed as ethnic stations, devoting the majority of their schedule to programs produced in third languages.
LISTNUM 1 \l 192 With language as a distinction, the Commission's policy assures that audiences are offered a diversity of programming options from local broadcasters, and it is a distinction that has been consistently applied in a number of decisions:
LISTNUM 1 \l 193 In 2002, the Commission approved our application for a second ethnic television station in Toronto, because the stations committed to each offering programs in different languages.
LISTNUM 1 \l 194 In 2000, the Commission approved the acquisition by CanWest of CJNT‑TV, an ethnic station in Montreal, even though that purchase would essentially provide CanWest with a second station in that market.
LISTNUM 1 \l 195 In 1985, the Commission approved an application by TQS for a new French‑language television station in Montreal, even though TQS was owned by CFCF Inc., also the owner of an English‑language television station in that market.
LISTNUM 1 \l 196 We certainly recognize that ethnic stations also have the authority to carry American programming.
LISTNUM 1 \l 197 But that authority is no different than what is provided to other broadcasters.
LISTNUM 1 \l 198 It is simply a reality of the Canadian model for television, a model that uses American programming to generate the revenues needed to meet Canadian content and service obligations.
LISTNUM 1 \l 199 For an ethnic station, that authority has become a part of the Commission's Ethnic Broadcasting Policy. It has provided the financial foundation from which to launch, and sustain, free over‑the‑air stations in markets across Canada.
LISTNUM 1 \l 1100 But that authority is also restricted.
LISTNUM 1 \l 1101 By condition of licence, ethnic stations are requires to primarily serve ethnic audiences during the peak prime time period of 8 to 10 p.m.
LISTNUM 1 \l 1102 That restriction ensures a prime time focus for ethnic programming at OMNI. Ethnic audiences are assured they will have access to OMNI newscasts and programs during peak viewing periods.
LISTNUM 1 \l 1103 It also ensures that OMNI has a limited ability to generate significant audiences and revenues from American programming, minimizing its impact on other stations.
LISTNUM 1 \l 1104 We believe approval of our application will have no material impact on competition for advertising revenues.
LISTNUM 1 \l 1105 In fact, our application has been overwhelmingly endorsed and supported by advertisers and agencies.
LISTNUM 1 \l 1106 That is because a stronger, more viable Citytv will provide advertisers with another option for television advertising.
LISTNUM 1 \l 1107 The second issue is programming diversity and, in particular, editorial independence.
LISTNUM 1 \l 1108 Media properties such as OMNI, 680 News and Maclean's all pursue independent editorial policies, with separate news line‑ups that reflect their different positions in the market, and their different target audiences.
LISTNUM 1 \l 1109 Under our ownership, the City stations will continue to pursue their own editorial direction, contributing to diversity through an intensely urban and community‑reflective perspective, and by offering distinctive local points of view.
LISTNUM 1 \l 1110 The editorial and news presentations differences between the OMNI and City stations will be sharp and clear, just as they are now.
LISTNUM 1 \l 1111 Let me quickly show you an example from earlier this month.
‑‑‑ Présentation video / Video presentation
LISTNUM 1 \l 1112 MR. VINER: The third issue relates to the acceptability and incrementality of our proposed benefits.
LISTNUM 1 \l 1113 Based on the requirements established in the Television Policy, we proposed benefits equal to ten per cent of the total purchase price.
LISTNUM 1 \l 1114 Although we had initially set that amount as 37.5 million dollars in our application, we have since revised it to approximately 39.5 million, to reflect adjustments made as a result of the value of the real estate we are also proposing to acquire in this transaction.
LISTNUM 1 \l 1115 In our submission, these benefits are unequivocal and incremental. They will build on baseline spending at City, and generate high‑quality priority programming through significant involvement with independent producers.
LISTNUM 1 \l 1116 Our benefit proposals were very well received by interveners, including the major associations representing Canadian creative talent, producers and distributors.
LISTNUM 1 \l 1117 These interveners made a number of suggestions for modifications, many of which we have incorporated as revisions to our initial commitments.
LISTNUM 1 \l 1118 As they relate to Canadian production, 100 percent of our benefits will now go to priority programming with a minimum of 85 percent dedicated to independent production and 65 percent specifically to drama.
LISTNUM 1 \l 1119 Together with the remaining benefits from the Craig Media acquisition, these benefits will establish an important new source of funding totalling more than $50 million in incremental expenditures for the production of high‑quality Canadian programming.
LISTNUM 1 \l 1120 Rael.
LISTNUM 1 \l 1121 MR. MERSON: Mr. Chair, members of the Commission, we believe that the approval of this application is in the public interest and represents the best possible proposal under the circumstances.
LISTNUM 1 \l 1122 Rogers is the logical buyer of Citytv stations. We have the skills and resources necessary to ensure the continued strong presence of the distinctive and diverse voice of the City stations in their local markets.
LISTNUM 1 \l 1123 We have made significant commitments to provide substantial new support for Canadian priority programming and independent production.
LISTNUM 1 \l 1124 Our application complies with established Commission policy on common ownership and will preserve editorial independence and program diversity.
LISTNUM 1 \l 1125 A plan for the future of the Citytv stations is not without challenge but we believe that we have an effective plan, one that with your approval we look forward to implementing.
LISTNUM 1 \l 1126 Thank you for your time and attention this morning. We await any questions you might have.
LISTNUM 1 \l 1127 THE CHAIRPERSON: Thank you very much and thank you for filing those documents and on time, it is very much appreciated, it makes our life easier.
LISTNUM 1 \l 1128 We are going to question you in five areas: ownership, program diversity, local programming, valuation and tangible benefits. We will proceed with that.
LISTNUM 1 \l 1129 On ownership you say in your application that you are going to get rid of the two religious stations that you have by the end of the year and I would like you to tell me what is going to happen if that isn't the case at the end of the year.
LISTNUM 1 \l 1130 To be specific, I want to avoid that you come back to me here at the end of the year and say we have tried our best, we can't find a buyer and let us keep them.
LISTNUM 1 \l 1131 MR. VINER: Mr. Chairman, we unequivocally will not do that. We are close to finalizing a transaction to sell the religious stations, although close isn't there.
LISTNUM 1 \l 1132 We have proposed in our application to take up to 12 months to try to sell those religious stations and if we are unsuccessful to put them under some form of vendor trusteeship or separate management in a way that would satisfy the Commission that they would be operated independently.
LISTNUM 1 \l 1133 THE CHAIRPERSON: I would like you to go a bit further than some form of separate management or trusteeship. Can you commit that you will put it under trusteeship at the end of 12 months and that that trustee will have full authority to sell it by auction?
LISTNUM 1 \l 1134 MR. VINER: Absolutely.
LISTNUM 1 \l 1135 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1136 Secondly, on multiculturalism, you have a 60 and 40 language split in the OMNI stations and you know our Ethnic Broadcasting Policy says that in specific cases we can set different minima and maxima.
LISTNUM 1 \l 1137 Given you are now entering into the television network business, you are going to have five stations, et cetera, is this the proper time to revisit the 60‑40 split?
LISTNUM 1 \l 1138 MR. VINER: No, we don't think so.
LISTNUM 1 \l 1139 If I could just take a moment, Mr. Chairman, to give a bit of history.
LISTNUM 1 \l 1140 You know, when we bought CFMT in 1985 it was 100 percent ethnic programming and it was bankrupt, and the Commission at that time decided to afford us the same opportunity or ethnic stations the same opportunity to schedule up to 40 percent U.S. programming in order to subsidize the ethnic programming that was available over the air. They made that decision because they didn't want to lose the ethnic programming.
LISTNUM 1 \l 1141 That provision is exactly the same, exactly the same as every other Canadian over‑the‑air television station except we have, as I referred to in the in chief, restrictions on scheduling U.S. programming between 8:00 and 10:00.
LISTNUM 1 \l 1142 When we bought that station, we invested heavily in the ethnic schedule. Those of us who were around at the time know that we completely retrofitted the plant, we introduced tougher journalistic and production standards, and we also invested in a successful U.S. programming schedule, and slowly we nurtured that back to profitability.
LISTNUM 1 \l 1143 But there is no question that we need that subsidy perhaps more than other Canadian television stations because we have smaller audiences and a broad service mandate. We have restrictions on the scheduling of that programming and we are unable to sort of, as other stations are, cross‑promote all of our programming.
LISTNUM 1 \l 1144 So I would say that we absolutely would continue to need the subsidy that is provided by that U.S. programming.
LISTNUM 1 \l 1145 THE CHAIRPERSON: Yes, but the U.S. programming that you are buying for that, you can now also show it on City, so you have got a greater outlet for it. So while before you paid for it dearly undoubtedly to show it only on OMNI, you have another window now in which to show it and try to recoup your costs.
LISTNUM 1 \l 1146 MR. VINER: Well, I will make a couple of comments.
LISTNUM 1 \l 1147 The first is that that is really not the way programs are bought and sold, U.S. programs. Generally, they are bought and sold on a national basis. So unless we have the ability to show programs nationally, we still have that issue of just buying for a single market, for CFMT.
LISTNUM 1 \l 1148 The other thing I would point out, Mr. Chairman, is that we have undertaken a commitment that no more than 10 percent of the programming will be shown on City and OMNI.
LISTNUM 1 \l 1149 So I think there is plenty of assurance that the programming won't be the same.
LISTNUM 1 \l 1150 And again, the scheduling, the prime time restriction certainly ‑‑ there isn't one on Citytv and there is one on OMNI.
LISTNUM 1 \l 1151 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1152 In terms of separate editorial newsrooms, and you just showed us that clip, et cetera, you know there is a statement of principles and practices at the CRTC. I assume you are willing to commit to that with regard to OMNI and City?
LISTNUM 1 \l 1153 MR. VINER: Yes, sir.
LISTNUM 1 \l 1154 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1155 And then thirdly, City was really part of CHUM, and City and the station, I understand, have met with the founder and with the creative partners. There was a real great integration between the specialty channels and City.
LISTNUM 1 \l 1156 They were in the same location and they used, if I understand it, the network to try out an idea. If it worked, they spun it off into a specialty channel and they would produce it and the production would be shown both on the specialty and on City as appropriate, et cetera.
LISTNUM 1 \l 1157 Now all of that is ending here but you are still on the same premises. I believe that you told me prior to filing the application that you intended to physically relocate but you also have to disentangle the people, you have to decide who is at City, who is at CHUM.
LISTNUM 1 \l 1158 How is this coming along? How long is it going to take? Basically, how long is City going to be part of Citytv and when is it going to stand on its own independent feet?
LISTNUM 1 \l 1159 MR. VINER: Well, I will ask Rael to comment but the transition services agreement allows for up to three years. I have a boss who would like to allow it up to three weeks ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1160 MR. VINER: ‑‑ and it will probably be somewhere in between.
LISTNUM 1 \l 1161 But Rael has been spearheading those discussions and I would ask him to comment.
LISTNUM 1 \l 1162 MR. MERSON: It hasn't been easy, I guess, is the short answer.
LISTNUM 1 \l 1163 One of the things we had thought about at the time of the acquisition was really just the difficulty in disentangling the businesses.
LISTNUM 1 \l 1164 You know, every once in a while you look at a business and you look at it with the potential that you might somehow be able to find synergies in the business when you integrate them with your own operations.
LISTNUM 1 \l 1165 These businesses have been absolutely built into the CHUM infrastructure and every synergy that could have been extracted was sort of extracted.
LISTNUM 1 \l 1166 They had a central backroom operation. As you described, they sort of moved the programming around between the specialties and the channels. So it has been a challenge.
LISTNUM 1 \l 1167 As of last week, we and the trustee and CTV agreed on a separation of employees and they have all been notified to that effect already. So that part of it has been done.
LISTNUM 1 \l 1168 The physical relocation, as Tony described, is something ‑‑ the whip has been cracked on us to sort of get it done as soon as possible.
LISTNUM 1 \l 1169 I think Stephen and Peter, who are in the audience, will tell you the City employees would like to get out. They feel like they are in alien territory and would like to move out at this point as quickly as they can and we are committed to doing that.
LISTNUM 1 \l 1170 What is the bad news about the level of integration? The bad news about the level of integration is it is going to be very difficult for us to replicate the synergies that they managed to effect.
LISTNUM 1 \l 1171 The good news is that we think we will be able to give City a focus and a direction to their programming strategy that has gone a little awry in the last couple of years, that had these conflicted priorities in the sense that they had to develop programs that might work on the SciFi Channel, it might work on one of the Digis, and might therefore also run on Citytv.
LISTNUM 1 \l 1172 So when you look at their programming schedule now, it is difficult to identify sort of a core theme or a core structure and one of the things we think we will be able to do by separating them out is refocus on sort of a core brand and a core identity.
LISTNUM 1 \l 1173 So I think the synergies are going to be difficult to replicate but I think we will be able to give them sort of a focus and a direction that they have been lacking over the last couple of years.
LISTNUM 1 \l 1174 THE CHAIRPERSON: So you have separated the employees. The physical separation will take place when?
LISTNUM 1 \l 1175 MR. MERSON: Not until closing, obviously. We just ‑‑
LISTNUM 1 \l 1176 THE CHAIRPERSON: I assume you get our approval before you close, yes.
LISTNUM 1 \l 1177 MR. MERSON: Yes, at closing. I mean what we have told them essentially is you are going to go with the City operations wherever they end up and the remainder will remain with CTV. This is something CTV did last week.
LISTNUM 1 \l 1178 THE CHAIRPERSON: All right. And then they are sort of using each other's facilities?
LISTNUM 1 \l 1179 MR. MERSON: Yes.
LISTNUM 1 \l 1180 THE CHAIRPERSON: So give me a time frame of what time ‑‑ you say you have an agreement for three years. Obviously, Mr. Rogers would wish to have it done in three weeks, you said.
LISTNUM 1 \l 1181 What is the likely reasonable point at which time we can say the divorce is complete, you now have City here and you have CTV there?
LISTNUM 1 \l 1182 MR. MERSON: Eighteen months would be the answer. We have a plan. We have an idea of what it is we would like to do. As always with these things that require multiple things to happen at the same time, we think 18 months is the shortest amount of time and probably a reasonable period that we will have it done by.
LISTNUM 1 \l 1183 MR. VINER: But that is a touch timetable. I heard the sharp intake of breath from our engineering folks. We have to find a place, we have to build it out, order the equipment, figure out who is going to move where.
LISTNUM 1 \l 1184 I am on Rael's side and I think 18 months will be aggressive but I think we can do it.
LISTNUM 1 \l 1185 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1186 Any questions from my fellow commissioners on the ownership issues?
LISTNUM 1 \l 1187 Rita?
LISTNUM 1 \l 1188 COMMISSIONER CUGINI: No.
LISTNUM 1 \l 1189 THE CHAIRPERSON: No?
LISTNUM 1 \l 1190 Then let us go on to issue number 2, which is program diversity.
LISTNUM 1 \l 1191 I think, Rita, you take the lead on that.
LISTNUM 1 \l 1192 COMMISSIONER CUGINI: Thank you, Mr. Chairman.
LISTNUM 1 \l 1193 I think our Chairman has provided rather successfully an overture to this hearing and then allowing us to drill down a little further into some of the issues that he talked to you about.
LISTNUM 1 \l 1194 So I am going to start with foreign programming and its scheduling and selection because when I look at the program schedules that you have included in your application, I see that currently there is very little overlap in terms of titles on both the OMNI station and the Citytv stations.
LISTNUM 1 \l 1195 OMNI seems to rely more on syndicated programming while the City stations make more use of first‑run U.S. programming with some of it being simulcast.
LISTNUM 1 \l 1196 So I am just wondering, going forward, is this the model upon which you will continue to program both the OMNI and City stations?
LISTNUM 1 \l 1197 MR. MERSON: Yes is the short answer. As Tony mentioned, OMNI has no ability to program into primetime and you can only afford to compete for the best first‑run programming if you can afford to exhibit it in primetime. If you can't afford to exhibit it in primetime, there is no potential for recovery and there is no possibility of competing in the first place.
LISTNUM 1 \l 1198 OMNI is restricted to the shoulder period. Its restriction inhibits its potential audience and therefore limits what it can reasonably hope to achieve with its primetime programming.
LISTNUM 1 \l 1199 So I can't see a framework that would allow either station to do much differently. It is the way the market works. If you can't possibly draw the audiences necessary to sustain the programming you can't compete for it in the first place and, you know, it has that sort of cycle and you are boxed into certain areas. So I believe there is no potential change.
LISTNUM 1 \l 1200 Let me ask Leslie if he wants to add anything.
LISTNUM 1 \l 1201 MR. SOLE: Commissioner Cugini, I think that if you are asking the question are these strategies going to stay the same, the answer is yes.
LISTNUM 1 \l 1202 When OMNI makes a commitment to a U.S. programming it is for years, it is reruns and it has to work over a number of years, as Rael said, in off‑prime periods. City's major investments are in day to day or week to week programming that, pardon the inside baseball or the jargon, it is perishable. We are going to have to together, if this is approved, come up with a strategy that makes more events happen and that City's going to be more current and more directed towards what I would call week to week TV, where OMNI is more of an ongoing, dependable, consistent, well‑known and, and I am not afraid to say it, repeat channel.
LISTNUM 1 \l 1203 COMMISSIONER CUGINI: And make more events happen is applicable to the foreign programming, and how will you choose what are the events that will make things happen for City?
LISTNUM 1 \l 1204 MR. SOLE: I think I have overstated it. I am basically talking about ‑‑
LISTNUM 1 \l 1205 COMMISSIONER CUGINI: They are your words.
LISTNUM 1 \l 1206 MR. SOLE: I appreciate that. I think I am talking about week to week U.S. currently‑released television programs. How will we make that work? We think there's a number of strategies. There's a great deal of programming, as I said in the in‑chief, above and beyond the top 20.
LISTNUM 1 \l 1207 There are new ways to look at this. These are five major cities in this country, they are deserving of local and priority programming that suits their markets. At the same time, I think there is an alternative way to program foreign and U.S. programming and it doesn't necessarily have to come from the foreign networks, there is many sources in these days.
LISTNUM 1 \l 1208 COMMISSIONER CUGINI: Because, currently, Toronto is the only market in which there exists a city and an OMNI station ‑‑ we know of two more where that will happen, Calgary and Edmonton ‑‑ is it safe to assume that the Toronto model will be the template going forward as you roll out into both Calgary and Edmonton?
LISTNUM 1 \l 1209 MR. SOLE: Absolutely.
LISTNUM 1 \l 1210 COMMISSIONER CUGINI: Okay, just so I have a visual framework.
LISTNUM 1 \l 1211 In your oral presentation you said that the City stations will have much greater freedom to acquire U.S. programming that is supportive of their local urban and diverse market positioning. So you started to talk a little bit about it in my previous question, but how will you determine the criteria? What foreign programming will go on the OMNI stations and what foreign programming will go on the City stations?
LISTNUM 1 \l 1212 MR. MERSON: We really don't see much difference in the nature of the programming that currently runs on both stations. As Leslie mentioned, we do think, you know, what will remain on the OMNI ‑‑ OMNI is fundamentally a station that is horizontally programmed in the sense that we program the same shows every single night at the same time.
LISTNUM 1 \l 1213 Because when you speak to an audience and you try to build a habit in them you have got a couple of choices. One of the choices is to say, look, come to us every night, we are going to have something new and exciting and here is what you can expect to find. But if you don't have that, because your schedule is a broad service mandate and you have multiple languages and multiple different pockets on the schedule, what you need to try to do with the English schedule is build predictable habits in the English schedule and that is what we have tried to do.
LISTNUM 1 \l 1214 So we have built English programming with the same program that is programmed every night at the same time, and I can't see another strategy that would work. It would be very difficult to explain to a viewer why it was between 6:00 and 8:00 at night or between 6:00 and 7:00 at night they should come to you in a time where it is not planned viewing. So you need to build that habit. So somehow I believe the OMNI habits will remain the same, will program horizontally across the given week.
LISTNUM 1 \l 1215 City is different, City is a first‑run station, so it has an ability to acquire good U.S. programming, to speak to the consumers in a way that sort of like CTV or Global might in that sense come to us with the best new programming out there. Where City is handicapped relative to CTV and Global is in the scale of distribution. Global and CTV have national distribution, they are always going to be able to aspire to be the first at the table when programming becomes available for sale.
LISTNUM 1 \l 1216 And we, to some degree, are going to have to pick our spots and define a strategy for City that is consistent with its brand, that is explicable to the audience that it seeks to serve and ultimately is profitable. You know, one of the things we do believe that handicapped City over the last couple of years was the sort of toe‑in‑the‑water philosophy with acquired U.S. programming.
LISTNUM 1 \l 1217 It is one of these businesses that isn't a game for sissies anymore. You know, either you go in and you make a commitment to building a first‑run schedule that hangs together, that speaks to the audience in a way that they can understand or you are better off doing something completely different and building a low‑cost schedule that delivers you margins, that doesn't compete for first‑run programming.
LISTNUM 1 \l 1218 I can't tell you at this point, and I don't think Leslie can either, exactly what we might do and where we would end up. But we understand the parameters, we understand there is no point being half pregnant, either we do it or we don't do it. We know it has to tie into a brand. We are sort of relieved from the constraints that City had in the sense that they were trying to share programming among all the various family members. We will have a single‑minded focus on the City stations and we will come up with an acquired strategy that fits for City and fits within the marketplace itself.
LISTNUM 1 \l 1219 COMMISSIONER CUGINI: Are the demographics different for these two station groups or is your target demographic different for these two station groups?
LISTNUM 1 \l 1220 MR. MERSON: Well, fundamentally the bulk of OMNI's primetime programming, as you know, is in language, so it is a completely and utterly different audience.
LISTNUM 1 \l 1221 COMMISSIONER CUGINI: But just for the foreign programming segment.
LISTNUM 1 \l 1222 MR. MERSON: For the foreign programming, not too different. You know, there is a sense that we all have that City has appealed to a more youthful demographic than some of the other television stations and the evidence doesn't suggest that. The evidence suggests they are a station that sort of programs to 18 to 49‑year‑old people and they have been successful doing that. And you look at OMNI's demographics in its shoulder periods and you find a very similar demographic.
LISTNUM 1 \l 1223 But I think when you look at the population as a whole those are the people watching television in those time periods and you naturally gravitate towards them.
LISTNUM 1 \l 1224 Leslie, I don't know if you want to add anything?
LISTNUM 1 \l 1225 MR. SOLE: Commissioner Cugini, I think that with the evolution of hundreds of channels that narrow demographic over‑the‑air television may have been from another era. What Rael is alluding to is that when you are completely and entirely supported by advertisers your demographic automatically broadens.
LISTNUM 1 \l 1226 The reason that OMNI and City and CTV and Global have very similar demographics and the reason that the advertising trades on demographics like 25 to 54, 18 to 34. I think in a channel like City you want a range of programs that appeal to those different sectors. It is very competitive, but at the same time there also is an opportunity to reach a broader audience from an urban point of view, from a diverse point of view and from a local point of view.
LISTNUM 1 \l 1227 COMMISSIONER CUGINI: Thank you for that.
LISTNUM 1 \l 1228 THE CHAIRPERSON: Can I just interject?
LISTNUM 1 \l 1229 COMMISSIONER CUGINI: Please.
LISTNUM 1 \l 1230 THE CHAIRPERSON: When we had the CTV hearing we heard for two days about the edginess of City and people tried to define it, etc. and it seems there was a whole gamut of witnesses who all thought how that edginess was what made City different and what sold City and it had to be recreated and they thought CTV would be the best person. We happened to be disagreed.
LISTNUM 1 \l 1231 But are you trying to pursue the recreation of that edginess that you..? You were here and you heard about it that time?
LISTNUM 1 \l 1232 MR. MERSON: We were well advised. No, you know, we thought long and hard about what City was as an identity and we batted it around, not only amongst ourselves, but with all the City people, and ultimately the definition we have come up with for City is localness, urban reflection and a reflection of the diverseness of the population that it serves. You know, edginess might refer to the style of photography or how the presentation is.
LISTNUM 1 \l 1233 But ultimately, for us, it is a question of the audience that we seek to target and the audience we seek to target is localness. Because we really fundamentally believe there will be two elements to successful television operation in the 21st century; the one will be its local connection to its audiences and the other will be the quality of the first‑run programming it is able to commission and acquire. Because those are the only things that will differentiate it from what might otherwise be available in the 500‑channel universe or in the IPTV world.
LISTNUM 1 \l 1234 So localness was the first element we wanted to hang onto. Urbaneness, we do believe the City stations, the name says it, the way they have been built is they only operate in major urban centres, and the focus should be urban and on urban communities. And diversity is a hallmark of what City has done and one, given our backgrounds, we are completely comfortable with and would seek to endorse.
LISTNUM 1 \l 1235 So edginess has never been part of our vocabulary to us, it is a question of the target audiences and who we seek to serve and how it is we will design the operation around those kinds of principles.
LISTNUM 1 \l 1236 THE CHAIRPERSON: Thank you. Back to you, Rita.
LISTNUM 1 \l 1237 COMMISSIONER CUGINI: Thank you. Mr. Sole, earlier you said that there are many sources for foreign programming. Are the specialty services that Rogers currently operates one of those sources?
LISTNUM 1 \l 1238 MR. SOLE: Yes, they are, but they represent a very narrow opportunity at this point. We are in the sports business, we have Rogers Sportsnet in four regions of the country, we have a technology channel that is naturally aimed at younger people that understand it, gaming and the internet and things like that, and we have a factual channel called the Biography Channel.
LISTNUM 1 \l 1239 There will, from time to time, be synergies that relate to our over‑the‑air channels and those speciality channels. It doesn't represent anywhere the magnitude that the CHUM group had with music and science fiction, their cultural arts channel and more than one music channel and so on. But I think when I said specialty and cable channels I meant around the world. I think there is an opportunity in acquiring programming that isn't necessarily from NBC, CBS, FOX or ‑‑ I don't know, which one I miss ‑‑
LISTNUM 1 \l 1240 MR. VINER: ABC.
LISTNUM 1 \l 1241 MR. SOLE: ‑‑ ABC. Thank you, Tony. But there is a plethora of interesting suitable programming that we think we will investigate and maybe take some risks and change City's nature in primetime in the acquired area.
LISTNUM 1 \l 1242 COMMISSIONER CUGINI: And so the inclusion possibly of programming from the specialty services, that would be included in the 10 per cent overlap limitation that you have offered?
LISTNUM 1 \l 1243 MR. SOLE: Our offering was related to our over‑the‑air channels. No more than 10 per cent ‑‑
LISTNUM 1 \l 1244 COMMISSIONER CUGINI: Between the over‑the‑air channels?
LISTNUM 1 \l 1245 MR. SOLE: ‑‑ duplication between CityTV over‑the‑air and OMNI over‑the‑air.
LISTNUM 1 \l 1246 COMMISSIONER CUGINI: Right. So there is no limit on how much programming from your specialty channels could be on the CityTV channels?
LISTNUM 1 \l 1247 MR. VINER: No, I never thought about it, and if you gave me sometime I would think about it. But I am sure I could say yes and someone will correct me, but there is really relatively little ‑‑
LISTNUM 1 \l 1248 COMMISSIONER CUGINI: Yes to what percentage?
LISTNUM 1 \l 1249 MR. VINER: Ten per cent, just keeping the 10 per cent.
LISTNUM 1 \l 1250 COMMISSIONER CUGINI: Ten per cent.
LISTNUM 1 \l 1251 MR. VINER: Can I just..? I will do the math at the break.
LISTNUM 1 \l 1252 THE CHAIRPERSON: Why don't you reflect on that and then at the end some of you can revisit that point?
LISTNUM 1 \l 1253 MR. VINER: Always accuse me of just saying yes, so I will wait.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1254 THE CHAIRPERSON: I want an affirmative yes, not a tentative yes.
LISTNUM 1 \l 1255 MR. VINER: Yes, sir.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1256 COMMISSIONER CUGINI: As stated in your application, one of your long‑term objectives is to amortize programming production and acquisition costs over the widest possible audience base. We will get to production in a minute. But what do you include in the term "widest possible audience base" that would allow you, in fact, to amortize your acquisition costs?
LISTNUM 1 \l 1257 MR. MERSON: I am quickly thinking about exactly what it related to. But I think it was just a restatement of the basic economics. There is this concept of a virtual cycle where you need to have ‑‑ it is sort of a restatement of our belief in how free over‑the‑air television works and what its role will be in the 500‑channel universe. You need to aspire to the largest possible audience to allow you to commission the best possible programming to allow you to deliver the ratings that deliver the revenue that gives you the audience.
LISTNUM 1 \l 1258 You know what I mean? It is this cycle that you need to get into. And if you can't in advance believe that you can aspire to the largest possible audience, it reduces the pool within which you swim and so I think it was just a reflection of that notion.
LISTNUM 1 \l 1259 COMMISSIONER CUGINI: So it doesn't include your role as an integrated Canadian media company in a broadband multi‑screen environment? I guess that is really my question. Is that what you meant by widest possible audience base?
LISTNUM 1 \l 1260 MR. MERSON: I am not sure if we specifically meant at that time. But clearly, you know, as a concept we are committed to an evolving television universe. You know, we know that the universe will evolve from a single screen to multiple screens. You know, you hear discussion about three screens, the television the broadband and perhaps wireless and the recreation of the programming that you do for each one of the environments in the other environment and it is something that we absolutely believe we will need to have access to, as will every other Canadian broadcaster.
LISTNUM 1 \l 1261 Because our competitors in the U.S. will be doing it and, to some degree, this is a business that requires you to exploit the rights that you have over the largest possible number of platforms. And, you know, we spoke a little bit about how the world might look in the future.
LISTNUM 1 \l 1262 And what we tried to convey in the in‑chief really was the notion that simply buying programming and exhibiting it on television in a world in which people skip commercials, the studios can go direct to the consumers, isn't going to be enough. You are going to have to sort of get involved and take on risk at a much higher level to ensure that you protect your position in whatever way those rights get exploited.
LISTNUM 1 \l 1263 If it might be by product placement within a program, you know, you are going to have to get involved at a much earlier stage in the development of a concept to ensure that you have the rights to place that product within a show and that you have the rights to exploit the exhibition of that program on the multiple different media.
LISTNUM 1 \l 1264 So, absolutely, we believe multimedia and we believe multiple screens are going to be a key feature of how this business evolves in the future.
LISTNUM 1 \l 1265 If the question is: do we have a privileged position because of our sister companies, we think we are sensitive to it. We think we are probably more sensitive to it than anybody else because they are so focused on how their businesses will evolve. But I don't think there's any privileged access. You know, it's the Internet we are talking about, largely coming to consumers through multiple media, and it is the most open system ever devised by man.
LISTNUM 1 \l 1266 COMMISSIONER CUGINI: Well, thank you. That's a rather complete answer and we will move on to the area of priority programming.
LISTNUM 1 \l 1267 So we will start with an easy one. You say in your application you are prepared to commit to increase the weekly commitment of priority programming from seven to eight hours for Citytv Toronto. Will you accept this as a condition of license?
LISTNUM 1 \l 1268 MR. VINER: Yes.
LISTNUM 1 \l 1269 COMMISSIONER CUGINI: That's when you get to say the affirmative "yes", right? Okay.
LISTNUM 1 \l 1270 In your application, you use phrases such as "television trailblazer", "source for innovation" and "distinct" when describing Citytv. Given that you have now made a commitment that 100 per cent of the funding from the Allan Waters Canadian Content Initiative will go to priority programming and that 85 per cent of that will go to independent producers, how will you work with these independent producers to ensure that your vision for these stations will translate into shows that Canadians will want to watch?
LISTNUM 1 \l 1271 MR. MERSON: We have sort of a long history, particularly from the OMNI 2 Fund, of how it is we have managed ‑‑ the process we have gone through of distributing benefit funds to independent producers through the OMNI 2 Fund.
LISTNUM 1 \l 1272 Madeleine can perhaps speak to that, but we are also very fortunate to have Diane Boehme here, who is City's resident expert on production and the commissioning of funds. So if you don't mind, if I could ask Diane to speak quickly about sort of City and its process, and if you have any further questions on OMNI and its process Madeleine will be happy to answer those.
LISTNUM 1 \l 1273 MS BOEHME: Thank you, Rael. I am happy to answer the question.
LISTNUM 1 \l 1274 One of the good things that comes with this application is a renewed commitment to development support for Canadian production. It's a very substantial one and it's one of those things that will help us find and identify those producers who have the ideas that dovetail with our local, urban and diverse plans.
LISTNUM 1 \l 1275 I think it takes time to develop those projects, it takes time to develop those concepts, but to really look at, through a dramatic narrative form, something that is about the essences of the cities where these Citytvs will inhabit, and that, typically, hasn't been done, whether it's drama or comedy.
LISTNUM 1 \l 1276 I think to find the right kinds of stories, the right sorts of narratives and to find ways to reach people in different platforms it's going to be a challenge, but I think we have the resources to do it.
LISTNUM 1 \l 1277 You know, it's been 23 years in the business for me now, and 12 years doing this kind of work, and there is an absolute hunger for the independent production community to take up these sorts of challenges. I think there's going to be a number of people that are going to want to be inventive with us about that.
LISTNUM 1 \l 1278 As far as our process goes, it's really an open door. We don't have a formal funding system. We don't have a system where there's deadlines to meet. There's a lot of application forms. It really sits very informally, where we sit down and chat with the producer about their idea.
LISTNUM 1 \l 1279 That's the first thing: do we think it fits, do we think it's a diamond in the rough that can require a little bit of honing and be a little bit more suited to what we have in mind, and then we work with them to do that, through the development phase, obviously, and then once we hit production, obviously ensuring that the casting reflects local, urban and diverse, that our storytelling reflects local, urban and diverse and that the budget is going to be something our audience is going to find attractive when it hits their screens.
LISTNUM 1 \l 1280 COMMISSIONER CUGINI: How does that compare or complement the process that OMNI has with its independent producers currently?
LISTNUM 1 \l 1281 MS ZINIAK: I think as far as OMNI is concerned, we are very proud to be able to have a benefit fund such as this where we are actually introducing new producers to the industry, not only a chance for new producers, but also new content.
LISTNUM 1 \l 1282 I think certainly if you take a look at the Task Force on Diversity, this completes the push.
LISTNUM 1 \l 1283 Finally, we have an opportunity to really platform the story of Canada, the story of Canadians, and, really, sharing diversity with the rest of the country.
LISTNUM 1 \l 1284 As you all know, this is the first‑ever fund in Canada that is third language, that actually accesses that kind of expertise and content to Canadians. So I think we have seen that we have given new opportunities to new producers. I think that this is something that is very Canadian.
LISTNUM 1 \l 1285 Also, we have had the opportunity, not only in the area of diversity, but also to partner in the aboriginal realm.
LISTNUM 1 \l 1286 So we have been able to really push forward, clearly, the history of Canada in third language, and also taking a look at what it really means to be Canadian.
LISTNUM 1 \l 1287 So we find, and I think our independent producers find, that this is also an opportunity to work with an alternative broadcaster, but one that perhaps has been longer in the so‑called mainstream. As you know, I always have a difficulty with the word "mainstream", but we know what we mean.
LISTNUM 1 \l 1288 So I think we are both alternative, we both unleash opportunities to new and also sometimes those independent producers who have expertise.
LISTNUM 1 \l 1289 THE CHAIRPERSON: In this case, whether it's City or whether it's OMNI, what happens to the rights, especially to the rights for other platforms, such as new media, et cetera? When you work with independent producers who usually get ‑‑ I mean, is there a standard form with which you deal with the rights: who has the rights to television, who has the rights to wireless, new media or whatever?
LISTNUM 1 \l 1290 I mean, nowadays, as we all know, this is becoming more and more an issue, so I would like to know what is the practice of Rogers in this regard.
LISTNUM 1 \l 1291 MR. STRATI: It's a very good question and insight into why one of the funds that we are proposing has a 10 per cent allocation for new media rights.
LISTNUM 1 \l 1292 There's a good example. There's a sort of significant documentary series on the Canadian Charter that was produced in eight different languages. At the time there was no new‑media component or new media budget, if you will, that came from it after that. The producer then said, "You know, I really want to have a web site platform, additional content, additional..." and she went to the Bell New Media Fund and got funding for that and used that.
LISTNUM 1 \l 1293 So, certainly for us, we want to have the ability, first, to be able to fund that, and also to have the capacity to, if there are other platforms and other opportunities in new media, for example, that the funding has the capacity to provide for it, for that kind of content, whether it's an extension or a new content.
LISTNUM 1 \l 1294 THE CHAIRPERSON: Well, that didn't exactly answer my question, which is: what's the standard formula? When you hire an independent producer to produce something or you work with him, who winds up with the rights, both television rights and the new media rights, and whatever rights ‑‑
LISTNUM 1 \l 1295 MR. SOLE: Mr. Chair, we end up with a licence fee. The copyright and the perpetuity rights belong to the independent producer right from the very beginning right to the very end.
LISTNUM 1 \l 1296 COMMISSIONER CUGINI: This is great because sometimes your interjections allow me to cross off questions and sometimes they provide a great segue into the next.
LISTNUM 1 \l 1297 MR. VINER: Mr. Chairman, did we answer your question, though? Did we answer it?
LISTNUM 1 \l 1298 THE CHAIRPERSON: Yes, thank you.
LISTNUM 1 \l 1299 I mean, as you all know, CTF is very much on my mind these days, and so are producer rights, et cetera, and so I wanted to know what the practice is for a large outfit like yours when you work with producers, and I think you answered it, thank you.
LISTNUM 1 \l 1300 COMMISSIONER LANGFORD: And trust me, the day you don't answer his questions, you will know.
‑‑‑ Laughter/ Rires
LISTNUM 1 \l 1301 COMMISSIONER LANGFORD: We are giving him Rookie of the Year. He doesn't know yet.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1302 COMMISSIONER CUGINI: Further to that, with more opportunity to work with independent producers, some have argued, comes more responsibility in the form of advocating that this company now enter into a Terms of Trade Agreement with the CFTPA.
LISTNUM 1 \l 1303 I was wondering if you had an opportunity to reflect upon that and give us your progress, opinion or recommendations to that suggestion.
LISTNUM 1 \l 1304 MR. STRATI: In terms of progress, we are new to it. Certainly, we were here when Citytv discussed it. It's sort of an industry initiative where different broadcasters are talking with different associations going forward on terms of trade, and certainly we would participate in that as we move forward.
LISTNUM 1 \l 1305 So certainly we are committed to working with the associations to develop, as other broadcasters are.
LISTNUM 1 \l 1306 MR. MERSON: But this is a very fluid marketplace. You know, every deal is a little bit different. We have been markedly unsuccessful in acquiring video‑on‑demand rights on certain occasions and sort of third‑screen rights, and things like that. So the marketplace is going to have to find its own level.
LISTNUM 1 \l 1307 You know, ultimately, philosophically, is there a value attached to new media rights? Yes, there is. You know, will we respect that value attached to the media rights? Absolutely.
LISTNUM 1 \l 1308 We do believe, over time, things will find a level. You know, ultimately, what the shows generate is what you can afford to pay for them, and we will find that level. But, absolutely, we believe there's a value to the right, and it's a value we will pay for.
LISTNUM 1 \l 1309 COMMISSIONER CUGINI: On to your commitment to comply with conditions of license for both Vancouver and Toronto to exhibit 100 hours of Canadian long‑form features on those two City stations, you have made a request to increase the number of documentaries from a maximum of 10 to 20.
LISTNUM 1 \l 1310 Movies always seem to be at the top of any viewer survey as being the most popular genre of programming, so what is your rationale for requesting this increase in documentaries?
LISTNUM 1 \l 1311 MR. MERSON: We think Canada produces great documentaries. You know, we think there's a demand for high quality documentaries.
LISTNUM 1 \l 1312 Perhaps I will ask Diane just to expand on the notion, but as we looked through the availability of new, good Canadian feature films and the supply of documentaries, it occurred to us that there might be a little bit of a rebalancing required between feature films and documentaries. The fact is good documentaries are being produced. We know there's an appetite for them out there.
LISTNUM 1 \l 1313 Again, it's a request for the opportunity to move up to 20 per cent, if the supply actually exists and if the demand actually exists. So it was largely the rationale behind the request.
LISTNUM 1 \l 1314 I would ask Diane just to add in more colour, if she could.
LISTNUM 1 \l 1315 MS BOEHME: Sure. Thank you very much, Rael.
LISTNUM 1 \l 1316 I think one of the things that we believe is not just documentaries, but the value and the interest that the audience holds for theatrically released documentaries, as well, and they fit within the same two‑hour slot. It's a little bit of a bigger examination table for whatever the subject of the documentary is and we have had a great deal of success on the Citytv side with long‑form documentary material.
LISTNUM 1 \l 1317 Everything from Go Further, Ron Mann's Grass, Metal: A Headbanger's History, recently, Manufacturing Dissent, the theatrically released about Michael Moore and how he makes documentaries, have demonstrated to us a very clear interest on the audience part for more of these.
LISTNUM 1 \l 1318 So we are committed to seeing if we can, obviously, expand the theatrical audience by providing a free television window for them.
LISTNUM 1 \l 1319 COMMISSIONER CUGINI: So if we were to allow this amendment, would these 10 hours be 10 hours of new programming to the system or would they be comprised of documentaries that are currently on OMNI or currently on any of the Rogers specialty channels?
LISTNUM 1 \l 1320 MR. SOLE: I didn't write all those down.
LISTNUM 1 \l 1321 Let's go backwards. OMNI doesn't generally deal in a two‑hour theatrical format. Would they be new to the system? Only if we are involved in the development through other processes could we guarantee that they would be new to the system.
LISTNUM 1 \l 1322 One of the points I would make, from an operating point of view, is the low level of impact that five documentaries would make in a broadcast year, because it would be less than one very two months, in terms of our overall commitment.
LISTNUM 1 \l 1323 I think, Commissioner Cugini, that they are going to come from every single source that Canadian documentaries come from. Rogers has been involved with documentaries for years. We would be supportive of the NFB.
LISTNUM 1 \l 1324 There are some great young documentary producers, and, quite frankly, we can see a blur happening. We can see a popularization of ‑‑ I'm not going to say any particular ‑‑ Super Size Me, you know, Sicko.
LISTNUM 1 \l 1325 We think that's a growing, interesting, engaging, factual point‑of‑view format that suits Canadian feature filmmakers.
LISTNUM 1 \l 1326 COMMISSIONER CUGINI: Excuse me, one of the concerns raised by intervenors is that if we allow this amendment, there will be an impact on the financing of Canadian feature films.
LISTNUM 1 \l 1327 I'm wondering, again, if you have had an opportunity to assess those interventions, and whether or not you agree that this would, in fact, have an impact on the Canadian feature film business.
LISTNUM 1 \l 1328 MR. MERSON: I am going to ask Diane again to speak from her experience, but we obviously don't. We think, as Leslie mentioned, I mean, this would amount to the exhibition of five more documentaries during the course of a year. It isn't that significant of a commitment.
LISTNUM 1 \l 1329 COMMISSIONER CUGINI: Right, but their ‑‑ sorry to interrupt, but their point is that means five fewer Canadian feature films will be ‑‑
LISTNUM 1 \l 1330 MR. MERSON: Absolutely.
LISTNUM 1 \l 1331 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 1332 MR. MERSON: So, again, this is all a question for us of sort of supply and demand and just a rebalancing of what the priorities are, and Diane can speak a little bit more knowledge to the situation, itself.
LISTNUM 1 \l 1333 MS BOEHME: Sure.
LISTNUM 1 \l 1334 No, we don't think it's going to have that much of an impact. The exhibition doesn't have the same thing to do as the financing.
LISTNUM 1 \l 1335 Obviously, you are financing, in the case of feature films, many years in advance of your window, particularly when you have got a theatrical window, you have a small DVD window, in most cases there's a Canadian pay television window that's usually 18 months. So the theatrical feature film activity that we've typically done usually is three, six to 48 months out of our exhibition period.
LISTNUM 1 \l 1336 Documentaries shouldn't impact on that and with the benefit package that we have here, our plan is that we're really probably going to as much as double our support for Canadian feature films within the benefit package that we have.
LISTNUM 1 \l 1337 So, I don't think it will change the financing of Canadian feature films, that's certainly not our intent. It's really just a matter of exhibition as opposed to financing, if that helps you.
LISTNUM 1 \l 1338 COMMISSIONER CUGINI: Okay. Thank you. And within the priority programming, you have ‑‑ you've said in your application you're prepared to accept the condition of licence that will require that the eight hours of priority programming to be broadcast on average each week by the City stations be distinct from English language priority programming broadcast on OMNI stations each week, correct.
LISTNUM 1 \l 1339 Safe to assume you mean this on a perm market basis?
LISTNUM 1 \l 1340 MR. VINER: That's correct.
LISTNUM 1 \l 1341 COMMISSIONER CUGINI: Do you have intentions to show in Edmonton and Calgary, for example, priority programming that has been previously aired on OMNI? In Toronto, I can think of a couple of titles that would be appropriate? Metropia comes to mind.
LISTNUM 1 \l 1342 MR. VINER: As you know, we don't have an obligation to do priority programming on OMNI, but certain of ‑‑
LISTNUM 1 \l 1343 COMMISSIONER CUGINI: But, by definition, sure Metropia fits.
LISTNUM 1 \l 1344 MR. VINER: Absolutely. Absolutely. Rail or Leslie?
LISTNUM 1 \l 1345 MR. MERSON: I'll ask Leslie too to speak to it. On the odd occasion, yes. You know, as we think through in this table of programming that only has, Metropia would be the only sort of feature produced, first run produced program that might fit the bill, a few of the documentaries that we have might fit the bill as well.
LISTNUM 1 \l 1346 But again, and these are fundamentally different businesses that focus on different audiences, the notion that you could run Canada people's history on Citytv in its prime schedule, that in effect prime schedule is a bit of a stretch.
LISTNUM 1 \l 1347 So, we don't think there is much opportunity for it at all, but we would like to have a flexibility if the opportunity arises.
LISTNUM 1 \l 1348 COMMISSIONER CUGINI: Anything to add?
LISTNUM 1 \l 1349 MR SOLE: I don't want to just add things for the sake of adding them, but everything that's running on in Ontario is new to all of Western Canada and opportunities being what they might be, we will have choices on where they might be exhibited in Alberta, for example, if this process is approved.
LISTNUM 1 \l 1350 We think the more people that see the type of documentaries that Madeline described, the better this system is served.
LISTNUM 1 \l 1351 We think that the more Canadians that see the products that Canadians make, the better the system is served.
LISTNUM 1 \l 1352 And that's what where we were talking about maximising our opportunity to put Canadian content on multiple platforms, markets, formats and so on.
LISTNUM 1 \l 1353 COMMISSIONER CUGINI: Thank you. My final line of questioning is in regards to third language programming.
LISTNUM 1 \l 1354 Is all of the third language programming that is currently on City bordered?
LISTNUM 1 \l 1355 Mr. MERSON: We believe so.
LISTNUM 1 \l 1356 COMMISSIONER CUGINI: I believe that in your application you've said you'd accept a condition of licence that would see no overlap of third language that's currently on City with the third language programming that is on the ‑‑
LISTNUM 1 \l 1357 MR. VINER: Yes.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1358 COMMISSIONER CUGINI: You have to have a role here, Mr. Viner.
LISTNUM 1 \l 1359 Those are all my questions, Mr. Chairman. Thank you.
LISTNUM 1 \l 1360 THE CHAIRPERSON: Thank you. I would like to come back to your opening statement, Mr. Viner, where you say that, you know, the fundamental beliefs that only free over‑the‑air television can draw the mass audiences that are necessary to support the production of the highest quality program.
LISTNUM 1 \l 1361 And Mr. Merson, when he was talking about the future City, reiterated certainly. He said two factors: localness and the ability to produce quality programming.
LISTNUM 1 \l 1362 Can you give me the rationale for this because it, at first blush, given the success on some specialty channels which have attracted huge audiences as in supposition that you can only produce quality program fairly and over‑the‑air television , it doesn't seem to be there?
LISTNUM 1 \l 1363 MR. MERSON: I'm happy to take it since I sort of said it.
LISTNUM 1 \l 1364 You know, there is always quite a little bit of crystal ball and a gaze of the future and, you know, there is a model that has been developed for specialty television over the last 20 years where specialty TV services, you know, gained widespread distribution because there were parts of packages that people might have wanted to pay for.
LISTNUM 1 \l 1365 But if you look at the world of the future and the ability of sort of consume as to pick and pay, you might result ‑‑ you know, the specialty world might sort of have it all differently.
LISTNUM 1 \l 1366 You might find a specialty world and you're going to have a review of the specialty regulations coming up soon, but you might find a specialty world where people picked and paid on an individual basis and they might pay a little bit more, but they get the right to pick what's individual.
LISTNUM 1 \l 1367 But as we look at the world of the future, it's hard to believe that the specialty channels have not maximized their distribution, that their actual number of subscribers that they have over the next 20 years might very well decline, as people choose more to pick and pay.
LISTNUM 1 \l 1368 Now, the revenues might stay the same because they probably will be able to charge those devoted followers of the channels more, but ultimately we believe that the model will be fewer subscribers per channel for the specialties, but probably the same revenue as they charge a little bit more to those devoted subscribers.
LISTNUM 1 \l 1369 So, we expect their distribution over the years will probably shrink a little bit, whereas we think free over‑the‑air will always be the ‑‑ you pick with us mass medium.
LISTNUM 1 \l 1370 MR. VINER: If I could just add, Mr. Chairman. The facts are now that although the share of specialty channels themselves has actually grown and outstripped over‑the‑air in many cases. Actual specialty services themselves, taken individually, none have the audience of a CTV or Global or City.
LISTNUM 1 \l 1371 In the individual markets, there is nobody that does as well as those stations. So, I just point that out.
LISTNUM 1 \l 1372 THE CHAIRPERSON: Okay. Thank you.
LISTNUM 1 \l 1373 On programming, Stuart, any questions? Helen? Elizabeth?
LISTNUM 1 \l 1374 Okay then, let's go onto the next thing, local programming and synergies and maybe Stuart you have taken the lead.
LISTNUM 1 \l 1375 COMMISSIONER LANGFORD: See? Having said I have no questions on programming, I am now going to ask questions on programming. That's what we do when we regulate.
LISTNUM 1 \l 1376 I want to start with Mr. Sole's opening statement this morning on page 5 where he said ‑‑ page 5 of your Opening Statement :
"We believe the local programming strategy currently being pursued by the City station is fundamentally sound."
LISTNUM 1 \l 1377 So, business as usual it seemed to me.
LISTNUM 1 \l 1378 And then, if edginess was the mantra of the Citytv folks trying to maintain control of City, the City stations, localness seems to be today's mantra from Rogers. So, of course, we want to turn our attention to this if this is fundamentally sound and if it's business as usual.
LISTNUM 1 \l 1379 But, it's incredibly important, more important than edginess, which sometime ago we were told was absolutely the most important thing in the world and at that time I was looking forward to the return of the Baby Blue movie, but apparently that's not to be.
LISTNUM 1 \l 1380 I then want to go in this bit of an introduction, to paragraph 58 of your Supplementary Brief, because I'm trying to figure out what this localness will mean. And in paragraph 58, you say:
"Each City station provides a wide range of local news and information programming.+
LISTNUM 1 \l 1381 And it's there that I begin to detect the possibility of a disconnect because, in my review of the hundreds of interventions, I found many from people who would disagree with that statement, who believe that in the last year City has abandoned true local news in all of its stations and all of the cities, except Toronto.
LISTNUM 1 \l 1382 And I would like you to respond to that and I would like us to try to examine it.
LISTNUM 1 \l 1383 And I suppose the first place to start may be for you to help me by looking at some of the schedules you provided, the multi‑coloured schedules, and telling me in cities other than Toronto, you can pick one as typical if you like, or look at all of them, where do I find the local news that 30 or so interveners say is gone from their cities?
LISTNUM 1 \l 1384 Is that a fair question?
LISTNUM 1 \l 1385 MR. MERSON: Thank you, Commissioner Langford. I'm going to ask ‑‑ fortunately I have Brad Phillips here who is the Station Manager in Vancouver. He is somewhere, right there. But I thought just by way of introduction I would just address the issue, you know.
LISTNUM 1 \l 1386 To me, the first question is localness and how is it you reflect your local communities and what is it you stand for and we sort of love what the City stations are doing. I mean, they have innovated their ‑‑ they have responded to the marketplace realities wherever they had to, the shows have changed over time.
LISTNUM 1 \l 1387 They have managed to evolve themselves and really coved out a significant local niche in each one of the markets in which they are in.
LISTNUM 1 \l 1388 There is something about the way they look and they feel and they speak to their audience that really says they're in touch with their band and they're in touch with the markets in which they're in.
And it's that connection that we seek to maintain.
LISTNUM 1 \l 1389 And as we look at the stations and you compare them to competitors, it's tough to argue that they haven't probably been more successful in building that local connection with their various communities. It's something to be frank. We have aspired to, over the years you know, to own broadcast properties and have found it difficult to replicate.
LISTNUM 1 \l 1390 The second part of the question about news is what is news in a modern world and I recall sort of a interaction we had at a hearing in Kitchener. We're on Kitchener radio, and there was a discussion on sort of what news sounds like on radio in a HipHop station and it sounds completely different to what it does on a conventional radio station.
LISTNUM 1 \l 1391 And so too news in television has evolved from the straight hard goods into something that might be a little bit more softer on the one case or a little magazine, more magazine like in the other case, but ultimately it's an attempt to reflect local communities and what's going on in those local communities to the communities themselves.
LISTNUM 1 \l 1392 So, with that as a quick introduction, I'm going to ask Brad just to speak to Vancouver in particular and take you through the program schedule in Vancouver.
LISTNUM 1 \l 1393 MR. PHILLIPS: Thank you Rael. I guess I would start my comment to the question by saying that we do do news. We do not do a news show at six p.m. in Vancouver, but we do do news.
LISTNUM 1 \l 1394 We do a four hour morning show breakfast television, the back bone of that show is news. We have news anchors, we have reporters. Every important story that is on the cover of that morning paper is on our morning show.
LISTNUM 1 \l 1395 We have live trucks reporting from news events that are happening or where a news is about to happen that day and we like to think that if it's happening in our city or if it's happened in the last 24 hours, we have it covered on our morning show.
LISTNUM 1 \l 1396 I suppose I should take the time to just comment on the fact that why we have moved away from six p.m. as the place where we do it, and we've ran news at that time for a long time, for many years, and tried very hard to find an audience there.
LISTNUM 1 \l 1397 In the end, we faced the reality that we weren't attracting an audience, that the market was, and we believe is well‑served at six o'clock by the other stations and we made a decision, business decision that we thought was well fought out, well researched and we said, you know, morning is a growth area.
LISTNUM 1 \l 1398 It is widely accepted as a place where morning news is growing and where audiences are growing and that's a place where we should go and that's where we should put our flag ship shell. And so, we moved our efforts into that area and we're proud of the show that we have on the air.
LISTNUM 1 \l 1399 COMMISSIONER LANGFORD: Let's dig a little deeper if you don't mind.
LISTNUM 1 \l 1400 Why is the situation so different in Toronto? Why can you obviously offer a diverse voice, a third voice if I can call it that, in Toronto, to Toronto people at 6h00, obviously make some kind of a go of it, make a financial case of it, but not in Vancouver and not in Calgary?
LISTNUM 1 \l 1401 Why is that? Why does the breakfast television go from 6h00 to 8h30 in Toronto, but from 6h00 to 9h30 in Vancouver is perhaps another way to ask the question?
LISTNUM 1 \l 1402 I mean, people driving to work, unless they have incredible powers of concentration, simply will have a little trouble catching some of the news in the morning but probably would be home in the bower of their family to enjoy it over dinner or while they are preparing dinner.
LISTNUM 1 \l 1403 I am trying to find here why you would ‑‑ I don't want to use the word "abandon," I think that is a loaded word, but why you would make a decision to say, well, we are going to move away from I think what is arguably in the public interest, to give people a diverse choice of sources of news in Vancouver and other places but not in Toronto.
LISTNUM 1 \l 1404 Why isn't the same business model working?
LISTNUM 1 \l 1405 MR. MERSON: You know, the beauty of the City stations is that they are not a network. As you look across their schedule, there is no consistency throughout the schedule and it is a decision made by the previous management to sort of try to not cookie‑cutter the stations to get them to be as reflective and as responsive to the local markets as possible.
LISTNUM 1 \l 1406 So it isn't CTV that has a Canada AM that runs across the country of a national news show that runs across the country. It is these designed to be local businesses that are managed locally that make decisions based on the realities of the local marketplace.
LISTNUM 1 \l 1407 As Brad said, they, at 6:00 at night, beat their heads against a wall with no success at developing an audience at 6:00 at night.
LISTNUM 1 \l 1408 Why didn't that work in Vancouver but work in Toronto?
LISTNUM 1 \l 1409 Toronto has 25 years of heritage and as the market developed and as the city grew it was able to sort of carve a niche for itself and build a news program at 6:00 at night.
LISTNUM 1 \l 1410 In Vancouver it has been much more difficult. It has been difficult to do. It has been a ‑‑ and the response to it has been logical, which is to say, look, the market at 6:00 is closed up, nobody is doing local Breakfast Television and nobody is doing local morning television. It makes perfect sense to go back in and refocus our efforts on the mornings that no one else is serving.
LISTNUM 1 \l 1411 So for better or for worse, what you don't get by having individual markets is synergy and efficiency. What you do get is local responsiveness.
LISTNUM 1 \l 1412 COMMISSIONER LANGFORD: Okay. So just tell me then how much news we are getting. We don't have an hour of news. You folks are obviously committed to news. You chose news to show us here in your one clip, your one visual display today.
LISTNUM 1 \l 1413 Perhaps ‑‑ is it Brad? I have forgotten the last name, sorry.
LISTNUM 1 \l 1414 MR. PHILLIPS: Brad Phillips.
LISTNUM 1 \l 1415 COMMISSIONER LANGFORD: Phillips.
LISTNUM 1 \l 1416 Mr. Phillips, perhaps we could go back to you and give me some idea of how much news is to be found in the Breakfast Television show in Vancouver ‑‑ sorry, the Chairman has something he wants to ‑‑
LISTNUM 1 \l 1417 THE CHAIRPERSON: Just before you do that, your answer just now was all focused on City previous management, et cetera. You are taking over. You say our focus is localness and quality production.
LISTNUM 1 \l 1418 Are you going to change this? I mean you said that they didn't have a cookie‑cutter approach, they didn't run it as a network. Are you going to run it as a network? Are you going to try to have a uniform program and how are you going to bring out your greater emphasis on news?
LISTNUM 1 \l 1419 MR. MERSON: It is really a good question and I apologize for sort of mentioning prior management. We think they have made an appropriate ‑‑ found an appropriate balance in the level of central coordination versus local responsiveness in what it is they have done.
LISTNUM 1 \l 1420 We do think one of the bits of magic of City is the fact that it is not a cookie‑cutter approach, that it has been adapted to each one of the local markets, and we would not change that at all.
LISTNUM 1 \l 1421 If you look at their current structure, there is the sort of loose‑tight philosophy that they have where they acquire the American programs centrally and they try to find the right spots for them in each of the markets but their local programming is fundamentally run by local management and is responsive to whatever the local needs are.
LISTNUM 1 \l 1422 So no, we would not change that at all.
LISTNUM 1 \l 1423 THE CHAIRPERSON: (Off microphone)
LISTNUM 1 \l 1424 COMMISSIONER LANGFORD: No problem. No problem. Apparently, we are a team up here. I like it. Bat it around, it gives me time to think.
LISTNUM 1 \l 1425 So we were going to take a look, Mr. Phillips, at the sort of content, and I don't expect you to come down to seconds here or even minutes but just sort of a sense of how big the news hunk is of this ‑‑ what is it ‑‑ about three‑hour window that you have got here in the morning.
LISTNUM 1 \l 1426 MR. PHILLIPS: Right. It is a four hour show. It runs from 6:00 a.m. to 10:00 a.m.
LISTNUM 1 \l 1427 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 1428 MR. PHILLIPS: And throughout those four hours we have news coverage.
LISTNUM 1 \l 1429 I will just give you a small example of last week on one of our shows on ‑‑ I think it was Thursday morning.
LISTNUM 1 \l 1430 We had a news item that Vancouver was voted the most livable city in the world and we had our reporter live at Granville Island talking to people about their reaction to that.
LISTNUM 1 \l 1431 The seawall around Stanley Park was supposed to reopen. It wasn't open. We had visuals of that and coverage of that.
LISTNUM 1 \l 1432 THE CHAIRPERSON: Mr. Phillips, my colleague can't understand you. Can you either speak up or put your mouth closer to the microphone?
LISTNUM 1 \l 1433 MR. PHILLIPS: Certainly.
LISTNUM 1 \l 1434 Shall I repeat that or was that
LISTNUM 1 \l 1435 COMMISSIONER LANGFORD: I just didn't get what Vancouver was the most what in the world, wonderful city or horrible city?
LISTNUM 1 \l 1436 MR. PHILLIPS: Sorry.
LISTNUM 1 \l 1437 COMMISSIONER LANGFORD: I just didn't hear the word.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1438 COMMISSIONER LANGFORD: I mean with the garbage strike it is a fair question, isn't it?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1439 MR. PHILLIPS: I wasn't inspired by the Mayor to bring that particular story forward but that was just an example of a story that we had that was a news item that day and we were down talking to people about their reaction to that.
LISTNUM 1 \l 1440 So we are live on location every morning for breaking news activities.
LISTNUM 1 \l 1441 Out of our four hours, two and a half hours of that is news coverage.
LISTNUM 1 \l 1442 The remainder of the show is a variety of things: performances by local artists, contests, all kinds of things that we think will be appealing to people as they wake up.
‑‑‑ Pause
LISTNUM 1 \l 1443 MR. PHILLIPS: And Rael is reminding me that we run City News International at 6:30 at night.
LISTNUM 1 \l 1444 COMMISSIONER LANGFORD: Okay.
LISTNUM 1 \l 1445 Let me then go to paragraph ‑‑ to try to understand what this means and I don't think I will be much longer ‑‑ paragraph, I think it is 30 ‑‑ let me have a look.
‑‑‑ Pause
LISTNUM 1 \l 1446 COMMISSIONER LANGFORD: Excuse me, I have just ‑‑ I have lost it.
LISTNUM 1 \l 1447 Yes, paragraph 32, sorry, of your supplementary brief, the second bullet or the second point where you talk about your long‑term objectives.
LISTNUM 1 \l 1448 One of them is :
"...to deepen and enhance service to local communities..." (As read)
LISTNUM 1 \l 1449 If you had stopped there, I think I would have had no problem with it.
"...through broader interregional perspectives." (As read)
LISTNUM 1 \l 1450 For some reason that sounds like a contradiction in terms to me because isn't interregional suspiciously like national?
LISTNUM 1 \l 1451 So I just don't think I understand that. Can you tell me how that approach works? How do you broaden what you are calling today local by going into something that is interregional?
LISTNUM 1 \l 1452 MR. SOLE: Commissioner Langford, it is historic. I think when you look at Citytv you will see rebroadcasters in Ottawa and in London. We do not intentionally ignore those interregional stories when they co‑relate or when they reflect on a broader expression.
LISTNUM 1 \l 1453 And the same thing is true with the former Craig stations with Lethbridge and Red Deer.
LISTNUM 1 \l 1454 COMMISSIONER LANGFORD: So it is context, is that what you are saying?
LISTNUM 1 \l 1455 MR. SOLE: It is acknowledging something beyond the metropolitan area of these cities and connectivity to them.
LISTNUM 1 \l 1456 COMMISSIONER LANGFORD: Even in Toronto that happens?
LISTNUM 1 \l 1457 MR. SOLE: Well, there is Ottawa and London coverage from the Woodstock transmitter. There is coverage of ‑‑ I don't like this distinction ‑‑ between 416 and 905, between east and west, the Golden Horseshoe, Cottage Country ‑‑
LISTNUM 1 \l 1458 COMMISSIONER LANGFORD: So it is regional at that level?
LISTNUM 1 \l 1459 MR. SOLE: Yes.
LISTNUM 1 \l 1460 COMMISSIONER LANGFORD: We are not talking about Ontario and ‑‑
LISTNUM 1 \l 1461 MR. SOLE: No.
LISTNUM 1 \l 1462 COMMISSIONER LANGFORD: ‑‑ the western provinces or something.
LISTNUM 1 \l 1463 MR. SOLE: It is contiguous.
LISTNUM 1 \l 1464 COMMISSIONER LANGFORD: Ah! Okay.
LISTNUM 1 \l 1465 THE CHAIRPERSON: Intraregional.
LISTNUM 1 \l 1466 COMMISSIONER LANGFORD: Intraregional as opposed to interregional.
LISTNUM 1 \l 1467 We both had the same Latin teacher 40 years ago but he did better at it than I did actually.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1468 COMMISSIONER LANGFORD: Moving right along, I was struck, when I watched the television show that you gave us here this morning, by the pictures because I couldn't decipher the words. I didn't understand some of them but I am going to have a chat later with commissioners Cugini and del Val.
LISTNUM 1 \l 1469 And I realized ‑‑ even I realized that there were common links between this coverage. There seemed to be something going on at City Hall and a lot of people in their own ways were interested in it.
LISTNUM 1 \l 1470 I wondered to myself whether I could borrow some of the kind of overlap questioning that Commissioner Cugini was talking about on a national level, if I can call it that, on a big priority programming level and bring that down to the local level and I wondered whether there might not be a lot more room for programming synergies there.
LISTNUM 1 \l 1471 You might have to dub some of the language but have you given that any thought?
LISTNUM 1 \l 1472 MR. MERSON: We have given it a lot of thought and we are really fortunate to have Stephen Hurlbut who is in charge of City news here today and Renato Zane who is in charge of OMNI's news here today.
LISTNUM 1 \l 1473 The thing about City is every aspect of the business was as synergized as it possibly could get. I mean there was sort of a multiplicity of uses of a particular piece of footage or programming and it is a level of synergy that is just not attainable to us.
LISTNUM 1 \l 1474 As we look at the news operations you could see ‑‑ and we wanted to demonstrate by that clip just how completely and utterly different the news as it is presented on the stations is.
LISTNUM 1 \l 1475 Firstly, they are in different languages. Secondly, the editorial voice is completely different, they are speaking to different communities with different concerns. And thirdly, the way it is commissioned and the way you send people out to do these kinds of things is so completely different.
LISTNUM 1 \l 1476 Within our own operations we have a number of news operations. We have 680 News in radio and we have OMNI in television and we have Maclean's as a magazine.
LISTNUM 1 \l 1477 If you looked at the level to which there is any sort of cross‑utilization of product or commissioning of footage or stories from those businesses, you would argue that we had failed miserably if there was any attempt.
LISTNUM 1 \l 1478 They are utterly different. They speak to different audiences. It would be catastrophic if we were to try to change or dilute their focus because it is a very competitive world out there and the audience sees right through it.
LISTNUM 1 \l 1479 I want just to hand off to Stephen first to talk a little bit about City and its focus.
LISTNUM 1 \l 1480 Over to you.
LISTNUM 1 \l 1481 MR. HURLBUT: Thanks, Rael.
LISTNUM 1 \l 1482 Mr. Commissioner, City sees itself as the unconventional conventional station but, by and large, we play in the mainstream and for 25 years every night at 6:00 we will watch CTV, CBC, Global, NCH and Citytv at the same time. We do not monitor OMNI. We don't even consider them to be on the same competitive landscape.
LISTNUM 1 \l 1483 We can't service our news programs like Breakfast Television in the style, in the unique style and locally focused ‑‑ I don't want to use the word "edginess" but the manner in which ‑‑
LISTNUM 1 \l 1484 COMMISSIONER LANGFORD: Don't say edginess.
LISTNUM 1 \l 1485 MR. HURLBUT: I won't.
LISTNUM 1 \l 1486 COMMISSIONER LANGFORD: For God's sake, don't say edginess.
LISTNUM 1 \l 1487 MR. HURLBUT: We can't focus our cameras and talk to our reporters if indeed we have to do this in collusion with other operations. We can't do that with the people we compete with, let alone someone whose programs are distinctly narrowcast towards heritage third languages.
LISTNUM 1 \l 1488 For us to effectively fill Breakfast Television and our newscasts, we need completely separate management, news directors, assignment editors, producers, cameramen, reporters.
LISTNUM 1 \l 1489 There are rare special opportunities where we may be able to share rent or a debate, an instance like that where we may go in as a consortium.
LISTNUM 1 \l 1490 Currently, I am negotiating with CTV and Global for the upcoming provincial debate on behalf of the A Channels and City. Should this go through, that would ‑‑ Rogers would take that place.
LISTNUM 1 \l 1491 COMMISSIONER LANGFORD: If I can swing from you ‑‑ and I am very grateful for what has been going on for 25 years. I am really grateful I don't have to watch four screens at once at night. Sometimes I find one almost more than I can bear.
LISTNUM 1 \l 1492 MR. HURLBUT: I know the feeling.
LISTNUM 1 \l 1493 COMMISSIONER LANGFORD: I want to swing now back to the kind of notion of that was then and this is now.
LISTNUM 1 \l 1494 I take your point, Mr. Merson, that the synergies at the same level aren't there but surely there must be some synergies. I mean surely a corporate entity like Rogers is not going to just simply create a whole standalone station in a city like Toronto or Vancouver where it has obvious connections with other stations.
LISTNUM 1 \l 1495 Where are the synergies? Are they with your community channel? Will we see Mr. Goldhawk's show on Citytv now? I mean are there any synergies here at all?
LISTNUM 1 \l 1496 MR. MERSON: We have thought about ‑‑ and I do want to give Renato just a chance to talk about OMNI. He would ‑‑ and I don't mean to steal the words from his mouth but he would tell you that he produces four different newscasts nightly ‑‑ five different newscasts, I apologize, and every one of them is different.
LISTNUM 1 \l 1497 But when you look at the synergies that have been achieved in that regard, what you see is synergy in terms of back office. So you don't need five wires from CNN for your footage for international news, you need one contract with CP News. You can locate everybody in one set of premises.
LISTNUM 1 \l 1498 But essentially, once you pass the back office, there are no synergies. There were no synergies at the OMNI level between the five different newscasts and there will be no synergies beyond that level with the Citytv stations as well.
LISTNUM 1 \l 1499 They have separate editors, they have separate directors, the stories are commissioned separately, the reportage goes out by and large separately depending what the local focus is and what the local events are, and the footage is assembled and produced completely and utterly separately.
LISTNUM 1 \l 1500 As Stephen said, there is going to be the odd occasion, the provincial elections coming up. The provincial government doesn't want to accredit thousands of different news bureaus. They organize their activities together and I think you will see some of that.
LISTNUM 1 \l 1501 Will there be footage that might be developed in one environment that might be used in another environment? It is absolutely possible.
LISTNUM 1 \l 1502 The question for us really is: Will you have any ability to commission those stories on a daily basis in such a way that you coordinate your activities?
LISTNUM 1 \l 1503 And the answer to that is: Absolutely none, there are none, there have not been any in the past and there will not be any in the future.
LISTNUM 1 \l 1504 I didn't mean to steal your thunder, Renato, if you wanted to add anything.
LISTNUM 1 \l 1505 MR. ZANE: Thank you, Rael.
LISTNUM 1 \l 1506 Yes, on the editorial side, absolutely, synergies are very difficult even within one plant like OMNI where we produce five different newscasts in five different languages.
LISTNUM 1 \l 1507 News gathering, technically, is expensive and that is the area where, as Rael says, synergies are possible.
LISTNUM 1 \l 1508 Video and sound is really raw material. Where the contextualization happens is on the editorial side. So with respect to video and sound it makes sense for us.
LISTNUM 1 \l 1509 Currently, City and OMNI both subscribe to CNN feeds for international news, for example. Stephen mentioned fiber lines, satellite feeds. In that area, of course, there are synergies but where the difference is going to be very distinct is on the editorial side.
LISTNUM 1 \l 1510 To give you one example, the Toronto International Film Festival is coming up in Toronto. OMNI has five newscasts and we produce a number of weekend programming in various languages that are not prime ethnic, as we call them, and for the Toronto International Film Festival, we have 12 people accredited representing 10 different editorial voices within OMNI alone.
LISTNUM 1 \l 1511 So the synergy, of course, is in the gathering of certain common video but every one of those reporters is going after a specific angle that is specific to their community. We don't think that is going to change substantially when City becomes the sixth news operation, for example, in the context of Rogers Media.
LISTNUM 1 \l 1512 MR. VINER: If I could just add, Commissioner Langford, you know, at the root of it we are in the audience‑building business, that is what we are about, and so all of our newspeople are concerned about building the biggest audience they possibly can.
LISTNUM 1 \l 1513 So to the extent that we homogenize or dilute that effort, we will be working against those goals. I just wanted to add that.
LISTNUM 1 \l 1514 That clip showed you, I think, that although we were covering the same story, we clearly did it with different crews, we clearly did it with different reporters and we talked to different people. So the synergies in our news coverage are virtually nonexistent.
LISTNUM 1 \l 1515 THE CHAIRPERSON: Stuart, I don't want to cut you off because this is a very important subject but I am also interested in the health of the audience and the panel, so we are going to have a 15 minute health break now. Thank you.
LISTNUM 1 \l 1516 COMMISSIONER LANGFORD: Thank you.
‑‑‑ Upon recessing at 1104 / Suspension à 1104
‑‑‑ Upon resuming at 1124 / Reprise à 1124
LISTNUM 1 \l 1517 THE CHAIRPERSON: Okay, would you please take your seats. We want to resume.
LISTNUM 1 \l 1518 Stuart, I believe you are on local news, continue please.
LISTNUM 1 \l 1519 COMMISSIONER LANGFORD: Thank you very much.
LISTNUM 1 \l 1520 I think we are almost ‑‑
LISTNUM 1 \l 1521 THE CHAIRPERSON: Can we cut the music please? Madam Roy, can you turn off the music please?
LISTNUM 1 \l 1522 COMMISSIONER LANGFORD: Do you mind going over the music? Oh, it is gone, all right. I didn't even notice it, sort of getting ready for Christmas shopping or something.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1523 Of course, when you have three daughters music is a sort of constant companion if you use the word broadly, music I mean.
LISTNUM 1 \l 1524 I think I have covered this. I did mention the one specific question, which I think might have gotten lost in the shuffle, and that is with regard to your community channel, which is your other voice, particularly in Toronto. And you have, for example, the show I mentioned was Goldhawk, which is a very popular show as I understand and very professional show, and would it be possible that you might run that on City in some format?
LISTNUM 1 \l 1525 MR. MERSON: You know, the first words out of my mouth are always never say never, but I can't see the opportunity. We currently don't run any programming from the community channel on OMNI and I can't see why that would be any different with City.
LISTNUM 1 \l 1526 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 1527 MR. MERSON: My instinct is always just to say never say never and I know, you know, you expect us to say give us flexibility, so ‑‑
LISTNUM 1 \l 1528 COMMISSIONER LANGFORD: But it is not something you have even discussed?
LISTNUM 1 \l 1529 MR. MERSON: No.
LISTNUM 1 \l 1530 COMMISSIONER LANGFORD: That kind of, to use that horrible word, synergy, which we seem to be locked onto now, you haven't discussed that kind of possibility?
LISTNUM 1 \l 1531 MR. MERSON: It hasn't come up. We have never done it at OMNI and I can't see how we would do it on City and ‑‑ but my instinct is to say never say never.
LISTNUM 1 \l 1532 COMMISSIONER LANGFORD: Okay. Moving then into the pure notion of synergies ‑‑ and I will be so glad when this line of questioning is over and I think I really only have one. I have listened to you this morning talking about kind of sharing a CP subscription or a line to CNN or whatever, a bit of camera pooling on major political events, that type of thing. I have also heard you this morning talking about, you know, the tightness of even 18 months to divide what has been City and to take your piece away with you.
LISTNUM 1 \l 1533 As you plan that and construct facilities for City, is there no thought given at all then or what thought perhaps is the better way of putting it, is how you can literally make some economics, some savings out of putting together some of your plants? You have got everything from the Shopping Channel and the community channel right through to OMNI and now City.
LISTNUM 1 \l 1534 Are you actually going to out and build a brand new stand‑alone plant for this city or..? And there is no trick to this question, we don't regulate where you situation or what you build or whatever, but it kind of fascinates me that there aren't ‑‑ I know you will never have the synergies, as you said, that MuchMusic and City and everything had. But what is out there, what is available? What is the plan in that kind of sense?
LISTNUM 1 \l 1535 MR. MERSON: We do see some real ability to build some scale. You know, where is it you are looking for scale? You are looking for scale in the back office. Obviously, you want a single traffic department, you want a single accounting department, you want a single human resources department, you want benefit plans to be standardized, those types of things. So there, you know, generally we will be able to exert some synergies.
LISTNUM 1 \l 1536 We see sales synergies so, you know, when you look at television operations there are two distinct types of sales; there is a local sale, which makes up about 20 per cent of total sales and there is national sales that makes up around 80 per cent of the sales. The local sales forces are like local production, they have to hit the ground, you need salespeople who are single‑minded and they focus on the operation and they will, by their nature, be local.
LISTNUM 1 \l 1537 The national sales efforts really can be combined. City had combined them and everyone of the other major broadcasters has combined them into single operations, so we too will be able to combine our national sales efforts for certainly OMNI, City, the specialty channels that we have, possibly Sportsnet, I don't know because it is so different, but there is some room there to build it.
LISTNUM 1 \l 1538 And where that helps you is just in the sense that the agencies are prepared to consider you, they think of you when they think of making a sale. If they have to think about 20 different places they have to go to to get their sales sort of completed, they tend to discount it. So the notion that you are there, you are ready for consideration is important. So national sales efforts will be significant.
LISTNUM 1 \l 1539 Programming and conventional programming, you know, local programming I think we have gone to pains to explain there isn't much potential for synergy. The other two areas of programming; the one is the area that City did such a good job in, which is shared Canadian programming, requires a little bit of thought. You know, I think we have gone to pains to say we think they went too far. Their programming strategy in City laterally became as much driven by the ability or the need to amortize the cost of their programming over multiple sources and we think that has probably gone too far.
LISTNUM 1 \l 1540 But simply in the context of me able to sort of commission that programming and ensure that the best producers of this programming come to you, you will be considered, your heft is important. The final element of programming, as we discussed, is the acquired schedule and the ability to acquire the best non‑Canadian programming and there heft again does help. As we say, it isn't a perfect match, because the one does prime time and the other doesn't do primetime. But having said all that stuff, heft does help.
LISTNUM 1 \l 1541 MR. VINER: If the question though, Commissioner Langford, also included just plain facilities ‑‑
LISTNUM 1 \l 1542 COMMISSIONER LANGFORD: Bricks and mortar.
LISTNUM 1 \l 1543 MR. VINER: Yeah, brick and mortar. You know, OMNI has about 80,000 square feet and it is hard to determine how much of the City operation is actually CityTV, but let us say 60. We think co‑location would be beneficial. The problem I have got is it will cost us $50 million and I am not going to rent a place that I put $50 million worth of equipment into. So we will have to find a place, if we can, and it is by no means certain that we can, that could accommodate the co‑location of the facilities.
LISTNUM 1 \l 1544 The only synergies, as small as they are, that would exist are on the over‑the‑air stations. There is no real other synergies. And those, as we have said, are small enough. So we would like to own a property, we believe that being storefront is important to City and we need to sort of be in the city.
LISTNUM 1 \l 1545 Is it possible that we could do all of the things that Rael said sort of in an office setting, the back office, and combine those and then have different technical facilities? Yes, that is possible. Would you like them together? Yes, we would like them together.
LISTNUM 1 \l 1546 COMMISSIONER LANGFORD: And so under that scenario you would be moving both operations then, you would be looking for a brand new plant that would house both?
LISTNUM 1 \l 1547 MR. VINER: Yes. I think it would be very difficult to move the City operation into the OMNI location. I just don't think we have enough room.
LISTNUM 1 \l 1548 COMMISSION LANGFORD: So you would move them together or in staged moves or however?
LISTNUM 1 \l 1549 MR. VINER: Over time, if we could. I would like to emphasize it is by no means certain that we could do that.
LISTNUM 1 \l 1550 COMMISSIONER LANGFORD: And then why wouldn't you have common facilities in the sense of edit booths, for example, or common direction from one news assignment editor or assignment editors working as teams? Why wouldn't that work?
LISTNUM 1 \l 1551 MR. VINER: For the reason that I tried to explain before. We are in the audience building business to the extent that, you know, sending out a common team dilutes what your programming strategy, new strategy is, it makes no sense.
LISTNUM 1 \l 1552 COMMISSIONER LANGFORD: No, I am not talking about sending out a common team in the sense of journalists, but what about the person who does the sending, the assignment editor? Can you work with a common assignment editor or is that just too much for one person?
LISTNUM 1 \l 1553 MR. VINER: With greatest respect, it doesn't make any sense because each of the communities ‑‑
LISTNUM 1 \l 1554 COMMISSIONER LANGFORD: A lot of what I say doesn't make any sense.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1555 MR. VINER: No, but it doesn't make any sense for us I am trying to say. The communities that we serve have different priorities, so the stories are going to be different that we cover and so having a common assignment editor doesn't make any sense. I am talking as if I am skilled in news, Renato or Stephen should respond to this.
LISTNUM 1 \l 1556 COMMISSIONER LANGFORD: So there really is no need for us to have any concerns about kind of a lack of diversity of voices here in anyway, a lack of originality, a lack of freedom, in the sense we don't have to setup any kind of artificial walls, you guys are going to set them up yourselves is what you are saying?
LISTNUM 1 \l 1557 MR. VINER: Because they are there ‑‑
LISTNUM 1 \l 1558 COMMISSIONER LANGFORD: I don't think we were predisposed to do that. I don't want to cause alarm, but that has happened before in the sense of, you know, separations between different news voices.
LISTNUM 1 \l 1559 MR. VINER: Sure.
LISTNUM 1 \l 1560 COMMISSIONER LANGFORD: But what you are telling me today is, in your opinion, that wouldn't be necessary because it is done ‑‑
LISTNUM 1 \l 1561 MR. VINER: Wouldn't be necessary and we have an economic imperative to ensure that it doesn't.
LISTNUM 1 \l 1562 COMMISSIONER LANGFORD: On the other hand, if we asked you to do it it wouldn't be much of a hardship I guess because you are doing it anyway?
LISTNUM 1 \l 1563 MR. VINER: Yes. Look, it would be interesting to see how you could do that. But certainly, you know, we would be happy to agree to sort of maintaining independent news organizations, so that wouldn't bother us.
LISTNUM 1 \l 1564 COMMISSIONER LANGFORD: All right. Thank you, those are my questions, Mr. Chair.
LISTNUM 1 \l 1565 THE CHAIRPERSON: Okay. Any other questions from any of the other commissioners?
LISTNUM 1 \l 1566 Okay, then let us go onto the next area, which is valuation and I believe, Elizabeth, you are taking the lead?
LISTNUM 1 \l 1567 COMMISSIONER DUNCAN: Yes. We don't have many questions on the valuation, because everything has been very thorough and straightforward.
LISTNUM 1 \l 1568 As you know, that for the purpose of valuing the benefits or determining the benefits the Commission adds the purchase price paid plus adjustments. And in this case we have already added and you have agreed to add the Vancouver and Calgary properties. In addition to that, the Commission adds future amounts to be paid on leases and other commitments. And you advised us that you are not able to provide a pro forma balance sheet. However, we still need to determine a number for the purpose of determining the tangible benefits.
LISTNUM 1 \l 1569 So we are just wondering, in regards to your letter of August 28, item 2(a), if we could have a list of all the CHUM leases and other commitments being assumed by Rogers. And so for that what we would need, for example, would be perhaps the remaining term and the amount left to be paid and a brief description of the item leased or just a general description.
LISTNUM 1 \l 1570 MR. MERSON: We would be happy to do that. I know you are aware of this distinction being capital and operating leases and which ones really apply. So we struggled a little bit with whether this was every single lease that we might possibly have, including a photocopier lease where, you know, ownership never passes of the asset or whether it was stuff that was sort of more long‑term in nature, where there was some dispute about whether the lease itself should be capitalized.
LISTNUM 1 \l 1571 So we struggled a little bit with was it every single lease?
LISTNUM 1 \l 1572 COMMISSIONER DUNCAN: Well, I think it would be useful if you put every lease and if you just put the brief description the, if staff ‑‑ and even if you want to segment it so that you have things that you consider to be more current in one section. But the intent is that any liabilities that you are assuming adds onto the transaction cost. So if there are future payments to be made for those liabilities they get added on. This isn't unique for this instance here, of course, this is ‑‑
LISTNUM 1 \l 1573 MR. MERSON: No and, you know, we heard the discussion in the other hearing as well, and it was a difficult one for us. You know, we know generally accepted accounting principles and I know, Commissioner, you are completely aware of this, you know, requires you to capitalize leases where all of the risks and benefits of ownership actually pass to you in essence irrespective of what the paper actually says and those are the ones that are capitalized.
LISTNUM 1 \l 1574 The other operating leases which are, in the ordinary course of business, are in respect of ‑‑ so the liabilities don't actually exist at the point in time of the transaction, they only crystallize after the transaction is done and after the service is used whether, you know, if it is a lease on a property. So it is difficult to attribute that liability to a point in time. So we have had some difficulty with the concept.
LISTNUM 1 \l 1575 COMMISSIONER DUNCAN: The liabilities actually are ones that you are assuming because you are assuming the leases, so they are liabilities. And in the way it is applied, the Commission calculates the value of the transaction for this purpose as being this or ‑‑
LISTNUM 1 \l 1576 MR. MERSON: We would be happy to supply the leases.
LISTNUM 1 \l 1577 COMMISSIONER DUNCAN: I appreciate that, thank you.
LISTNUM 1 \l 1578 And then further along on that same line with regards to the properties to be leased in the transitional agreement. And I noted your comments about those, but if you could provide us with a schedule detailing the amount that would be allocated, to the best of your ability. So you have a big pool of money, I guess, that you are going to spend on this, if you could give us a list of the properties according to the transition schedule and the amounts that you'd attribute to it we would appreciate that as well.
LISTNUM 1 \l 1579 MR. MERSON: We are happy to do it.
LISTNUM 1 \l 1580 COMMISSIONER DUNCAN: Okay, thank you. I am just wondering too, just on that point, you mentioned that the pro forma balance sheet that we asked for, as I mentioned, is not going to be available until closing. Would you mind at closing then submitting that so we will have a ‑‑
LISTNUM 1 \l 1581 MR. MERSON: Absolutely.
LISTNUM 1 \l 1582 COMMISSIONER DUNCAN: ‑‑ copy of that? Thank you. And with regards to the allocation of tangible benefits that might result as a result of these adjustments, do you have a preference as to how those are allocated?
LISTNUM 1 \l 1583 MR. MERSON: I have to admit we haven't discussed it. Could we think about it quickly and get back to you?
LISTNUM 1 \l 1584 COMMISSIONER DUNCAN: Yes, I am sure that is fine.
LISTNUM 1 \l 1585 THE CHAIRPERSON: Can I come back to this issue of capital leases? I don't quite understand your difficulties. As you mentioned, it is a generally accepted accounting principle. Obviously, accounts have to apply that and they have to use their wisdom and their experience. You have outside auditors, surely you can take your leases, put them into lists and have your outside auditor certify that according to generally accepted accounting principles, these are considered capital and these are considered current.
LISTNUM 1 \l 1586 I don't see why the operational problem here is making the distinction?
LISTNUM 1 \l 1587 MR. MERSON: No, there is none, we are happy to do it.
LISTNUM 1 \l 1588 THE CHAIRPERSON: Any other questions from anybody?
LISTNUM 1 \l 1589 COMMISSIONER DUNCAN: I actually have more questions.
LISTNUM 1 \l 1590 THE CHAIRPERSON: Oh sorry, I thought that you were finished.
LISTNUM 1 \l 1591 COMMISSIONER DUNCAN: That is okay.
LISTNUM 1 \l 1592 So you are going to advise us on how you are going to want any adjustments, if there is any and adjustments of the tangible benefits.
LISTNUM 1 \l 1593 Referring to your answer to 3(b) on that letter where you deal with the allocation of benefits with respect to the Vancouver and Calgary properties. I just want to make sure that I understand here. It appears that you are referring now to a fourth fund, if you like, one that you call the documentary program development. Is it a separate fund or is it actually part of the Allan Waters or..?
LISTNUM 1 \l 1594 MR. STRATI: Currently, there is money for production and there is also money for development in the Allan Waters initiative. This would be an extra element, if you will, that would be an extra ‑‑ a specific million dollars would be towards documentary development and any additional money remaining from that would go back into the 32.5 or the production side of the Allan Waters content initiative.
LISTNUM 1 \l 1595 COMMISSIONER DUNCAN: What is the amount of the current documentary portion?
LISTNUM 1 \l 1596 MR. STRATI: Well, there is a development envelope overall, but there is no documentary envelope so in fact it is creating, if you will ‑‑
LISTNUM 1 \l 1597 COMMISSIONER DUNCAN: Okay.
LISTNUM 1 \l 1598 MR. STRATI: ‑‑ a separate development envelope for documentary.
LISTNUM 1 \l 1599 COMMISSIONER DUNCAN: Okay, thank you. So then I understand that. So then in the second paragraph in that answer can you just clarify how you are proposing to allocate any adjustment that might arise as a result of the difference between the final value of the Calgary property and your preliminary estimate? I am just not quite sure if you want it all to go to the Allan Waters or if you want it to be separated.
LISTNUM 1 \l 1600 MR. STRATI: Commissioner Duncan, just like we did with the development fund phase at a million, any remainder amounts, including any fluctuation between the initial estimate of the Calgary property and additional benefits payable on that would also go towards the production initiative.
LISTNUM 1 \l 1601 COMMISSIONER DUNCAN: Okay, that answers it for me. Thank you very much.
LISTNUM 1 \l 1602 That is it, Mr. Chairman.
LISTNUM 1 \l 1603 THE CHAIRPERSON: Okay. I see a shaking of heads, so I guess there are no more questions on valuation.
LISTNUM 1 \l 1604 Then let us go to the tangible benefits package. And, Helen, you taking the lead?
LISTNUM 1 \l 1605 COMMISSIONER del VAL: Yes, thank you.
LISTNUM 1 \l 1606 I know that we have a letter issued to you regarding the CTF and our Chairman will address that question at the end of my questioning.
LISTNUM 1 \l 1607 I note that your benefits package right now you propose a self‑administration and short‑term funding package. Just focusing on self‑administration right now, can you ‑‑ I know you choose self‑administration for your own purposes ‑‑ but can you just address the issue of how in your view do you think the self‑administration of benefit funds have benefited the Canadian broadcasting system as a whole in a way that third‑party administration of such funds would not have?
LISTNUM 1 \l 1608 MR. MERSON: Thank you, Commissioner del Val. I will answer and then ask Diane to add anything she might want to add.
LISTNUM 1 \l 1609 We think there is a fabulous precedent of self‑administered funds producing the highest quality Canadian priority programming that serves Canadian audiences, and Corner Gas is evidence of it. It is an established method of doing business that really has worked well and has been successful.
LISTNUM 1 \l 1610 There are a couple of other issues for us. There are all the elements of sort of we know our markets, you know, we know what it is we need to develop for our audiences. I feel like I am saying "we" too many times, because your question really is how does it work for the system, why is it in the best interest for the system? We are responsive to our markets, we know what it is that they are looking for, we have the ability to try to sort through numbers of possible applicants to deliver what it is that they need.
LISTNUM 1 \l 1611 And as you look at sort of Canadian broadcasters' ability to actually produce the highest quality Canadian programming outside of these benefit funds, and particularly in a situation like City, you find it is a little limited.
LISTNUM 1 \l 1612 City, for example, is a business that is losing money currently, it is spending roughly a little less than $4 million a year on priority programming, and in the absence of this funding likely would limit the amount of money that it spent on benefits to the $4 million, to what it is that is currently done. It is just lacks within the financial framework within which it works, it lacks resources and the ability necessary to do more with priority programming.
LISTNUM 1 \l 1613 COMMISSIONER del VAL: I am sorry to interrupt, but why self‑administration? I understand the success stories that you point to, but why was self‑administration of the benefits fund an element of that success? Why couldn't a third party administrator achieve the same level of success?
LISTNUM 1 \l 1614 MR. MERSON: I am going to ask Diane just to ‑‑ and perhaps I will finish up as well ‑‑ give her experiences and how it has worked with City to date.
LISTNUM 1 \l 1615 MS BOEHME: Thank you very much. I think one of the key things that self‑administered funds brings to the table is flexibility and certainly in terms of timing. Flexibility, when it comes to broadcast ‑‑ an idea comes to you when an idea comes to you and very often it is tied to performer availability, it is tied to camera availability, technical availability. You have the ability to put a show into production, schedule it the way you are supposed to schedule it and plan your production schedule that way.
LISTNUM 1 \l 1616 For instance, there was an example of a show that we did a few years ago on the Citytv side of things called "American Whisky Bar". It was something that came to us and we decided we were going to make into event programming. We did it in partnerships with an independent producer. It was in fact live television. We went live‑to‑air with it.
LISTNUM 1 \l 1617 It was something that because it was live, because it was time sensitive it would not have met a funding criteria. We would have had to wait to have had it done. The director, who was Bruce Mcdonald, was a very busy feature film director at that time and a funding system that was third‑party administered by its very nature tends to be very highly structured and doesn't allow things that get funded outside of that.
LISTNUM 1 \l 1618 It became a very important program and it was a big event for us at the time and obviously those sorts of flexibilities are something that in a highly structured fund we cannot guarantee how much money is going to come back to us to meet those needs.
LISTNUM 1 \l 1619 COMMISSIONER del VAL: You don't see sort of any structure of third‑party administration being able to overcome that problem?
LISTNUM 1 \l 1620 MS BOEHME: No, I don't. I think a third‑party fund has to be to the benefit of all of the people who are the participants in it, and inevitably "all of the people" means some of the people get excluded when you don't want to fit within those little paradigms.
LISTNUM 1 \l 1621 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 1622 Then focusing on the issue of long‑term versus short‑term funds and a finite fund as what you have proposed. I think since 2000 there have been injections of quite large amounts of finite funds.
LISTNUM 1 \l 1623 So why did you choose a short‑term fund?
LISTNUM 1 \l 1624 MR. MERSON: When we looked, the two elements of the benefit fund, the one of the Craig benefits that remain unspent and the other element is the Alan Waters production fund.
LISTNUM 1 \l 1625 As relates to Craig benefits, I must admit, you know, we have been educated to this process ‑‑ because this isn't a business we are currently in ‑‑ by Diane and by her colleagues at City. But, as she explained to me, the benefits ‑‑ this isn't like walking out and buying something. It takes time to hear applicants, commission the stories, get the programs into production and actually spend the money. The bulk of the money gets spent when the production actually happens.
LISTNUM 1 \l 1626 So the Craig benefits to date, which is a seven‑year benefit program, three years have gone by, really not much has been spent about them. We inherit that obligation. We will spend the remaining benefits over the course of the next four years.
LISTNUM 1 \l 1627 And Diane can speak to you about the program she has in place that will spend that money.
LISTNUM 1 \l 1628 So it is important to recognize it takes a bit of time to commission these stories.
LISTNUM 1 \l 1629 The second element of it is, we do believe City's will need the funding, to be frank. City does not have much of a CTF envelope. It really has almost zero of a CTF envelope. Diane can tell you a little bit more about the history.
LISTNUM 1 \l 1630 So we do need, in order to reinvigorate the priority programming and produce some good‑quality priority programming, we will spend the funds over a short period of time and want to spend them over a short period of time.
LISTNUM 1 \l 1631 If I can just elaborate on the CTF a little bit, it is an irony of City that even though it does this much priority programming it has almost no CTF envelope, and the reason it has almost no CTF envelope is because the bulk of the original production was done within the specialties. So the specialties have significant CTF envelopes and City itself has none.
LISTNUM 1 \l 1632 So we need to spend this money over a fairly short period of time to ensure that City does have the highest quality priority programming available in the service.
LISTNUM 1 \l 1633 Diane, sorry, if you wanted to add any more.
LISTNUM 1 \l 1634 MS BOEHME: Thank you. Yes.
LISTNUM 1 \l 1635 I think obviously to be able to spend the money when you don't have the resources available to you of the Canadian television fund to the same degree means that you need to take time to develop international partnerships, partnerships with other broadcasters within this territory and in other territories, you need to be very nimble on your feet to think about other ways of priority spending like performing arts or variety programming which can generate audiences depending on the kind of programming that you use.
LISTNUM 1 \l 1636 I think the opportunity to spend the money where we can find programs that become commercially viable, that are market‑driven and that establish a base for us in the future, and relationships in the future where you are not necessarily dependent on subsidy money, I think is very important for us.
LISTNUM 1 \l 1637 COMMISSIONER del VAL: I understand from Citytv's perspective why you would choose the short‑term funding, also in terms of what your station needs.
LISTNUM 1 \l 1638 Then, Ms Boehme, could you address the issue of in terms of the Canadian broadcasting system as a whole and what its needs are, what are your views on the necessity of having a mix of both long‑term funds and short‑term funds?
LISTNUM 1 \l 1639 MS BOEHME: I think it is obviously very important to have both. You need a lot of money off the top to be able to seed the future and that is very often what the short‑term funds are best at. That is very often what script and concept and development funds for both documentary and scripted programming are good at is developing things for the future and developing relationships where you could help support a producer to build things that will become market realities. Market realities take time because you get to know your audience over time.
LISTNUM 1 \l 1640 The thing about television that everybody forgets when you are talking about the nuts and the bolts and the wires is it's organic and it grows as you get to know people.
LISTNUM 1 \l 1641 The Citytv's have suffered a little bit from a lack of focus over the last few years and as we get to know the audiences and as we get to know what works ‑‑ I mean there is no such thing as a slam dunk. If there was, every American show that the Americans ‑‑ who have far more resources available to them than we do ‑‑ would obviously be a hit and would perpetuate itself, but you need to find out what works.
LISTNUM 1 \l 1642 Times change, audiences change, and the things that people want, you need to be able to make investments in the near term in order to provide for those that are in the long‑term that will perpetuate themselves.
LISTNUM 1 \l 1643 I don't know if that helps answer your question or not.
LISTNUM 1 \l 1644 COMMISSIONER del VAL: Yes, I think.
LISTNUM 1 \l 1645 MS BOEHME: Okay.
LISTNUM 1 \l 1646 COMMISSIONER del VAL: I will leave the question of CTF aside as our Chair will deal with that issue, but let's not think about the CTF.
LISTNUM 1 \l 1647 What would it do to your benefits package if we said: Okay, why don't you allocate a portion to a long‑term fund?
LISTNUM 1 \l 1648 I'm not talking about CTF. What would the effect of that be on your package right now, sort of if you split into one your self administered short‑term and then another longer‑term fun?
LISTNUM 1 \l 1649 MR. MERSON: So like a foundation of some sort. Right?
LISTNUM 1 \l 1650 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 1651 MR. MERSON: A long‑term fund.
LISTNUM 1 \l 1652 THE CHAIRPERSON: Let me add to that.
LISTNUM 1 \l 1653 When I came and visited Rogers on my stakeholder visits long before this transaction was on, I had a great deal of discussion about the wonderful fund that Rogers ran itself ‑‑ and I believe Mr. Lind is administering it and it's about 18 years in existence and it is a model for other funds, et cetera.
LISTNUM 1 \l 1654 How come this model has not found its way into this submission?
LISTNUM 1 \l 1655 MR. MERSON: The reason is, firstly and foremostly, the precedents established that Canadian broadcasters have used self‑administered benefit funds to really build good, high‑quality programming over the last number of years, so they have done it and they have done it well.
LISTNUM 1 \l 1656 The magnitude of the funding is also a little bit different as we look at sort of what it is you can actually buy with ‑‑ effectively $50 million, because there is $35 million effectively from this fund and $15 million roughly from the ‑‑ I know I will have my numbers wrong ‑‑ from the Craig benefits and you spend it over a seven‑year period of time.
LISTNUM 1 \l 1657 It doesn't give you a ton of latitude and it gives the ability to do perhaps one significant dramatic program, a couple of cheaper programs maybe focus on another initiative of some sort that he might have, but it isn't like it is a foundation that can sort of spit out enough money on an annual basis that might fund the development of a number of significant programs.
LISTNUM 1 \l 1658 You are absolutely correct, you know, this would fund some of our priority spending over the next seven years. At the end of the seven years we are going to have to scramble. Hopefully the business will have turned around at that point and we will be able to afford to step in and do the kinds of quality programming that our audience by then will have become accustomed to, but in the absence of it there probably isn't enough money. I mean, this isn't enough money to make a foundation out of. A number of Canadian broadcasters have done this well over the last few years and it has worked very well for them.
LISTNUM 1 \l 1659 If the question ‑‑
LISTNUM 1 \l 1660 THE CHAIRPERSON: That hasn't answered my question.
LISTNUM 1 \l 1661 MR. MERSON: In answer to the question ‑‑
LISTNUM 1 \l 1662 THE CHAIRPERSON: I mean, Mr. Rogers personally recommended to me the model of the funds and said that is what others should be doing, et cetera. Here you have the opportunity to do it and you are not doing it yourself. So I'm trying to understand what is the distinction between this transaction in the model that your owner himself suggested to me was the right way of doing business.
LISTNUM 1 \l 1663 MR. MERSON: I think the objectives were different at the outset and I assume it's the Telefund in large part that we are talking about.
LISTNUM 1 \l 1664 The Telefund ‑‑ and Robin Mersky is here and she actually administers the Telefund ‑‑ somewhere in the audience ‑‑ and she can speak to sort of the genesis of the Telefund and what it was designed to do, but it has ongoing, stable annual funding that comes as a result of something ‑‑ I can't remember what it was that the cable companies got that they wanted to. So it was an allocation of a benefit that accrued to the cable companies that has gone to fund the Telefund.
LISTNUM 1 \l 1665 I'm out of my depth a little bit over here. So it has ‑‑
‑‑‑ Off microphone / Sans microphone
LISTNUM 1 \l 1666 MR. STRATI: Commissioner, it is just annual ‑‑ the Rogers funds are part of the annual payments that are made. Some go into CTF and certainly some go to the Rogers fund.
LISTNUM 1 \l 1667 So the funding mechanism in terms of the contributions for the Rogers funds is the same as it is for the CTF. So payments are going to CTF and some are going to the Rogers funds.
LISTNUM 1 \l 1668 So when Ray was talking about the annual element to it, is there is an injection every year by the BDUs into it.
LISTNUM 1 \l 1669 THE CHAIRPERSON: But I understood there was also the investment and a refunding element to it, that the fund in effect made equity investment and generated funds which came back to it or something.
LISTNUM 1 \l 1670 Maybe you can explain it in detail.
LISTNUM 1 \l 1671 MS MERSKY: Basically the structure of the Rogers Documentary Fund and the Cable Network Fund are competitive processes where independent producers apply, with broadcast licences from either specialty channels or national broadcast commitments, and it is a competitive process where we make equity investments or grants.
LISTNUM 1 \l 1672 There is a fundamental difference between what we are proposing in a self‑directed fund and what I do. I will go over the differences if you want, but you know ‑‑
LISTNUM 1 \l 1673 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 1674 THE CHAIRPERSON: Please elaborate
LISTNUM 1 \l 1675 MS BOEHME: I think maybe if there is something I can offer, one of the good things about those funds from a production point of view is it tends to be one of the last pieces that you need in order to make your production happen. And there are a number of other doors that you need to knock on before you apply to that fund and it tends to complete the production's financing.
LISTNUM 1 \l 1676 Whereas what we are proposing here means it's one‑stop shopping, you don't necessarily need to complete your financing. It is much easier to get a green light and it is much easier for you to know from a broadcast perspective how to plan your schedule because you know what shows you are going to be able to have available to you.
LISTNUM 1 \l 1677 MS MERSKY: Basically what this model will do is allow us to green‑light projects, fund projects, not be reliant on the deadlines of others, the competitive process.
LISTNUM 1 \l 1678 Basically I think what we have talked about is, without the synergies from the specialties from the CHUM group we are kind of at a loss and we are starting from scratch and we need that flexibility and a benefits package as put forward to create a competitive, attractive, priority programming plan.
LISTNUM 1 \l 1679 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1680 COMMISSIONER del VAL: You might want to reply, come back and think a little ‑‑ give it a bit more thought on why sort of the self‑administered short‑term fund model is also the best for the Canadian broadcasting system as a whole.
LISTNUM 1 \l 1681 Just now down to a little bit more detail. I know you have also described it a bit more in your reply in your August 28th replying.
LISTNUM 1 \l 1682 First, the simplest, script and concept development.
LISTNUM 1 \l 1683 Now, is that $2 million or $2.5 million?
LISTNUM 1 \l 1684 MR. STRATI: Its $2 million.
LISTNUM 1 \l 1685 COMMISSIONER del VAL: $2 million, okay.
LISTNUM 1 \l 1686 MR. STRATI: That's correct. I know it was out. I know I said $2.5 million.
LISTNUM 1 \l 1687 COMMISSIONER del VAL: Great. Okay.
LISTNUM 1 \l 1688 Then for the Alan Waters Fund. So now that is going to be increased because of the adjustment to the valuation.
LISTNUM 1 \l 1689 Now, I know that Commissioner Duncan also addressed the documentary, allocation to the documentary program, so can I confirm then, it is the increase from the adjustment of valuation goes to the Alan Waters content initiative and $1 million of that initiative is earmarked for documentary and then 65 percent of the Alan Waters content initiative goes to Canadian drama?
LISTNUM 1 \l 1690 Is that correct?
LISTNUM 1 \l 1691 MR. STRATI: It's correct.
LISTNUM 1 \l 1692 COMMISSIONER del VAL: Okay. I will come back to this.
LISTNUM 1 \l 1693 Then, now, for the Alan Waters Canadian content initiative and script and concept development, 100 percent of the funds that go into those two initiatives are earmarked for priority programming.
LISTNUM 1 \l 1694 MR. STRATI: That's correct.
LISTNUM 1 \l 1695 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 1696 Then 85 percent of your entire benefits package is for independent production?
LISTNUM 1 \l 1697 MR. STRATI: Correct.
LISTNUM 1 \l 1698 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 1699 Going back to the Alan Waters initiative where you have 65 percent for drama and $1 million for documentary, are there any other specific allocations to other genres of priority programs?
LISTNUM 1 \l 1700 MR. STRATI: No, there are not.
LISTNUM 1 \l 1701 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 1702 For this fund, is it also over seven years?
LISTNUM 1 \l 1703 MR. STRATI: Yes.
LISTNUM 1 \l 1704 COMMISSIONER del VAL: It is. All right.
LISTNUM 1 \l 1705 You have also indicated, I think in your supplementary brief, that 10 percent of the Alan Waters initiative will need to new media initiatives as add‑ons or as stand‑alone projects.
LISTNUM 1 \l 1706 Now, does the 100 percent now dedication to priority programming then replace the 10 percent to new media?
LISTNUM 1 \l 1707 MR. MERSON: I can take a quick crack at it.
LISTNUM 1 \l 1708 Our intention was that and 100 percent be priority programming. We thought some of the programming that we might commission might need we opponents in the sense that they might need conversion into mobisodes or websites attached to them and that is what the purpose of that funding is.
LISTNUM 1 \l 1709 But still these are the priority programming initiatives, but to the extent the producers ‑‑ as I think Maddy described earlier or Leslie described earlier ‑‑ need some additional funding to complete the new media portion of their initiatives, that is what that would be directed to.
LISTNUM 1 \l 1710 COMMISSIONER del VAL: Okay. I understand that now, then.
LISTNUM 1 \l 1711 But in your supplementary brief you had mentioned that the 10 percent for new initiatives would be add‑ons or stand‑alone projects. Now, with 100 percent dedication to priority programming I don't think you can do stand‑alone new media projects, because how would it qualify for priority programming.
LISTNUM 1 \l 1712 Right?
LISTNUM 1 \l 1713 MR. MERSON: That is a very good point.
LISTNUM 1 \l 1714 MR. STRATI: It is likely that it would still be tied to the production, the projects we are working on with the producers.
LISTNUM 1 \l 1715 COMMISSIONER del VAL: Yes. But I just need a commitment that it will not be to stand‑alone media projects.
LISTNUM 1 \l 1716 MR. STRATI: Yes. Yes.
LISTNUM 1 \l 1717 COMMISSIONER del VAL: That is confirmed?
LISTNUM 1 \l 1718 MR. STRATI: Yes.
LISTNUM 1 \l 1719 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 1720 You would also have 10 percent to niche services. That remains the same?
LISTNUM 1 \l 1721 In your supplementary brief, I think it is page 30 ‑‑
LISTNUM 1 \l 1722 MR. STRATI: That's correct. Yes.
LISTNUM 1 \l 1723 COMMISSIONER del VAL: Okay. Great.
LISTNUM 1 \l 1724 MR. MERSON: Alain just reminded me of sort of the new initiatives and what were the new initiatives. Really what we had in mind was promotion of priority programs. So to the extent that a producer wanted to promote the priority programs using the new media, we wanted the ability to help develop the creative that would be used in that environment to promote the priority program. So essentially still tied into priority 100 percent, but it was just to be able to describe what that was.
LISTNUM 1 \l 1725 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 1726 I did note between the exchange between Ms Boehme and Commissioner Cugini that you really don't have a formal process for funding.
LISTNUM 1 \l 1727 Now, in your supplementary brief at paragraph 118 you did mention that details of funding criteria will be written, will be published, and then you will have the requirement to achieve Canadian content status according to CAVCO.
LISTNUM 1 \l 1728 Now, is there any other criteria that will be in there right now that you are aware of?
LISTNUM 1 \l 1729 MS BOEHME: Sorry, ma'am. When you say "criteria" you are speaking of what kinds of information the producer will need in order to apply for support from us?
LISTNUM 1 \l 1730 COMMISSIONER del VAL: Yes, and how he would qualify to get your funding.
LISTNUM 1 \l 1731 MS BOEHME: How he would qualify?
LISTNUM 1 \l 1732 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 1733 MS BOEHME: Okay. Well, obviously it has to be a Canadian independent producer or, in the case of some of our development support it has to be a Canadian writer. That is something that is very important to us.
LISTNUM 1 \l 1734 What typically happens is that we publish a page or so on our website. This is what we have done in the past and what we have found to be very effective, is that there is contact information with phone numbers and e‑mails of the relevant production executives and an outline of if you are applying for development support you need to submit the following, which would be a development budget that is relevant to your production, something that outlines what stage of development you are at now, some CVs of the key creative personnel who are associated with the show, as well as a budget for what you think it is going to cost you to go through development and what it is that you would like to achieve.
LISTNUM 1 \l 1735 These are fairly industry‑standard kind of things that people are asked to submit.
LISTNUM 1 \l 1736 On the production side of things there would be a similar list that would be outlined for the producer. We need a production budget, you would need some CVs and of key creative above the line personnel, actors, directors, anyone who is associated with the project, some indication if it is a theatrical feature film for instance, do you already have distribution? You supply those documents and then there would be and evaluation process and a contact person to follow up.
LISTNUM 1 \l 1737 Now, at every point in time we usually ‑‑ there have been occasions where we have acquired additional information from the producer and then it is just a phone call after that.
LISTNUM 1 \l 1738 MR. STRATI: Commissioner del Val, just to finish off, for the OMNI.2 funds, the production issues that we have at OMNI, we have certainly established a similar process, we have website and it is certainly the same information, the same guidelines in terms of establishing for development and production.
LISTNUM 1 \l 1739 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 1740 Now then, regional proposals. You did mention that you would encourage proposals from the different regions.
LISTNUM 1 \l 1741 Are you setting any targets for how many projects or proposals you would aim to solicit from the regions, how many you would approve, or is there a target for how much money will be allocated for projects from different regions?
LISTNUM 1 \l 1742 MS BOEHME: Obviously the money that is associated with the Craig Media Benefits that are specifically allocated to Alberta and Manitoba remain so, so that if you use the thumbnail off that being money that is earmarked specifically for the prairies, the other money will predominately fall with the rest of the territories.
LISTNUM 1 \l 1743 Now, how that gets allocated between, say, Toronto and Vancouver is very subject to the kinds of and the nature of and the volume of submissions that we have had in the past.
LISTNUM 1 \l 1744 We haven't set hard targets that way, and that should those benefits still be available and the money has not been spent and committed, then obviously any prairie‑based producers who have a good idea once the Craig Media Benefits have been exhausted are obviously people that we are still going to want to talk to.
LISTNUM 1 \l 1745 COMMISSIONER del VAL: I would like to leave aside the CHUM and Craig benefits right now.
LISTNUM 1 \l 1746 MS BOEHME: Sure.
LISTNUM 1 \l 1747 COMMISSIONER del VAL: I will have some questions for those unspent benefits, but just on the new fund that you are creating, how will the regions benefit from that funding? Will you have funds earmarked for the regions, say from the Alan Waters Canadian ‑‑
LISTNUM 1 \l 1748 MR. SOLE: It's a national fund. We think there is an inherent representation in Toronto, Winnipeg, Calgary, Edmonton and Vancouver. Our ability to tell people the fund is available will be balanced through those markets to tell them that it is there, and we have not in any way subdivided that money into specific geographic mandates.
LISTNUM 1 \l 1749 COMMISSIONER del VAL: You have no intention to?
LISTNUM 1 \l 1750 MR SOLE: We think we want to be fair on a national basis. We are inherent to those markets, it will be important to us to do it just as a matter of reflecting our licences.
LISTNUM 1 \l 1751 MR. STRATI: I think, Commissioner del Val, there is also an impetus to work within the regions specifically because we are 100 percent priority, so certainly there is an interest to work with the region to develop regional programs.
LISTNUM 1 \l 1752 I know that Diane has talked about for example a reality producer in Winnipeg. So there are different categories, different opportunities to work with the regions and producers from those regions as well.
LISTNUM 1 \l 1753 COMMISSIONER del VAL: Now, over the seven years do you have a payment schedule to pay out the benefits?
LISTNUM 1 \l 1754 I'm just talking about the new package, I'm not talking about the CHUM Media right now.
LISTNUM 1 \l 1755 MR. MERSON: We haven't proposed one.
LISTNUM 1 \l 1756 If you look at our record and the record of the OMNI Documentary Fund we have largely spent the money proportionate to the years to which the fund was dedicated. I think you would see we probably have spent a little bit ahead of the years in terms of proportions on the OMNI Documentary fund, so we think we have a long history of actually spending sort of what we promised in an orderly fashion.
LISTNUM 1 \l 1757 We all looked at the Craig benefits and went "Boy, why aren't these things spent?", particularly since we inherited the obligation.
LISTNUM 1 \l 1758 Diane has sort of gone to pains to sort of explain to us just how the process works and why have these are feature productions and they are not like simply commissioning something simple. They do take time and they take a bit of time to evolve.
LISTNUM 1 \l 1759 So it is a little bit of a new area for us because we have never been at it, but all of our track records suggest we are going to spend this in as orderly a fashion as possible.
LISTNUM 1 \l 1760 The reality is, we need the programming and we are going to have to get out there and commission it as quickly as we can.
LISTNUM 1 \l 1761 Diane, I'm not sure if you wanted to add anything?
LISTNUM 1 \l 1762 COMMISSIONER del VAL: I mean, my concern does arise from the fact that only 7 percent of the CHUM/Craig funds have been spent to and it has been how many years.
LISTNUM 1 \l 1763 So I acknowledge the fact that your OMNI experience has been different.
LISTNUM 1 \l 1764 So are you willing to commit to sort of a more timely disbursement of the funds, not in terms of a condition of licence but an expectation or an encouragement?
LISTNUM 1 \l 1765 Yes?
LISTNUM 1 \l 1766 MR. MERSON: Yes, we would be happy to.
LISTNUM 1 \l 1767 You know, we are not sure what it is is our problem. We know there is sort of a ramp‑up as you take the proposals and how these things work.
LISTNUM 1 \l 1768 So it is something if we had an answer to we would give it to you because it is a little bit of a hit and miss process in terms of the development of the programming.
LISTNUM 1 \l 1769 But absolutely we are committed to spending it, so if there was some sort of rational way of allocating the timing, we would be happy to do that.
LISTNUM 1 \l 1770 If you need to know more, again Diane is intimately familiar with the Craig benefits.
LISTNUM 1 \l 1771 MR. STRATI: Certainly the OMNI ‑‑ and reports were filed and will show the trending, if you will, on expenditure. The first year was a little bit lower because, as Diana explained, you are gearing up, you are working with producers, you are working with the first licence to be going forward.
LISTNUM 1 \l 1772 We had a commitment to do a large cross cultural drama in year two, so there was a very big spike of $7 million in year two.
LISTNUM 1 \l 1773 But then from there you do see consistent about $4 or $5 million being paid out in license fees for dramas and documentaries at OMNI.
LISTNUM 1 \l 1774 So it has been very consistent, but you see a little bit ramping up and then consistently finishing out the funds.
LISTNUM 1 \l 1775 COMMISSIONER del VAL: The Chair just prompted me: Would you object to, say, having a minimum spending requirement?
LISTNUM 1 \l 1776 MR. STRATI: No.
LISTNUM 1 \l 1777 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 1778 Could you make a proposal on what the minimum spending per year should be?
LISTNUM 1 \l 1779 MR. STRATI: Absolutely.
LISTNUM 1 \l 1780 COMMISSIONER del VAL: Now, I noted ‑‑ I'm sorry, Mr. Viner, you wanted to add something?
LISTNUM 1 \l 1781 MR. VINER: No.
LISTNUM 1 \l 1782 COMMISSIONER del VAL: Sorry.
LISTNUM 1 \l 1783 Now, you are very clear in your application that there will be no administration fees for the Alan Waters Canadian Content Initiative. I am moving now to the script and concept development which is $2 million ‑‑ yes, which is $2 million.
LISTNUM 1 \l 1784 Are their administration fees on that one?
LISTNUM 1 \l 1785 MR. STRATI: There will be no administration fees for any of the benefits.
LISTNUM 1 \l 1786 COMMISSIONER del VAL: I have the same sort of concerns and questions about the payment schedule.
LISTNUM 1 \l 1787 Would you be willing to sort of commit or propose a minimum payment schedule that you would try to adhere to?
LISTNUM 1 \l 1788 MR. MERSON: Absolutely.
LISTNUM 1 \l 1789 COMMISSIONER del VAL: Okay, great.
LISTNUM 1 \l 1790 And the criteria for the script and content development, can you maybe describe that for me?
LISTNUM 1 \l 1791 I know that it is for Canadian writers only. How would they qualify?
LISTNUM 1 \l 1792 MR. STRATI: Just to clarify, it is for Canadian writers and for producers as well. What we did is have the opportunity to work both with projects that had producers tied to them and also writer‑only projects.
LISTNUM 1 \l 1793 COMMISSIONER del VAL: All right. I thought that you had amended it to writers only.
LISTNUM 1 \l 1794 MR. STRATI: I believe I had amended it to clarify that writers only could participate as well, but I can check that quickly.
LISTNUM 1 \l 1795 COMMISSIONER del VAL: Oh, I see what you mean. Yes, okay. Thank you.
LISTNUM 1 \l 1796 MR. STRATI: Yes.
LISTNUM 1 \l 1797 MS BOEHME: So as far as the criteria of how someone would apply, other than a practical information that they would need to submit, obviously there is, because of the nature of what Citytv is, we would have to put some parameters around the kinds of shows that we would be most interested in supporting, where for instance we wouldn't be interested in supporting family‑oriented shows, we are more interested in adult‑oriented programming.
LISTNUM 1 \l 1798 We would be interested not in material for children, we are interested in priority programming for prime time, so that sort of criteria we would put on things.
LISTNUM 1 \l 1799 Other than that, it is really ‑‑ we wouldn't ‑‑ you know, we are supporting 13 half hours, it could be hours, we don't really want to put a limit around the kind of creative work that we are looking for because we don't know what is going to be the right idea and what is going to work when it works.
LISTNUM 1 \l 1800 But there are certain things that Citytv wouldn't look for where we obviously wouldn't look for magazine style shows, we wouldn't look for fishing shows or cooking shows or any of those sorts of parameters.
LISTNUM 1 \l 1801 So it is going to be drama, it is going to be feature film, it is going to be theatrical length made for television movies, fiction, and certain other priority categories that we think we are going to have some resonance with our audience. That would also be indicated on the website as to the kind of material that we are interested in.
LISTNUM 1 \l 1802 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 1803 I know that the Chair had touched on this question a bit.
LISTNUM 1 \l 1804 On the productions that are funded by your benefits package, so you would have ‑‑ and I sort of want to also pursue I think what Mr. Merson had said, that you absolutely want to protect your rights of exhibition.
LISTNUM 1 \l 1805 How do you normally negotiate the exhibition rights with the producers whom you fund? Is it exhibition exclusively on only Rogers' windows and for how long? And is it on all of the different Rogers' platforms and broadcasting channels?
LISTNUM 1 \l 1806 MR. MERSON: Again, this is an area in which we are being educated. We don't know much about this because we haven't really done much of this in the past. So really we have taken our direction from Diane and I would ask her to add some comments.
LISTNUM 1 \l 1807 But what she has educated us to at this point is the multiple different legal constructs that you might get into that describe what it is that you are actually owning. She has a bunch of examples.
LISTNUM 1 \l 1808 MS BOEHME: Thank you.
LISTNUM 1 \l 1809 The negotiation is typically for rights to exhibit the material within the Citytv group of families or any other that we would find that the project might be relevant on. Our plan is obviously for Citytv.
LISTNUM 1 \l 1810 In the case of something like a theatrical feature film, for instance, we would therefore only be taking conventional television free over the air rights. We don't have a platform to exhibit those sorts of things that are not on conventional television.
LISTNUM 1 \l 1811 We would obviously insist on exclusivity during the window. The length of that window and the term and the number of plays would be negotiated at the time and is very much dependent on how much we would pay, and the attractiveness of the property to us is a thumbnail to that too. We obviously pay more to get more.
LISTNUM 1 \l 1812 As for other windows and other forms of exhibition and other media, it is a new area. We are all trying to figure this out at the same time, but we are certainly negotiating our ability to exhibit on other platforms certain aspects of any of these productions. And they tend to be taken on a case by case basis.
LISTNUM 1 \l 1813 You don't have the same value for a four‑year window that you would have for an 18‑month window.
LISTNUM 1 \l 1814 MR. MERSON: And, sorry, just to add to it. I guess I misspoke a little bit and Leslie pointed it to me.
LISTNUM 1 \l 1815 We have done quite a bit of this in the Omni Fund. Malcolm Dunlop, who has done the commissioning of the Omni Fund, is here and can describe some of the deals that he has done out of the Omni Fund.
LISTNUM 1 \l 1816 MR. DUNLOP: Sure. Thank you, Rael.
LISTNUM 1 \l 1817 When we have producers do the projects, they actually own the project themselves. We license the project from them for designated periods of time, but they own all the licence rights.
LISTNUM 1 \l 1818 We do have the right to run it on Rogers' properties, but we do also allow producers to sell to other Canadian properties or internationally.
LISTNUM 1 \l 1819 COMMISSIONER DEL VAL: So you allow them to sell to other Canadian broadcasters simultaneously, for exhibition simultaneously, as they broadcast on ‑‑
LISTNUM 1 \l 1820 MR. DUNLOP: We generally take the first window but we will allow them to run on other properties. For example, we've had a number of projects run on CBC.
LISTNUM 1 \l 1821 The reason for that is because we are just a regional service and we thought it was a benefit for the producer to be able to be seen on CBC.
LISTNUM 1 \l 1822 COMMISSIONER DEL VAL: Thank you.
LISTNUM 1 \l 1823 Moving on to your industry initiatives, the $3 million, is there an administration fee there?
LISTNUM 1 \l 1824 MR. DUNLOP: No, there is not.
LISTNUM 1 \l 1825 COMMISSIONER DEL VAL: Could you do the same regarding payment schedule and a proposed minimum payout for those as well?
LISTNUM 1 \l 1826 MR. MERSON: Absolutely.
LISTNUM 1 \l 1827 COMMISSIONER DEL VAL: Great; thanks.
‑‑‑ Pause
LISTNUM 1 \l 1828 COMMISSIONER DEL VAL: Incrementality. To ensure incrementality, we need to establish a baseline for programming expenditures.
LISTNUM 1 \l 1829 How would you propose to establish that baseline?
LISTNUM 1 \l 1830 MR. MERSON: A baseline was established for CHUM at the time of the Craig acquisition, of $4.1 million. When you look at what they have actually spent in priority over the last number of years, it has been a little less than $4.1 million. They haven't spent to the baseline level.
LISTNUM 1 \l 1831 We are proposing to go back to that $4.1 million baseline and simply calculate incrementality from the 4.1, just to avoid any debate about where it might actually be.
LISTNUM 1 \l 1832 COMMISSIONER DEL VAL: You want to use the same baseline as established for CHUM in 2004 for your new benefits package now?
LISTNUM 1 \l 1833 MR. MERSON: The reason for that is it was the highwater mark that they achieved. So $4.1 million was the highest level they got their priority spending to. In subsequent years they have spent below that.
LISTNUM 1 \l 1834 We are suggesting going back to the highwater mark just to have no debate about what the point of incrementality is.
LISTNUM 1 \l 1835 COMMISSIONER DEL VAL: Okay.
LISTNUM 1 \l 1836 I know that you had offered to file the annual reports in your supplementary brief. I'm sure you are familiar with the CHUM/Craig decision.
LISTNUM 1 \l 1837 Would you be willing to make the same commitments as to what the annual reports will contain in terms of establishing the baseline and the annual reporting on the progress of spending on the initiatives?
LISTNUM 1 \l 1838 MR. STRATI: Absolutely. We do the same thing with Omni currently.
LISTNUM 1 \l 1839 COMMISSIONER DEL VAL: On unspent benefits from the 2004 CHUM and Craig ‑‑ and thank you for your Appendix 3 to your supplementary brief ‑‑ there were four initiatives left over from the CHUM/Craig that we are not clear about as to whether all the allocated amount has been spent.
LISTNUM 1 \l 1840 The four are ‑‑ and I don't expect the answers right now: Aboriginal Voices Radio; Media Awareness Network; National Screen Institute; and Women in Film and Television Toronto.
LISTNUM 1 \l 1841 MR. STRATI: I can confirm, Commissioner del Val, all four have been paid in full.
LISTNUM 1 \l 1842 COMMISSIONER DEL VAL: Thank you.
LISTNUM 1 \l 1843 Also, I think it was in your most recent response that you offered to provide an updated expenditure report on the CHUM and Craig transaction.
LISTNUM 1 \l 1844 When do you think you can provide that?
LISTNUM 1 \l 1845 MR. STRATI: This has been a little bit non‑current. We could verify and get back relatively shortly, certainly by the end of the week or thereabouts.
LISTNUM 1 \l 1846 COMMISSIONER DEL VAL: Thank you.
LISTNUM 1 \l 1847 As you have mentioned, only 7 per cent of the CHUM/Craig benefits package has been spent.
LISTNUM 1 \l 1848 You did mention in your reply of August 13th that you expect to disburse in roughly equal parts during each broadcast year.
LISTNUM 1 \l 1849 So you would be comfortable if we put that in the decision as an expectation?
LISTNUM 1 \l 1850 MR. MERSON: Yes, absolutely.
LISTNUM 1 \l 1851 COMMISSIONER DEL VAL: Would you also be prepared to provide a minimum payment schedule again?
LISTNUM 1 \l 1852 MR. STRATI: I would be glad to.
LISTNUM 1 \l 1853 One of the issues again, as we talked about before, is the first year might be a little bit lower in terms of that minimum because of the ramp‑up. But certainly we would get that quickly.
LISTNUM 1 \l 1854 COMMISSIONER DEL VAL: Also, you have stated that your intention is to have spent those by the 2010 and 2011 broadcast year.
LISTNUM 1 \l 1855 MR. MERSON: Yes.
LISTNUM 1 \l 1856 COMMISSIONER DEL VAL: So you can have a payment schedule that ends then?
LISTNUM 1 \l 1857 MR. MERSON: Absolutely.
LISTNUM 1 \l 1858 COMMISSIONER DEL VAL: In your reply of August 13th, Reply No. 1, you said at paragraph 22 that the $4.2 million to establish bureaus in Red Deer and Lethbridge ‑‑ that was from the CHUM/Craig benefits ‑‑ you proposed to redirect those to support other local programming initiatives for Citytv stations in western Canada.
LISTNUM 1 \l 1859 Can you give us a little bit more detail, like how much, to which initiatives and for which western Citytv stations?
LISTNUM 1 \l 1860 MR. MERSON: We are fortunate to have Al Thorgierson with us, who oversees the Calgary, Edmonton and Winnipeg stations. So I will ask Al just to add a little bit of colour.
LISTNUM 1 \l 1861 During the course of our discussions with the City management, Al had sort of conveyed to us that there was more money allocated to the bureaus than what he could possibly spend. They didn't require that much money and that what we should do is go back and find some worthy local initiatives to dedicate the money to. He could do with much less.
LISTNUM 1 \l 1862 So it was the genesis of the proposal. I will ask Al to add a bit more detail to that.
LISTNUM 1 \l 1863 MR. THORGIERSON: Thanks, Rael.
LISTNUM 1 \l 1864 We are having issues spending that kind of money in those particular markets. Alberta being a very competitive market and the employment situation being what it is in Alberta, we tend to lose our bureau employees to larger stations and bigger markets on a fairly regular basis.
LISTNUM 1 \l 1865 Also, we want to make sure that we are utilizing the dollars to put new information and new programming on the screen. So we are incubating a few ideas out in Alberta right now, one of them being "Your City", which is an evening news block.
LISTNUM 1 \l 1866 We also would look at the potential of producing another half‑hour program out of say Medicine Hat or perhaps a Fort McMurray, Grande Prairie, that type of thing.
LISTNUM 1 \l 1867 The next extension would be to incubate the ideas in those programs and move them into some of the other stations, such as Winnipeg or perhaps Vancouver.
LISTNUM 1 \l 1868 THE CHAIRPERSON: I don't understand the logic of that answer. I'm sorry.
LISTNUM 1 \l 1869 You are in a competitive market and you are losing employees, and then you have too much money? I would have thought just the opposite; that you would need all that money in order to retain employees and generate stuff for your programs. It is a logical disconnect that I'm not making.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1870 MR. MERSON: I think there are two aspects. The one aspect was the fact that just to fund the bureaus wouldn't use up that much money. That is the first aspect.
LISTNUM 1 \l 1871 And then Al, during the course of sort of actually trying to staff the bureaus, has had difficulty just staffing the bureaus. I guess he could pay more, and I assume he has tried that.
LISTNUM 1 \l 1872 But even taking the bureaus as fully staffed won't take that much money, and it is suggested that we reallocate the benefits to something more useful.
LISTNUM 1 \l 1873 Commissioner del Val asked what exactly are those initiatives. We haven't solidified them yet. We would like to come back to you with a proposal on what they might be.
LISTNUM 1 \l 1874 COMMISSIONER DEL VAL: So the idea is not to abandon the Red Deer/Lethbridge bureaus. You would still establish those, but from what you see now, there will be money left over and you will come back to us with a proposal for how to spend the remainder of the $4.2 million.
LISTNUM 1 \l 1875 MR. MERSON: Exactly.
LISTNUM 1 \l 1876 COMMISSIONER DEL VAL: When do you believe that you would be in a position to make a proposal on how to spend the left‑over money?
LISTNUM 1 \l 1877 MR. MERSON: You know, it is difficult because we are not managing the CHUM stations so we are not in there currently. At the very least, within a month or two after, if we are approved and moving stations, we would have some good ideas for what to do.
LISTNUM 1 \l 1878 The other thing is we do come before you in two years' time with a licence renewal application, so it is another time to take a look at it, if you like.
LISTNUM 1 \l 1879 We would be happy to present a proposal in fairly short order.
LISTNUM 1 \l 1880 COMMISSIONER DEL VAL: All right.
‑‑‑ Pause
LISTNUM 1 \l 1881 COMMISSIONER DEL VAL: Those are my questions; thank you.
LISTNUM 1 \l 1882 Thank you, Mr. Chair.
LISTNUM 1 \l 1883 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1884 I lost count of how many funds you are running: Omni Fund, City Benefit Fund; the existing Rogers Fund; the Craig Fund; the Allan Waters Fund.
LISTNUM 1 \l 1885 I presume you are going to rationalize and have a fund section in your enterprise which will deal with all of these, or are these run as separate entities using separate staff and so on?
LISTNUM 1 \l 1886 MR. MERSON: These have always been run as separate entities to date. So Robin has nothing to do with Malcolm and they can issue based on what their own mandate is and will remain the same. Diane would be responsible for this fund and Malcolm would still continue to oversee the Omni Fund in the future.
LISTNUM 1 \l 1887 THE CHAIRPERSON: Do you find that is an efficient way of running it?
LISTNUM 1 \l 1888 MR. MERSON: Yes, it's like localness. You can dilute localness or you can focus on the stuff that really makes your money and how it works best. And we found that is the way it has worked best for us.
LISTNUM 1 \l 1889 THE CHAIRPERSON: In terms of application forms and processes, are there commonalities there or do people have to each time sort of adapt to a different way of doing business?
LISTNUM 1 \l 1890 MR. MERSON: You know, I shouldn't speak for Malcolm or Robin, but from what I have heard from them, the proposals are proposals in the nature of ‑‑ it is not bureaucratic. The proposals are in the nature of a proposal, a conversation, a phone call, a posting on the internet they come in and pitch.
LISTNUM 1 \l 1891 Diane, I'm not sure if you want to add anything to that.
LISTNUM 1 \l 1892 THE CHAIRPERSON: Don't misunderstand me. I'm not trying to suggest anything. I'm just surprised here. In merging enterprises, the first thing you try to do is find efficiencies, commonalities and cut out overlap.
LISTNUM 1 \l 1893 And since you have all these funds running, at least on a superficial basis it seems there are some efficiencies to get, some commonalities here, et cetera. That's why I'm surprised at your answers.
LISTNUM 1 \l 1894 So educate me why this is the best way of doing it.
LISTNUM 1 \l 1895 MR. MERSON: Might we standardize some of the bureaucratic aspects of the process? Probably when we get around to it, absolutely.
LISTNUM 1 \l 1896 Ultimately, there are different funds of the different mandates, you know. They seek to do different things and there is usually people who are imbedded in the various operations themselves that have a focus on what they need and what they're trying to achieve and that's the reason, you know, we have managed them separately to date and we anticipate managing them separately in the future.
LISTNUM 1 \l 1897 Clearly there is some bureaucratic processes that we could probably standardize, but to be frank, we haven't thought about them here.
LISTNUM 1 \l 1898 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1899 MR. STRATI: We probably would, for the correct media and the Citytv funds. I mean, those funds, there is an opportunity there, you know, how many funds certainly work independently with OMNI staff and programming people in terms of opportunities.
LISTNUM 1 \l 1900 The Rogers Funds are recognized and have to be administered as a third party fund. It's a requirement.
LISTNUM 1 \l 1901 So, if you look at the three, you will probably have an OMNI Fund, a City Fund and the Rogers Funds.
LISTNUM 1 \l 1902 The Rogers group of funds are administered separately. OMNI and City, there may be some opportunities to really talk about some bureaucratic, opportunities to sort of cut things down, but certainly there is ‑‑ on the programming and decision‑making side, it's important that they both work with the mandates.
LISTNUM 1 \l 1903 THE CHAIRPERSON: Thank you. Stuart, have you got a question?
LISTNUM 1 \l 1904 COMMISSIONER LANGFORD: Yes, thanks very much.
LISTNUM 1 \l 1905 Just along the same lines, I'm just trying to get a sense of how money gets spent in total on programming. Let me just review very quickly. If I understand this correct, if I've got this right, there is about 35 million, which is the Allan Waters Fund and that's going to priority programming. And then, we have about 15, you reckon, million round numbers left over from the CHUM‑Craig.
LISTNUM 1 \l 1906 Is that going to priority programming as well? In the West I know, but is it priority programming as well?
LISTNUM 1 \l 1907 MR. MERSON: That's the priority portion.
LISTNUM 1 \l 1908 COMMISSIONER LANGFORD: Right. And then, you ‑‑ so that's 50. And then, if I understand you correctly, you've undertaken in terms of defining incrementality, to spend out of your own pockets ‑‑ it's already your own pockets ‑‑ but out of your own kind of day‑to‑day business expenditures, another 4.1 million per year on priority programming? So, that's 28.7.
LISTNUM 1 \l 1909 We're getting really close to 80 million dollars here over the next seven years. Will that all be spent by the same group or will that somehow whether following up on the Chairman's question, are we now going to have kind of three funds, three groups?
LISTNUM 1 \l 1910 How will that work spending this 78.7 million over seven years?
LISTNUM 1 \l 1911 MR. MERSON: That will be one group. I mean, that is simply out of the accumulation that is now the City and Craig stations. Their mandates are the same, their party is the same and their objectives is the same. So, yes, it will absolutely be spent out as a single group.
LISTNUM 1 \l 1912 COMMISSIONER LANGFORD: So, let's just assume that ‑‑ I deem Mr. Engelhart doesn't really seem to have much to do over there today. To be the head hunt show of spending on priority programming, would he administer these three sources of money for priority programming?
LISTNUM 1 \l 1913 MR. MERSON: Yes, he would. As it was there are cheques and balances and it isn't as if he is not there with the cheque book and that unilaterally he can get out and sort of simply spent the money and there are cheques and balances and there are approval processes.
LISTNUM 1 \l 1914 COMMISSIONER LANGFORD: Right. No, I am not worried about him going and buying a Mazura out here.
LISTNUM 1 \l 1915 MR. MERSON: Yes.
LISTNUM 1 \l 1916 COMMISSIONER LANGFORD: I am just trying to figure out. I am trying to figure out how this works in the real world because it seemed to me that you were talking about three funds, but now we really are talking about one pool of money, aren't we, and over seven years some group of employees at Rogers will spend 78.7 million dollars on priority programming.
LISTNUM 1 \l 1917 Is that right?
LISTNUM 1 \l 1918 MR. MERSON: That is absolutely right here. Just to add a bit more background. CHUM already has development offices who work for Diane out of Edmonton and Vancouver. So, there is ‑‑ there is an organization. It isn't as if it's Diane a long time, it has been an organization of ex‑rep.
LISTNUM 1 \l 1919 COMMISSIONER LANGFORD: Right. I wasn't in any way trying to give your job away, Diane. I was just trying to get Mr. Engerhart's attention.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1920 COMMISSIONER LANGFORD: So, that answers my question. Thank you very much.
LISTNUM 1 \l 1921 THE CHAIRPERSON: Okay. Let's go to the CTF. You know, within your letter on the 20th of August suggesting that we would ask you this question because the CTF task force looked at the whole issue of CTF and found out that ‑‑ came to the conclusion of benefits which you are paying was some sort of transfer of ownership and should really be there for the benefit of the whole system, not for the benefit of just one company.
LISTNUM 1 \l 1922 And they are right now because you're spending, you are not spending it on yourself, you are spending it in to buy programming, et cetera. But, another way was it would be to take part of it and put in the CTF Funds in order to augment it and which is badly over‑subscribed, I understand.
LISTNUM 1 \l 1923 And this proposal was obviously made by various people appearing before the task force. This has never been aired publicly. And as soon as these transactions will start, it would be a good idea to ask that question to the use and I give you advance warning.
LISTNUM 1 \l 1924 So, I basically wanted two questions: A, what do you think of the idea and B, do you want to be a pioneer to be the first one to offer?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1925 MR. MERSON: You know, I would be lying if I didn't say to this shift us down as we heard the notion because we did. We are to some degree relying on the ‑‑ on those funds to augment our priority programming and make for an interesting service.
LISTNUM 1 \l 1926 A hundred per cent of the money is going to priority; 85 per cent of it is going to independent productions. So, it is money you really are spending on the system that you might otherwise not be spending.
LISTNUM 1 \l 1927 And we really did think there was a precedent established at how broadcasters had done this well and been able to allocate funds responsibly and build a high quality programming.
LISTNUM 1 \l 1928 But there is sort of a double irony in the situation and it's one that only occurred to us a little bit later and the double irony is that currently City has no CTF envelope and as explained earlier, the reason for that is that the bulk of the production that CHUM did was done within the specialties, so they have all the envelopes.
LISTNUM 1 \l 1929 So, perversely, if the money were to go into the CTF, the bulk of the money would then be redistributed to our competitors who had used the money to enhance their programming against us.
LISTNUM 1 \l 1930 So, that's the reality of the current situation. It might be different in the future if there was sort of a ‑‑ if this was simply a body that dispersed funds proportionate to perhaps the audience levels that were derived in the prior year by Canadian producers and there was some equitable means of doing that, maybe, but I think you have to get there. You have to sort of ‑‑ you have to build to that point where there is sort of an equitable distribution among the various players.
LISTNUM 1 \l 1931 In that situation, but even in that situation, we could never aspire to levels of funding that CTV and Global would have. I mean, ultimately, given the resources that they have and given the distribution that they have on their over‑the‑air channels, both networks, the specially channels that they have, the likelihood is the funds would by large be redirected back to them and ultimately used to benefit their programming at our expense.
LISTNUM 1 \l 1932 So, there are a couple of issues, the one issue is practical. It's just the money, if it was directed to the CTF now would simply get dispersed to our competitors who would use it to develop programming that we couldn't aspire to.
LISTNUM 1 \l 1933 But even in the long term, if you went to an equitable distribution formula, you end up reinforcing, you know, the existing positions that the broadcasters have in the marketplace. So, you know, every formula, every methodology has its positives and has its negatives.
LISTNUM 1 \l 1934 There is, you know, objectivity clearly to the CTF that you could enforce, but you need to get there, you need to build sort of a formula to get there.
LISTNUM 1 \l 1935 We are, you know, as a ways, if you asked an independent broadcaster, an independent business if they could spend the money better than a central authority, the answer you're going to get is "absolutely, we know what our instances want, we can develop the programming, we're less bureaucratic, we can execute a little more quickly."
LISTNUM 1 \l 1936 What you lose probably is some objectivity that you might be seeking to gone or ‑‑
LISTNUM 1 \l 1937 But the other part of this is, you know, programming is very expensive to produce and it would take a massive capital endowment to really build a foundation that might be able to then reallocate the funds on an annual basis to support a highest quality Canadian programming.
LISTNUM 1 \l 1938 So, that's our basic position. You know, we want to be helpful, it's one we just can't see how to work.
LISTNUM 1 \l 1939 THE CHAIRPERSON: Okay. I appreciate your answer. This is very clear and very simple.
LISTNUM 1 \l 1940 Helen, do you have to follow up?
LISTNUM 1 \l 1941 COMMISSIONER DEL VAL: I feel I have to ask this question. I know it sends shivers down your smile, but just run with it for a moment. If you had to ‑‑ if you found yourself in the position where you had to make ‑‑ allocate part of the benefits package to the CTF, how would it effect your package right now, say if you had to allocate x per cent to the CTF?
LISTNUM 1 \l 1942 Would you take X per cent of each initiative or would you abandon some initiatives or a combination?
LISTNUM 1 \l 1943 MR. STRATI: I have to admit we haven't thought about it. I could ask Diane who really has sort of a vision on how it might work. I don't know if you had to cut back?
LISTNUM 1 \l 1944 MS BOEHME: Obviously less, less to be able to build a new profile for a channel group is inhibiting and, obviously, to be able to ‑‑ in a way that the CTF is structured, there seems to be a systemic bias against smalt and mid‑size players. It's built and rewards the success of the people that are already there in the marketplace.
LISTNUM 1 \l 1945 So, I think if we had to give up something, it's going to mean the quality and the calibre of the material that we were able to deliver to our audience is going to obviously be inferior all across the board, I think.
LISTNUM 1 \l 1946 COMMISSIONER DEL VAL: I understand that, but if you had to give something up, have you given any thought to what you would give up in terms of just the dollar amounts and you can come back?
LISTNUM 1 \l 1947 MS BOEHME: No, no.
LISTNUM 1 \l 1948 MR. VINER: We really haven't given up any thought over it at all.
LISTNUM 1 \l 1949 COMMISSIONER DEL VAL: Okay. Thank you.
LISTNUM 1 \l 1950 THE CHAIRPERSON: Okay. Thank you very much. So, I want to go to lunch, but I understand from my counsel that he has one question, so, please make it short because we're due now to lunch.
LISTNUM 1 \l 1951 MR. MILLINGTON: I will. It's a very minor housekeeping matters in terms of the Purchase Agreement that was filed this morning, it references to Transfer Agreements and Transitional Services Agreements.
LISTNUM 1 \l 1952 Could you just provide copies of those agreements?
LISTNUM 1 \l 1953 MR. STRATI: I believe some of those agreements have not been ‑‑ are yet at the table, prepared for closing and for a later point in time.
LISTNUM 1 \l 1954 MR. MILLINGTON: Right, some of them are due for closing, but when they're available.
LISTNUM 1 \l 1955 MR. STRATI: A subsequent closing, right.
LISTNUM 1 \l 1956 MR. VINER: Mr. Chairman, at the risk of further keeping you from lunch and I know that's perilous, sir.
LISTNUM 1 \l 1957 THE CHAIRPERSON: Yes. I forgot about you. You wanted to make a clarification.
LISTNUM 1 \l 1958 MR. VINER: Yes, I did. Thank you.
LISTNUM 1 \l 1959 Commissioner Cugini asked about whether or not the ten per cent overlap to which we had committed would extend to specialty services and I told you that I wouldn't eat with my colleagues and I think I gave her a tentative yes. My colleagues had advised me that what I really meant was "no".
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1960 COMMISSIONER CUGINI: That's why a team approaches is beneficial, I suppose, yes.
LISTNUM 1 \l 1961 MR. VINER: The reason for that, Commissioner, is I was reminded that, two things. One, in the future, we may own other specialty services which we don't know about and really that this condition does not apply to any other Canadian broadcaster and we don't think it should apply to us.
LISTNUM 1 \l 1962 COMMISSIONER CUGINI: Thank you for that clarification.
LISTNUM 1 \l 1963 THE CHAIRPERSON: Okay. I'm glad to hear that "yes" means "no".
LISTNUM 1 \l 1964 We will resume at 2 o'clock with interveners then, okay?
LISTNUM 1 \l 1965 Madam Roy, do you have anything to say?
LISTNUM 1 \l 1966 THE SECRETARY: No. Thank you. At two o'clock.
‑‑‑ Upon recessing at 1243 / Suspension à 1243
‑‑‑ Upon resuming at 1403 / Reprise à 1403
LISTNUM 1 \l 1967 THE CHAIRPERSON: Okay Let's resume. Madam Roy, who is next?
LISTNUM 1 \l 1968 THE SECRETARY: We will now proceed to Phase II in which other parties appear in the order set out in the agenda to present their interventions.
LISTNUM 1 \l 1969 For the record, the intervenors Mystic Films, Writers Guild of Canada and the Directors Guild of Canada listed in the agenda have informed us that they will not be appearing at the hearing.
LISTNUM 1 \l 1970 I would now ask the following four intervenors to appear as a panel and present their interventions: Canadian Ethnocultural Council, Multicultural History Society of Ontario, Brightlight Pictures Inc. and David Brady Productions.
‑‑‑ Pause
LISTNUM 1 \l 1971 THE SECRETARY: We will start with the Canadian Ethnocultural Council. Please introduce yourself and you will then have ten minutes for your presentation. Thank you.
‑‑‑ Pause
INTERVENTION
LISTNUM 1 \l 1972 MME CHIAPPA: Bon après‑midi. Mon nom est Anna Chiappa. Je suis avec le Conseil ethnocultural du Canada. Je suis la directrice générale.
LISTNUM 1 \l 1973 Je vous remercie beaucoup pour nous inviter aujourd'hui et j'aimerais parler à propos de OMNI et de l'application.
LISTNUM 1 \l 1974 On behalf of the Canadian Ethnocultural Council, I welcome this opportunity to appear before you today in support of Rogers Media application to acquire Citytv stations.
LISTNUM 1 \l 1975 I am the Executive Director of the Canadian Ethnocultural Council, an organization which has been in existence for about 30 years.
LISTNUM 1 \l 1976 Our Council is an umbrella of non‑profit ethnocultural national organizations, most of which have also been in existence for just as long, about 30 years.
LISTNUM 1 \l 1977 We also work with local provincial groups across Canada. Some of the objectives of the CEC are to provide a form for communication among different ethnocultural communities, to secure equality of opportunity, rights and dignity.
LISTNUM 1 \l 1978 The CEC conducts programs and activities to support a shared vision of an inclusive and multicultural Canada. We have been involved in a number of issues which affect the participation of these communities in all sectors which reflect the multicultural reality as defined in the Multiculture Act and the Broadcasting Act.
LISTNUM 1 \l 1979 We want to ensure that diversity is central to our institutions and industries and that they operate to take that into account as they deliver their services in a diverse Canada.
LISTNUM 1 \l 1980 I just want to give an example of some of the work that we do. Most recently, we hosted a youth dialogue form with an organization called "YOUCAN". It's a youth centre organization that has been in existence for ten years on the topic of conflict resolution.
LISTNUM 1 \l 1981 Thirty‑five ethnocultural committee groups came together, youth and adults to look at ways to develop capacity on alternative dispute resolution and inter‑generation dialogue.
LISTNUM 1 \l 1982 We've also carried projects with older adults from these communities, on health issues and active living.
LISTNUM 1 \l 1983 This is along to say that we have a pulse within the ethnocultural communities across the country as well as across generations. Canada's cultural diversity is and will continue to be more pronounced at our major centres. While I do not want to dwell on statistics, it's important to remember that according to 2001 Census, two thirds of Canada's population growth was attributed to International Migration and also note worthy, as I'm sure you all know, four fifths of Canadians live in urban centres.
LISTNUM 1 \l 1984 So, our major cities represent over 200 ethnic origins, over 100 languages and growing varieties of religions. And they increasingly represent a large portion of visible minorities, an increase of three folds since 1981.
LISTNUM 1 \l 1985 While urban centres tend to have younger populations, urban viewers are not just from generation X or Y, but also from communities representing all the corners of the world and they are connected to these four corners of the world.
LISTNUM 1 \l 1986 Mass audience will therefore be as linguistically, culturally and racially and religiously diverse as the world we live in.
LISTNUM 1 \l 1987 Added to this is the reality that many urban areas are near U.S. borders and are greatly influenced by this. So, reflecting and sharing and valuing cultural diversity in our mass audience is and will be a challenge of our broadcasting world.
LISTNUM 1 \l 1988 Citytv has brand itself as a diversity TV. In this regard, it has been a leader and was one of the first to have set this as one of its operating principles. We believe that Rogers Media, through its consistent long term investment and commitment has the knowledge and expertise to deal with these challenges and the intricacies of today's diverse mass audience by taking a Citytv's diverse these messages even further.
LISTNUM 1 \l 1989 And I base this on 25 years of experience that Roger has. For example, Rogers Cable System has developed a reputation for diversity through community cable tv. Many volunteers and ethnocultural communities see Rogers through the lens of this community base service.
LISTNUM 1 \l 1990 I just want to reflect that 25 years that I was involved in somebody's early programs as well and I've seen this grow continue.
LISTNUM 1 \l 1991 OMNI has licensed ethnic television, is a licensed ethnic television broadcaster, has offered multilingual language and technic programming for over 25 years. Daily news cast are produced in a number of languages and there is delivery by local personalities who reflect their communities and who understand the local Canadian context and the International reality.
LISTNUM 1 \l 1992 How many had brought communities together to deal with a number of issues, whether fund raising for events, for tsunami victims or for a debate on various provincial elections. It hosts a website called "Diversity now" and it is part with the Aboriginal Peoples Television Network.
LISTNUM 1 \l 1993 And, of course, as you heard today, OMNI created the only fund for Canadian third language drama and documentaries, opening up new avenues for Canadian Industry both in terms of audience and creating opportunities for new talent.
LISTNUM 1 \l 1994 And this I just want to highlight is a very significant and important achievement, one which is an incredible opportunity for this diversity to keep growing. This fund is accessible to independent producers who would normally not have been able to access funds. It really speaks to urban diversity and local.
LISTNUM 1 \l 1995 Rogers has been consistently present when it comes to cultured diversity and has actually helped grow the industry. It has developed strong and deep community presence and has created a positive affirmation of these communities. It has provided a space for diversity to develop the talents of Canadian ethnocultural voices and images.
LISTNUM 1 \l 1996 With respect to television in general, Rogers has proven itself timing again with respect ‑‑ in regards to the specialty channels, supporting the development of different talent through various funds and equally important, it has experienced in wireless into net and new media, which opens up the door to an incredible wider potential for innovation, using the diversity lens.
LISTNUM 1 \l 1997 The proposed benefits, should the application be approved, is another welcome measure in strengthening Canadian programming broadcasting again with an inclusion of strong diversity context.
LISTNUM 1 \l 1998 Through the above, we believe Rogers will help build a critical mass and will finally create a national scale necessary to move Canada as a broadcasting industry forward. It has the breadth, depth and flexibility to compete in a challenging media world. It will bring a wealth of experience from the TV industry and the knowledge of communities and diverse populations to Citytv.
LISTNUM 1 \l 1999 Omni channels, while being a great resource, by virtue of their licensing under the ethnic policy, provide distinct multicultural services to diverse ethnospecific communities. We are pleased to see that there will be different editorial functions separated with different programming mandates, but we also think that that synergy that was talked about so much this morning can be created to allow opportunities, to share information, to access the leadership in the communities to tell different Canadian stories and offer supportive resources to make these happen.
LISTNUM 1 \l 11000 I see this as a very exciting and challenging marriage of these distinct but complementary services.
LISTNUM 1 \l 11001 Briefly, Rogers has developed the comfort and competency in cultural diversity and in Canadian program production.
LISTNUM 1 \l 11002 CRTC's approval of Rogers Media's purchase of Citytv will strengthen diversity on Citytv with its linked communities but offering opportunity to develop talent and to re‑introduce the commitment to cultural diversity in a connected way through its many resources.
LISTNUM 1 \l 11003 Thank you very much.
LISTNUM 1 \l 11004 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11005 You have been very complimentary on both City and Rogers. What is the extra that Rogers will bring to this?
LISTNUM 1 \l 11006 You were obviously satisfied with City's diversity under the CHUM ownership. Now with Rogers, do you see the continuation of the same or do you see an extra value being added; and if so, what is that extra value?
LISTNUM 1 \l 11007 MS CHIAPPA: With respect to City, I am complimentary in the sense of they were the first ones to bring it to the table, to bring it as part of their whole branding, if you will.
LISTNUM 1 \l 11008 I feel that it has kind of stalled, in my opinion. It hasn't moved forward. It hasn't gone the depth to the communities in which Omni has. They are both in some ways different sides of the same coin.
LISTNUM 1 \l 11009 In my mind, Omni has the depth to work with the communities, has understood where they are coming from, has worked with them, has developed various funds. Citytv is there in terms of certain personalities, but I feel that it hasn't gone further in terms of depth.
LISTNUM 1 \l 11010 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 11011 Let's hear from the next intervenor.
LISTNUM 1 \l 11012 THE SECRETARY: We will hear from the Multicultural History Society of Ontario. Please present yourself. You have ten minutes.
INTERVENTION
LISTNUM 1 \l 11013 DR. PETROFF: Thank you very much. My name is Lillian Petroff and I am Coordinator of Education and Community Outreach at the Multicultural History Society of Ontario, which is located in Toronto, Ontario.
LISTNUM 1 \l 11014 I would like to begin by saying that I support this happy marriage. I would like to see it happen in terms of we have witnessed lately a lot of mergers and acquisitions that seem to be coming forward in a little bit of hostility, and so on and so forth, and I see this as a happy marriage.
LISTNUM 1 \l 11015 I too, like my colleague, wish to tip my hat to Citytv.
LISTNUM 1 \l 11016 I just turned 56 and I can well remember as a child the sheer joy and delight of hearing my weather reports and local news on City spoken with the wonderful accents of the people of the Caribbean. So I know through first‑hand experience that you are talking about the union of organizations who understand the meaning of the word "local" and understand the word "ethnocultural".
LISTNUM 1 \l 11017 More important, we bandied about this morning the word of "edginess". Permit me to say this now. I believe the high end of edginess was when Keith Richards, a member of the Rolling Stones band, was reported to have snorted his father's ashes. On the low end of edginess, I would say Paris Hilton and Lindsay Lohan now tangling with the law system in California.
LISTNUM 1 \l 11018 I would like to do away with the word "edginess".
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11019 DR. PETROFF: The important words that the good folks at Omni Television and City brought forward are local, urban, diverse audience.
LISTNUM 1 \l 11020 Toronto, and if you move to all points west, the majority of Canadians can claim heritage which is neither English or French. Toronto today has over 1 million citizens that would perhaps identify themselves as multilingual or visible minorities. That speaks to some of the meat as to what is local, urban and a diverse audience.
LISTNUM 1 \l 11021 And let me speak about diversity. Yes, men, women, children. But let me focus that word "diverse" in terms of ethnic groups.
LISTNUM 1 \l 11022 People have been in Canada, long in the land and even short in the land. You are talking about people in terms of let us say Italians or many ethnic groups that came before World War I or came between the wars or came in the aftermath of World War II or came after 1970s, all with different issues, all with different needs.
LISTNUM 1 \l 11023 Think of a child that came as a baby. Think of a child that comes at the age of 18. Think of all those who come to this country in terms of family reconstitution. Their needs are important and yet different.
LISTNUM 1 \l 11024 I would like to tell you now, in my opinion, Omni has paid its dues. The glass slipper fits.
LISTNUM 1 \l 11025 I believe that Omni will take City by the hand and help to bring along, build on its history of putting forth thoughtful productions, television programs, news accounts and film.
LISTNUM 1 \l 11026 I say that because we are a nation.
LISTNUM 1 \l 11027 We have bandied about the word "synergy". Let's move the word "synergy" away from broadcasters and say the synergy of the people. We are a people who are wise enough to use broken hockey sticks to prop up tomato plants. You don't see it in New York. You don't see it in Naples. Laminated wood is a good thing.
LISTNUM 1 \l 11028 You are talking about a people that when the Vietnamese boat people crisis happened, the people of Canada got ahead of its government and started bringing people here and helping them to reconstitute and serve new life.
LISTNUM 1 \l 11029 We must think about the synergy of the people.
LISTNUM 1 \l 11030 When I started public school, the class list read Ted, Carol, Alice, Bob and so on. Now it's Ted, Fatima, Omar and Sally. Read the numbers, folks. These are the people that are going to be growing up. We will depend on them to sign treaties. We will depend on them to create national policy and, in the times that we live, to think out and execute foreign policy.
LISTNUM 1 \l 11031 So I would commend to you Omni Television that will take City by the hand and together they will move forward and I believe take on a leadership role in broadcasting.
LISTNUM 1 \l 11032 The important thing is as an historian, I can tell you in 1900 they said "what is a Canadian" and most people replied: "Well, a Canadian is a white, Anglo‑Saxon protestant, and so on. It is our responsibility to make the youth and everybody else that is coming in this country as close to that model as possible."
LISTNUM 1 \l 11033 The truth is the Canadian identity has a lot of synergy. It's in constant development because people are coming to our shores daily. With that, if we are to have a successful nation, people must see themselves as historical actors. People must see themselves on the television. And with that I think comes happiness, stability, a sense of responsibility and that makes for a healthy and great country.
LISTNUM 1 \l 11034 That is more important now than ever, that we have a skittish neighbour to the south and that we are making very dramatic decisions.
LISTNUM 1 \l 11035 So broadcasting stands at the heart of our safety and security.
LISTNUM 1 \l 11036 I would also like to make mention, for example, of the Independent Film Production and Documentary Fund.
LISTNUM 1 \l 11037 I believe there was a story that when Fred Astaire started in show business that an agent somehow defined him as someone who could sing a little and dance a little.
LISTNUM 1 \l 11038 This proposal with Omni at the lead will allow those Canadians who feel they can sing a little and dance a little and make a little documentary see if they've got the chops as part of that fulfilment and the playing out of Canadian citizenship. Omni has a fine track record of helping people make that discovery.
LISTNUM 1 \l 11039 You know, we are a nation of Margaret Atwood as a writer but also Austin Clarke and Michael Ondaatje and all these writers who write from the perspective of the diaspora. Can you see that turning it out in film? Can you see that selling those films to those markets and the way people perceive their homeland and so on and so forth?
LISTNUM 1 \l 11040 There is a Nobel Prize in literature that's probably in the wings for Canada. Again broadcasters and the cultural industries stand really at the heart of things.
LISTNUM 1 \l 11041 The wonderful bit that you showed on newscasting, when you saw Joe Pantalone, a city councillor in Toronto speaking in Italian, you didn't see that on City or any other network. It was almost like a public service announcement as he was talking to his constituents.
LISTNUM 1 \l 11042 It was that kind of news and broadcasting I want to assure you I'm very confident that there will be no overlapping, because those kinds of broadcasters speaking to an audience that are learning about the Canadian electoral system, that are perhaps worrying as the city is saying that it's broke, what are they going to do about their first mortgage? Let CBC and others talk to the gang at Forest Taylor, North Toronto or people that have paid their houses off for that. There is no chance of overlap.
LISTNUM 1 \l 11043 And I love it. I love it because it's almost like doing history from the bottom up.
LISTNUM 1 \l 11044 Again, a great nation has its people that are healthy, well informed, and I know most Canadians can find their country on a map. You see what I mean?
LISTNUM 1 \l 11045 I think broadcasters stand right at that edge.
LISTNUM 1 \l 11046 Also, I want to say a few words about longevity.
LISTNUM 1 \l 11047 We all have multiple identities. We're somebody's brother, somebody's sister, somebody's wife, somebody's boss, or whatever. When you think during the course of life, the rights of life, marriage, christening, heritage, language, funerals, that the playing out of one's identity is really a life‑long activity, Omni stands at the forefront of it.
LISTNUM 1 \l 11048 THE SECRETARY: I'm sorry. You can conclude. You just have one minute left.
LISTNUM 1 \l 11049 Thank you.
LISTNUM 1 \l 11050 DR. PETROFF: In that respect, I would have to say that this a very significant union of two institutions that I hope and I know will go on to claim the role that they now deserve: to be industry leaders in the broadcast community and to the benefit of all of us as Canadians in good standing.
LISTNUM 1 \l 11051 Thank you very much.
LISTNUM 1 \l 11052 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11053 Stuart, do you have some questions?
LISTNUM 1 \l 11054 COMMISSIONER LANGFORD: Yes, thank you, Mr. Chair.
LISTNUM 1 \l 11055 That's eloquent. That's the only word I can think of: eloquent.
LISTNUM 1 \l 11056 Now I have a synergy question. So we are going to move it from the people back to the studio because it sounds to me like you watch a lot of Omni. Am I right on that? And you are pretty familiar with City as well.
LISTNUM 1 \l 11057 DR. PETROFF: Yes, sir. I'm an historian. I must confess to being a TV addict and I watch all kinds of television; so, yes.
LISTNUM 1 \l 11058 COMMISSIONER LANGFORD: It's not a crime yet. We don't do criminal law, so I can't give any warranties for the future.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11059 COMMISSIONER LANGFORD: Are there any programs on Omni today or in the recent past which would work on Citytv tomorrow, even if they had to be dubbed into English?
LISTNUM 1 \l 11060 DR. PETROFF: Well, I am always fascinated by the news accounts.
LISTNUM 1 \l 11061 But let me say in terms of dubbing, if you look at any of the Greek broadcasting, for example now with the fire, if you look at the politics of the Middle East, now messages are not going by cargo ship; like events are happening in real time. You can take any Omni program and dub it.
LISTNUM 1 \l 11062 My personal favourite, the one that I took absolute delight in that was on a few years ago, was an Anglo‑Canadian crown attorney who mastered the Chinese languages and had a cooking show in which he spoke Mandarin or Cantonese, showing Canadian foodstuffs.
LISTNUM 1 \l 11063 And I thought, this is remarkable, you will not see this anywhere. To see an Anglo‑Canadian who spoke fluent Chinese and turning the tables, bringing forth his culture. You wouldn't see that in New York, Los Angeles or anywhere. I loved it. I loved it. But the important thing is that I watched the show, because even if I can't understand the languages, the images, I feel the intensity of the words, if I dubbed it it would be marvellous.
LISTNUM 1 \l 11064 It tells me, for example, that when you have commentators from the community, even when they are talking about we have to organize and raise money and here is where you can do it, that is in real time. And if you could imagine dubbing it.
LISTNUM 1 \l 11065 I had a very personal experience when I was being interviewed on OMNI, a cardiologist saw the show, contacted me and said you have got to lose some weight or you are going to die. Well, I just lost 80 pounds. How much more dramatic can you get?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11066 Because he says I was going to lose my breath and was headed for certain death. So personally, I owe a lot to OMNI.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11067 And that is absolutely true.
LISTNUM 1 \l 11068 COMMISSIONER LANGFORD: I have had people suggest I lose weight, but they always suggest I do it by cutting my head off.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11069 DR. PETROFF: Well, then you grow another one back.
LISTNUM 1 \l 11070 COMMISSIONER LANGFORD: Anyway, that certainly answers my question. We want to give your colleagues a chance.
LISTNUM 1 \l 11071 Thank you very much, Mr. Chairman.
LISTNUM 1 \l 11072 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11073 Madam Roy.
LISTNUM 1 \l 11074 THE SECRETARY: Thank you. And now we will hear from Brightlight Pictures Inc. You have 10 minutes, and please present yourself. Thank you.
INTERVENTION
LISTNUM 1 \l 11075 MR. HEGYES: Thank you for the opportunity to appear in support of the transfer of ownership of five Citytv stations from CTV Globemedia to Rogers Media.
LISTNUM 1 \l 11076 My name is Stephen Hegyes and I am one of the owners of Brightlight Pictures based in Vancouver, B.C. We develop, finance and produce independent feature film and television projects for the Canadian and international marketplace.
LISTNUM 1 \l 11077 We are encouraged that Rogers Media has made a firm commitment to preserve Citytv's unique contributions to the broadcasting system, including the support of Canadian feature films. In an increasing competitive global environment TV licensing is an integral part of the financing structure for Canadian feature films. Without it, Canadian filmmakers would be unable to complete financing requirements and go on to produce their films here in Canada.
LISTNUM 1 \l 11078 The ability to showcase Canadian programming domestically and on the international stage can only continue if we have a strong industry partner with broad reach. Without a Canadian broadcast partner so many excellent Canadian films would never be seen in many Canadian markets. Theatrical releases can be short‑lived and free TV windows are often the key platform through which these films reach Canadian audiences.
LISTNUM 1 \l 11079 I believe that Rogers Media, with their demonstrated history of investing in Canadian programming and building success, is the right choice to take on Citytv.
LISTNUM 1 \l 11080 More production in Canada produced for and by Canadians create more opportunities for the best our country has to offer. Our success has enabled us to nurture many emerging writers, directors, actors and producers and can continue to do so. Rogers Media's commitment to maintaining Citytv's focus on supporting feature films is of critical importance to the independent filmmakers. Rogers has shown itself to be passionate about building Canadian programming and audiences and has been successful in doing so.
LISTNUM 1 \l 11081 I believe that under Rogers Media ownership Citytv's unique services will thrive and their ideas and innovation will be better financed. As a result, we will not lose the important contribution that Citytv has been making to the broadcasting system and that Canadian feature films will continue to have a free TV platform in Canada and the opportunity to travel around the world.
LISTNUM 1 \l 11082 The marriage of these two great companies, while preserving Citytv's distinctive voice will contribute greatly to the vitality of our broadcasting system, thereby enhancing Canadian culture.
LISTNUM 1 \l 11083 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 11084 Helen.
LISTNUM 1 \l 11085 COMMISSIONER del VAL: Thank you, Mr. Hegyes. I recognize your name and I know that you have been in the industry for a long time.
LISTNUM 1 \l 11086 I just want to hear from you as a producer, can you describe the difference in experiences you had obtaining funding from the different types of funds? I am talking about say the third party that administered renewable funds, like the Independent Production Fund, that is one. And the second type of fund is like the third‑party short‑term funds like the Canadian Western Independent Producers Fund. And then lastly, from say a self‑contained, self‑administered fund like say the BCE. Can you maybe give me an idea of what the experience is like when you obtain funding from these different funds?
LISTNUM 1 \l 11087 MR. HEGYES: Well, primarily, the funding for Canadian feature films comes from Telefilm Canada, that is one of the first places that a producer will go in Canada for Canadian feature film. But to trigger that funding, you know, distribution triggers are required. And generally, those distribution triggers are only available to producers who can demonstrate that they have broadcast licence fee commitments to then take on to Telefilm.
LISTNUM 1 \l 11088 Generally, my experience has been that once the broadcaster, in this case Citytv, was one of the few broadcasters that meaningfully developed and licensed Canadian feature film. And so they understood when you went to them with a feature film not only how to help develop into something that was viable, but also how to market it to their audiences, which in turn was something that would help market it to the same audiences that the distributors were looking at and often make it more attractive to other funding, third party and direct funding, available to Canadian feature films.
LISTNUM 1 \l 11089 I don't know if that really answers your question.
LISTNUM 1 \l 11090 COMMISSIONER del VAL: I was just wondering whether you have any view on is it easier, more difficult or like just what your experience has been, say when you ask for funding from a broadcaster's own fund or from an independent fund like the Independent Production Fund. Generally, what is the experience like?
LISTNUM 1 \l 11091 MR. HEGYES: Well, you know, I can speak specifically about City, in that they understand feature film and I think that understand is what makes it easier to approach them with a project and know that they understand the kind of project you are trying to finance.
LISTNUM 1 \l 11092 COMMISSIONER del VAL: And you found that there isn't the same type of understanding, say if you applied to a sort of fund that is not, for lack of a better term, a private fund like that?
LISTNUM 1 \l 11093 MR. HEGYES: Not necessarily, it really depends, you know, on the fund and the individual. What is important is that the individual you are dealing with within the organization really understands feature film.
LISTNUM 1 \l 11094 THE CHAIRPERSON: You stress the fact that City was good at marketing films more than others. I am obviously not from the industry. Give me an example, what would City do that others wouldn't do that you felt was for Canadian feature films?
LISTNUM 1 \l 11095 MR. HEGYES: Well, you know, whether it was the what is called the schmooze at the Toronto Film Festival where they will pile the Canadian filmmakers, and we have been very fortunate to benefit from this when we have had films that have been selected for the Toronto Film Festival.
LISTNUM 1 \l 11096 But they would, you know, every year do a live show that would feature actors who weren't movie stars yet, many of them have become so, but they would promote the stars, they would promote the directors, they would promote the films and they would do so live on television. No other broadcaster in the country has ever done that.
LISTNUM 1 \l 11097 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11098 Rita, do you have a question?
LISTNUM 1 \l 11099 COMMISSIONER CUGINI: Yes. Mr. Hegyes, you have obviously spoken a lot about Citytv, but in your written submission you say that Rogers Media has played an essential role in developing your company. So just what is your relationship with Rogers Media?
LISTNUM 1 \l 11100 MR. HEGYES: We actually haven't done a lot of business with Rogers recently. That was more of a general ‑‑ in terms of their support of the industry. It is much more Citytv.
LISTNUM 1 \l 11101 COMMISSIONER CUGINI: I don't know if you were here this morning, but we talked about their desire to increase the number of documentary hours per year from 10 to 20. Are you primarily a fiction feature film producer?
LISTNUM 1 \l 11102 MR. HEGYES: I am primarily fiction. But I think documentaries 10 years ago are a lot different than they are today. I think documentaries like, you know, Fahrenheit 9/11 or An Inconvenient Truth, you know, or The Eleventh Hour are theatrical feature films in my mind.
LISTNUM 1 \l 11103 COMMISSIONER CUGINI: Do you therefore support Rogers' request to increase the number of hours from 10 to 20?
LISTNUM 1 \l 11104 MR. HEGYES: I would, yes.
LISTNUM 1 \l 11105 COMMISSIONER CUGINI: Thank you very much.
LISTNUM 1 \l 11106 Thank you, Mr. Chairman.
LISTNUM 1 \l 11107 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11108 Madam Roy.
LISTNUM 1 \l 11109 THE SECRETARY: Thank you. And now we will hear from David Brady Productions. Please introduce yourself and you have 10 minutes. Thank you.
INTERVENTION
LISTNUM 1 \l 11110 MR. BRADY: Thank you. I am David Brady. I want to thank you for this opportunity ‑‑
LISTNUM 1 \l 11111 THE SECRETARY: Please ‑‑
LISTNUM 1 \l 11112 MR. BRADY: I want to thank you for this opportunity to be here and to intervene on behalf of Citytv. My emphasis is also Citytv as my direct experience. But I will start off and I want to salute my friends who have organized themselves and made notes, it is not how I function.
LISTNUM 1 \l 11113 My first film was in graduate school in the late 1970s at Simon Fraser in Vancouver and that film was done at Rogers Cable and it was called Alcohol, Drugs and the Young and it was while I was a graduate student doing two streams; one was political economy and mass media and I could likely be sitting up on that table if I had continued down that path.
LISTNUM 1 \l 11114 But as a result of my experience of producing that film I ended up hooking up with a young man named Philip Borsos in Vancouver and becoming a partner in a company called Mercury pictures, which produced a film called Nails, which was nominated for an Academy Award and then had us produce a film called The Grey Fox, which was nominated for a Golden Globe for the best foreign picture, as well as Richard Farnsworth for the best actor.
LISTNUM 1 \l 11115 And, you know, in no small measure, and I really mean this, if Rogers was not there I doubt if I would be sitting here today. But let me fast‑forward. I went on to produce a number of theatrical feature films, I met a young lady as there was once a song that said `the foolish things we do for love' and I moved back to Toronto ‑‑ which for me was like purgatory, because I hate winter ‑‑ from Los Angeles. And it was to Citytv that I found myself attracted. And I got to work pre‑specialty channels and post‑specialty channels.
LISTNUM 1 \l 11116 I have known Diane Boehme for too many years. I don't want to embarrass her, but I have known her long time, as Peter. And I was there with a company called Sleeping Giant Productions, Jim Hanley would have been helpful in bringing TVOntario onto the air, brought me in, and I went on to produce a number of shows. And I would like to redefine edgy, because in those days I feel that City had a very clear vision of where they were going and their willingness to take chances. And we were to do a show which ironically dovetailed into that first film I ever did called "The 12 Steps ‑ Recovering From Addictions" and it was very edgy.
LISTNUM 1 \l 11117 And I want to tell you that literally hundreds of thousands of peoples' lives have been touched by that series and it has gone onto play and to be used in educational institutions in addiction facilities. And it was the willingness of City to take a chance and the irony, of course, is that TVOntario acquired the moniker that came from the review of that series by John Haslett Cuff that this is television that matters. And it was in fact a review, but the lead broadcaster at that point was City.
LISTNUM 1 \l 11118 They also were there on numerous occasions to back us on a number of productions and I had the privilege of working with Peter in a very minor way, but on the Canadian Learning Television because I also taught at York and Ryerson.
LISTNUM 1 \l 11119 What I can tell you is that in my opinion, for what it is worth, that it is I think a tragedy that there is so much amalgamation going on in broadcasting, I think it is a tragedy. But the fact of the matter is, if it is going to happen it better happen with the right partners. And right now, by combining Rogers with City, you have a very, to use an overused word, synergistic relationship because they have complimentary styles.
LISTNUM 1 \l 11120 In my humble opinion, what will work, as Ted Rogers has demonstrated a forward thinking that no one else in this country has. He has an ability to manage, as do his managers and his associates, enterprises that have proven beyond any shadow of a doubt they financial viability. I believe that City has demonstrated by keeping most of the players in place this forward thinking creatively. And I would like to think that the possibility of a relationship that is both complimentary and financially viable, that will open up another possible channel for someone like myself.
LISTNUM 1 \l 11121 And I am not someone who generally, out of 120 odd hours of primetime television and four theatrical feature films, I don't generally come for Canadian money. I have maybe four hours of CTF in my whole career, because my programming is made for the marketplace. I am financed by major studios in Los Angeles, I am financed by American networks and I am financed by international co‑productions.
LISTNUM 1 \l 11122 But I think it is vital for Canada to have a presence and to have a mechanism that will allow us. And I would really like to address the issue of this single funding, because it is a guaranteed recipe for disaster. And I just ask you to look at Telefilm Canada for the countless hundreds of millions of dollars that have gone out the door and show me five feature films that people can name in here that anybody has ever watched outside of Atom Egoyan's and one or two others. There are so few that have ever made it.
LISTNUM 1 \l 11123 The thing about the funding is that the broadcasters are putting their money on the table with mine and they are coming up with the eyeballs and their business, in all honesty, is selling eyeballs to advertisers. And if they are not successful, they are not going to sell eyeballs. The moment we leave it to a third party outside of who they are, that are there to protect their jobs, you lose focus on what you have. It is, honest to God, a guaranteed recipe for disaster to allow anyone other than those people who have at stake the greatest possible risk to make the decisions because they know what the marketplace needs.
LISTNUM 1 \l 11124 Thanks.
LISTNUM 1 \l 11125 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11126 Rita, do you have questions?
LISTNUM 1 \l 11127 COMMISSIONER CUGINI: Mr. Brady, you did mention the word amalgamation and you are not the first, of course, to bring a cautionary note to whether it is amalgamation or a vertical integration or integration in general. And especially from the perspective of an independent producer, because what we are told is one less door for us to knock on, so make sure there are safeguards in place that will allow for the continuation of work to come from independent producers.
LISTNUM 1 \l 11128 I wonder if you and/or Mr. Hegyes have any comment?
LISTNUM 1 \l 11129 MR. BRADY: I say this keeps the door open. This actually opens another door because, I will tell you now, if you don't have it we lose a door potentially. Listen, they don't have the money. You know, City's losing money. How long can they keep losing money? You know, I mean they lost focus. When I was at City, City was at a zenith, it was really cooking and things were really happening.
LISTNUM 1 \l 11130 The truth is I mean, you know, I am going to tell you, I think it is a disaster the number of specialty channels that have been licensed because, you know, I have to go out and make 10 sales to make a decent living. I run my own company, I employ a lot of people, I have literally employed ‑‑ I don't know about you, Stephen ‑‑ but I have employed at least 1,000 people in my career. I have probably produced many millions of dollars worth of television and feature films. I have done it as a result of making sure that I have had five cents more than I have spent. I have never had to go bankrupt. And I have got to tell you, that you can only lose money for so long before you go under.
LISTNUM 1 \l 11131 If a station doesn't have the infrastructure and the financial wherewithal and the manageability, which Rogers has deep pockets, no offence to the Rogers group. But the fact of the matter is they have the management ability to turn the company around and to enable it to move forward in a very solvent and financially responsible fashion because the focus did get diffused and it got diffused. And I worked on, as I say, one of the applications that allowed that to happen. My associates worked on the Bravo application, both by the way independent and very strong stations. But I see this as an opportunity quite frankly.
LISTNUM 1 \l 11132 COMMISSIONER CUGINI: Thank you, your position is quite clear.
LISTNUM 1 \l 11133 Mr. Hegyes?
LISTNUM 1 \l 11134 MR. HEGYES: I was just going to add that having a door available is only really meaningful if there is something on the other side of that door. And if there isn't sufficient financing on the other side of that door, then that door really doesn't mean anything to the producer.
LISTNUM 1 \l 11135 COMMISSIONER CUGINI: And you therefore, as well, support the broadcaster self‑directed funds for that reason?
LISTNUM 1 \l 11136 MR. HEGYES: Yes, I do.
LISTNUM 1 \l 11137 COMMISSIONER CUGINI: Thank you very much. Thank you, Mr. Chairman.
LISTNUM 1 \l 11138 THE CHAIRPERSON: Stuart.
LISTNUM 1 \l 11139 COMMISSIONER LANGFORD: Thank you, Mr. Chairman.
LISTNUM 1 \l 11140 This question is for either or both of ‑‑ this end of the table, the production end, if you don't mind, or if the other end has ideas on it that is fine too.
LISTNUM 1 \l 11141 There is something that I am curious about that after all of the hearings I have taken part in I still don't have a fix on and maybe you can help because you are not up here, you are down there beating on the doors. We heard this morning, and you must have been here because you have sort of been speaking to the issues directly, that over the next seven years Rogers has committed to spend something like $78.7 million on priority programming, the sorts of movies that you folks make, the sort of programs you make.
LISTNUM 1 \l 11142 Assuming it all goes well, and we always wish anyone in front of us well, so assuming that is a successful formula what kind of momentum does that create for the next seven years when they are not obliged to spend anything really?
LISTNUM 1 \l 11143 Can we expect that they will have to spend ‑‑ I don't know how much money. That is what I am looking for help with. You get yourself into a rhythm where you are buying new programs and they are succeeding and you just have to keep feeing the machine because the machine is feeding you or do we expect that after seven years it all just dries up and people can then go off to the CTF for their funds? Is that a fair question?
LISTNUM 1 \l 11144 MR. BRADY: It is a very fair question. So look, I have been here since 1980, I haven't gone to the government with the exception of a show I just did for CBC for CTF and another three hours that I was asked if I would help on the APTN on a series and I brought in a lot of Aboriginal filmmakers, because there is a part of me that is also pedagogical, I still like teaching and I like being of service.
LISTNUM 1 \l 11145 But, you know, I have never missed a meal, my kids have made it through university, I have always lived at a reasonably good level and I have done it through the marketplace, by producing programming that people want to see. But in order to have produced programming that people want to see we had to go to the original Canadian Film Development Corporation to give us a hand to start out with the first couple films I did, Until Death Do Us Part and The Grey Fox, and then I was able to go into the marketplace and sell.
LISTNUM 1 \l 11146 It is why today I can pickup the phone and why two days ago the president of Fox Reality called me personally to turn me down, but nonetheless he called me personally to turn me down because they know me, because I am at the markets. And this is another area you asked about. One of the very smart things is, come to CAN, come to MIPCOM, come to MIP and see the City booth, see them there selling the programming and they are very shrewd at doing that.
LISTNUM 1 \l 11147 That is one of the elements that really works for City, is they have always been in the marketplace making sure they know what is going on, and it is vital, it is really vital. As I met our folks from OMNI at the last market at MIPCOM at which I am overdue in another month, but you see I don't need the money anymore, but that priming money is what was needed. And I did hear an awful lot of reference to young producers, and for those matures mature producers like myself who don't wish to be hurled over the side, you don't want to forget about us either.
LISTNUM 1 \l 11148 But the fact of the matter is it is a necessary ingredient to be able to ‑‑ get this, I mean, I remember when this all started. I mean, I can remember Telefilm Canada becoming Telefilm, from the Canadian Film Development Corporation to Telefilm. And now, we have a very viable television industry. We sell programming all over the world, programming that will stand‑up against anybody's. When we shot The Grey Fox in 1980 we had to wait for a crew and right behind us was a guy named Sylvester Stallone to do a movie called First Blood, he had to wait for us to finish.
LISTNUM 1 \l 11149 Right now, you could do six features at any given time in Vancouver and basically I don't think you would put a dent in the crews that are there. So has it worked? You bet. Will it continue to work? You bet. If you allow the people that know how to manage to manage, but that is the secret.
LISTNUM 1 \l 11150 COMMISSIONER LANGFORD: So just to follow‑up, in terms of dollars roughly, if they are going to spend $78.7, because in a way they almost have to, the next seven years will they spend something like that the seven years after?
LISTNUM 1 \l 11151 MR. BRADY: I have no idea. If they want to keep eyeballs, if they want to keep series, if they want to keep viewers they have got to invest in them.
LISTNUM 1 \l 11152 COMMISSIONER LANGFORD: They have got to then?
LISTNUM 1 \l 11153 MR. BRADY: Yes. I mean, everybody, there isn't a network ‑‑ you know, let us get reality here. Do you know what an average U.S. season costs them for one show?
LISTNUM 1 \l 11154 COMMISSIONER LANGFORD: But we heard today that City has, these days, has dropped below their high of $4.1 million a year.
LISTNUM 1 \l 11155 MR. BRADY: M'hmm.
LISTNUM 1 \l 11156 COMMISSIONER LANGFORD: And Rogers wants to bring it back. So that is the problem you are describing, they just lost their way?
LISTNUM 1 \l 11157 MR. BRADY: Yes. And if they start to reinvest ‑‑ I mean, Diane Boehme, there is not very many people that have the experience Diane does. And listen, you know, I haven't gone to Diane for anything in a long time. Like, I don't bother people unless I have an idea for them. Rogers Telefund, it is hilarious, I keep getting turned down by them. And the difference, by the way for the fund so you know, is it is a top‑up fund.
LISTNUM 1 \l 11158 My project, The Pagan Christ, based on the Tom Harpur book that I have just delivered to CBC for this Christmas, I will be the grinch that stole Christmas, but you know my show didn't shutdown because I didn't get Rogers Telefund, but it is an ingredient, what it does is it gives you some money to be able to pour a few extra bells and whistles into your post‑production, it lets you elevate the production up one more level. But there is a big difference between that and CBC coming in or Citytv coming in and giving me a licence, because I need a Canadian licence because I need the tax credits.
LISTNUM 1 \l 11159 The Canadian licence is what triggers 80 per cent of my financing or 60 per cent at the bottom end, but between 60 and 80. And the rest, I go out into the international marketplace and I get the money to go produce it, that is without CTF. If I have CTF, as I just did on four hours that I have just done, then I don't need to go. But that programming I can sell internationally. For me, the problem with CTF is I am too limited, you know, I mean I might as well have Bucky the Beaver in the background and a flag waving.
LISTNUM 1 \l 11160 COMMISSIONER LANGFORD: Thank you.
LISTNUM 1 \l 11161 THE CHAIRPERSON: You want to say something?
LISTNUM 1 \l 11162 DR. PETROFF: Sir, if I might try and answer your question as a civilian, and I might be wrong about this.
LISTNUM 1 \l 11163 In Toronto at the Royal Ontario Museum we recently had the opening of the Michael Lee‑Chin Crystal palace type of thing. Well, dig that name, Michael Lee‑Chin. So I want to raise the spectre that through OMNI Television, I believe OMNI has the reach, the intelligence and the knowledge to bring forth financial backers who want to play in the cultural arena that might become the new representatives in Telefilm Canada or private investors, again who want to move the Canadian cultural identity forward.
LISTNUM 1 \l 11164 In other words, I think that there is a whole new world of backers, a whole new bunch of money out there that can be tapped into and helpful to mainstream producers and so on that will result in, I think, better Canadian broadcasting cultural exhibits. And the people won't wait. The people will create their own projects if they don't see themselves reflected into.
LISTNUM 1 \l 11165 And so you have, I think, all this resources, including financial, that may prove helpful to you as you are moving forward on your successful career. So I think that should be noted too, that there are other pockets of money emerging and people want to be players and historical actors and that is it, you go after it, good enterprise, and they are taxpayers.
LISTNUM 1 \l 11166 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 11167 Any other questions. Thank you very much. We will take a very short break before hear from the next three interveners. So let us have a 10‑minute break. Thank you.
‑‑‑ Upon recessing at 1457 / Suspension à 1457
‑‑‑ Upon resuming at 1507 / Reprise à 1507
LISTNUM 1 \l 11168 THE CHAIRPERSON: Would you please take your seats?
LISTNUM 1 \l 11169 Madame Roy.
LISTNUM 1 \l 11170 THE SECRETARY: We will now hear from Stephen Hawkins. You have 10 minutes for your presentation. Thank you.
INTERVENTION
LISTNUM 1 \l 11171 MR. HAWKINS: Thank you and thank you to the Commission for hearing my remarks.
LISTNUM 1 \l 11172 My name is Stephen Hawkins. I am the local President for CEP 830M and I have been a news cameraman at CKVU, Citytv, Global ‑‑ many different names over the years, for the last 15 years, and I have worked in the television industry for the last 23 years, starting in Western Canada, working in Toronto for a few years for CTV National News and finally coming back home to Vancouver.
LISTNUM 1 \l 11173 My local represents about 90 members at Citytv Vancouver. Before the restructuring last July we represented over 150.
LISTNUM 1 \l 11174 What Rogers is proposing is to maintain current programming levels at Citytv in Vancouver. In Canada's second largest English‑language market, that is simply not good enough.
LISTNUM 1 \l 11175 Now, why would Rogers treat their Vancouver viewers as second‑class citizens and program a fraction of the news and information programming that they deliver in Toronto? Is Vancouver so different from Toronto?
LISTNUM 1 \l 11176 In 2004, Citytv Vancouver was granted a broadcast licence based on a promise of performance which included a full schedule of evening and weekend news programs.
LISTNUM 1 \l 11177 The direction that Citytv was going seemed to change when in the summer of 2005 three entertainment videographers were laid off. They were replaced with a pre‑packaged entertainment segment that was produced in Toronto. There was rarely Vancouver content in this canned segment.
LISTNUM 1 \l 11178 Ironically, one of these videographers, Bill Mantiss, had been singled out by Citytv in its 2004 licence application for his coverage of Vancouver's gay community.
LISTNUM 1 \l 11179 Vancouver's commitment to its 2004 promises were again in question to many of us when in March 2006 a B.C. ferry, the Queen of the North, sank in the inside passage. No Citytv employees were sent to the scene. Instead, the station relied on other news sources for their video.
LISTNUM 1 \l 11180 Breakfast Television News as it airs today has a fraction of the viewers that would be watching an evening news program. It does not serve the public interest in the same way that an evening newscast does. The difference between a 20‑second voiceover on BT and a two‑minute news story on the evening news is the difference between just reading a headline and reading the entire story.
LISTNUM 1 \l 11181 Citytv airs no newscasts between Friday at 10:00 a.m. and Monday morning at 6:00 a.m. There are no cameras even scheduled between Friday and Sunday morning.
LISTNUM 1 \l 11182 When the roof of B.C. Place collapsed, I was on the scene in minutes. The full story wasn't on the air until three days later. Viewers are not getting timely information.
LISTNUM 1 \l 11183 Just this past weekend when a hot air balloon crashed killing two and in a separate incident six members of a Sikh wedding party were killed by a pickup truck, City viewers had to wait over two days to see these stories.
LISTNUM 1 \l 11184 On July 17th, 2007, BT aired 14 short newsbreaks, which added up to, in our calculations, one hour and 24 minutes of Category 1 news, not the two and a half hours Citytv is claiming.
LISTNUM 1 \l 11185 In fact, if you look at the actual news content for that day and you discount the repeat effect of a news wheel, you could say that there was really only 10 minutes of local news that day and four minutes of international news.
LISTNUM 1 \l 11186 In fact, staff reductions for the evening news in July 2006 have left the station with only two journalists and one live eye reporter to cover the entire region's news.
LISTNUM 1 \l 11187 In 2004, the station had up to 17 cameras on the road. Today, Citytv has just six and two of us are dedicated to shooting live elements for Breakfast Television for most of our shift.
LISTNUM 1 \l 11188 Citytv no longer has staff in Victoria to cover the Legislature and now with A Channel Victoria owned by CTV, Citytv will have a very limited ability to cover government or Vancouver Island news.
LISTNUM 1 \l 11189 I worked at BCTV out of the Legislature in the late 80s and I have no doubt that what happens in the Leg in the Victoria and what happens on Vancouver Island is news to people that live in Vancouver.
LISTNUM 1 \l 11190 Even when Citytv sends a camera to a news event, the newsroom is heavily reliant on wire services and other newsrooms for their actual information. This is possible because news on Breakfast Television is usually a day old by the time it airs at 6:00 a.m.
LISTNUM 1 \l 11191 Vancouver's concentrated media problem is further worsened by resource sharing that goes on between Global and CBC. What used to be rare is now a daily occurrence. When a camera shows up at the courthouse, I don't have to ask myself if it is shooting for Global or CBC because in many situations their footage will air on both stations.
LISTNUM 1 \l 11192 It is this type of arrangement that I am concerned about happening with Rogers Citytvs and OMNI stations and this could dramatically reduce the feed on the street and limit voices heard in Vancouver.
LISTNUM 1 \l 11193 When I ask people in the community if they think Citytv should have an evening newscast, they are unanimous in their support for different voices in Vancouver.
LISTNUM 1 \l 11194 The question is: Do we really need more news in Vancouver or Edmonton or Calgary or Winnipeg?
LISTNUM 1 \l 11195 The answer is yes, now, more than ever, we need local news. Different newsrooms tell stories in different ways and our democracy is stronger with more voices in the media.
LISTNUM 1 \l 11196 If Rogers is allowed to take control of Citytv without serving the community with a local evening news, and I have to say not local evening news at the levels that it had in 2004 when they got their broadcast licence, then I think it will set a dangerous precedent that will see newsrooms close across the country and our democracy will suffer.
LISTNUM 1 \l 11197 I think the CRTC must act with this application before we see this happen.
LISTNUM 1 \l 11198 If Rogers is not willing to produce an evening newscast that serves the community, then the CRTC should give the licence to a broadcaster that will.
LISTNUM 1 \l 11199 So please bring back local news in a meaningful way to Vancouver.
LISTNUM 1 \l 11200 Thank you for hearing my comments.
LISTNUM 1 \l 11201 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11202 You are focusing primarily on Vancouver, I notice. They have a program from 4:00 to 4:30 called "City Line On Call."
LISTNUM 1 \l 11203 That is not news, I gather, is it?
LISTNUM 1 \l 11204 MR. HAWKINS: That is not produced in Vancouver.
LISTNUM 1 \l 11205 THE CHAIRPERSON: It is not produced in Vancouver? It is on the schedule of Vancouver that is filed with us.
LISTNUM 1 \l 11206 MR. HAWKINS: No, that is ‑‑
LISTNUM 1 \l 11207 THE CHAIRPERSON: It is a Toronto show, is it?
LISTNUM 1 \l 11208 MR. HAWKINS: Yes.
LISTNUM 1 \l 11209 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 11210 Helen, do you have a question? You come from Vancouver.
LISTNUM 1 \l 11211 COMMISSIONER DEL VAL: Thank you, Mr. Hawkins.
LISTNUM 1 \l 11212 I just want to point out that we don't have the authority to tell a broadcaster how to present their news, how many people they need to hire to present news or how timely they need to get their news on the air.
LISTNUM 1 \l 11213 The market will have something to do with what your concerns are because would the audience not then find news that is three days old simply not relevant and wouldn't that then drive the broadcaster to change their programming?
LISTNUM 1 \l 11214 It seems to me you are asking us to require the broadcaster to broadcast news in the traditional news format that we know but isn't that left better for ‑‑ firstly, we cannot do that, we don't have the authority to do that, and secondly, the programmers presumably are the ones who know better how to present their programming, not us.
LISTNUM 1 \l 11215 MR. HAWKINS: Well, it seems reasonable that you would expect the broadcaster to program when people are watching, when the majority of people are watching television.
LISTNUM 1 \l 11216 I have worked at CKVU for a long time and I worked at CKVU when we were a strong member too back around 2000 or so when we were competing with BCTV and, you know, it is possible to have a number two show.
LISTNUM 1 \l 11217 What changed was the owner changed but the people who were working there were the same. It is the owner's decisions that seemed to take us from that position to another position.
LISTNUM 1 \l 11218 THE CHAIRPERSON: Okay, you have another question?
LISTNUM 1 \l 11219 COMMISSIONER CUGINI: Just further to that, I think what Commissioner del Val is also saying is that it will be viewers who make the choices.
LISTNUM 1 \l 11220 In other words, if they find that they aren't getting their local news from one source, they are going to go to another source for their local news, and if the broadcaster feels that dent in how many people are watching the station, they do that at their peril, and if it is so much of a dent that they think they need to bring back news, they will do that too.
LISTNUM 1 \l 11221 In other words, as I said, what Commissioner del Val was getting at is the viewers will make the choice.
LISTNUM 1 \l 11222 MR. HAWKINS: Well, my understanding is that news is required and that it is the price that a broadcaster pays for the ability to make money off of U.S. programs, and the profitability of the news is sort of the price ‑‑ it is the cost of doing business at times and ‑‑ sorry, I have lost my train of thought. Could you re‑ask that question?
LISTNUM 1 \l 11223 COMMISSIONER CUGINI: Just so you know and you are clear, our requirements are that by condition of licence a broadcaster is required to provide a certain number of hours of local programming and that varies from licence to licence, and within those hours, news is not a requirement.
LISTNUM 1 \l 11224 It is up to the broadcaster to serve the needs of their viewers in the manner in which they see fit and most advantageous and hopefully most profitable.
LISTNUM 1 \l 11225 Now, the former owners of CHUM, of the Citytv stations, made the decision that they made for a number of reasons and we are not here to discuss what those reasons are, and at the risk of repeating myself, it is the viewers who will ultimately make the choice, and if they don't get their local news from these local stations, they will get their local news somewhere else.
LISTNUM 1 \l 11226 THE CHAIRPERSON: Stuart, you had a follow‑up?
LISTNUM 1 \l 11227 COMMISSIONER LANGFORD: I don't want to drag this out but there is an historical perspective you could bring to this that I think would be very valuable if you don't mind assisting us. You have been there a while and you have watched this happen.
LISTNUM 1 \l 11228 We heard this morning from the people at Rogers that the reason they dropped the news ‑‑ and this was Mr. Phillips who was in charge of the situation in Vancouver ‑‑ was there was just nobody watching it, not nobody but the numbers were so low that he described it, I think, as just simply a bad investment and that there were better ways to get the audience.
LISTNUM 1 \l 11229 Is that your experience, were the numbers that bad by the time they dropped it, and if they were, do you know why?
LISTNUM 1 \l 11230 MR. HAWKINS: Well, my experience is that ‑‑ and I am not privy to the ratings or to any of the financial ‑‑ but as somebody that has worked, you know, before CTV was even in that market, is that we were for quite a long time a strong number two.
LISTNUM 1 \l 11231 And even at the time in July 2006 when the programming decisions were made, there were some evenings that, we believe, we were very competitive with CTV.
LISTNUM 1 \l 11232 I guess my point to the larger question is that ratings certainly are a factor and we want to be competitive. As an employee, I want to work for a highly rated ‑‑ I want my work to be seen by as many people as possible.
LISTNUM 1 \l 11233 But there is also, I think, a really important element in the Vancouver market, that people have the choice and that the CRTC is in a position to encourage Rogers to give the people that work at CKVU ‑‑ to encourage Rogers to create a vehicle that will create that choice at a time of the day when people are watching television.
LISTNUM 1 \l 11234 It is probably worth mentioning that the people that are working on Breakfast Television, a lot of them are the same people that worked on the evening news program and these are very creative people.
LISTNUM 1 \l 11235 These are some of the best people I have had the privilege of working with and they give Breakfast Television a hundred percent, as I do. I try to do the best job that I can every day. I take pride in my work.
LISTNUM 1 \l 11236 But to be working for the Breakfast Television vehicle it just seems a shame that that is the only vehicle that this station has to tell the Vancouver story.
LISTNUM 1 \l 11237 COMMISSIONER LANGFORD: We hear you and we are grateful. I am personally anyway. I can tell you I find this very interesting and I will be looking forward to hearing what the folks from Rogers have to say in reply. I think you make a very persuasive case. I think you make a very persuasive case about their duty and the public interest and it will be interesting to hear what they say.
LISTNUM 1 \l 11238 Thank you very much.
LISTNUM 1 \l 11239 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11240 Madame Roy.
LISTNUM 1 \l 11241 THE SECRETARY: Thank you.
LISTNUM 1 \l 11242 We will now hear from Communications, Energy and Paperworkers Union of Canada to present their intervention.
‑‑‑ Pause
LISTNUM 1 \l 11243 THE SECRETARY: Please introduce yourself and you have 10 minutes to make your presentation. Thank you.
INTERVENTION
LISTNUM 1 \l 11244 MR. MURDOCH: Thank you.
LISTNUM 1 \l 11245 Thank you, Commission. We are delighted to be here.
LISTNUM 1 \l 11246 My name is Peter Murdoch. I am Vice‑President of Media for the Communications, Energy and Paperworkers Union. We represent about 25,000 people that work in the media, including employees at both Rogers and Citytv.
LISTNUM 1 \l 11247 I will be touching on a few of the same points as Mr. Hawkins but let me begin by saying that we are fully supportive and congratulate the Commission on its decision which brings us here today. It was the right decision to make.
LISTNUM 1 \l 11248 We welcome this opportunity to address Rogers application to buy the Citytv stations because among the many thousands of our members who work in radio, television and newspapers across Canada, hundreds work in some of the stations whose future lies with you today.
LISTNUM 1 \l 11249 Rogers obviously stands to gain or lose from your decision but it is just as true that the decision you reach will affect our members' jobs and indeed consumers of television.
LISTNUM 1 \l 11250 We haven't forgotten that less than a year ago CHUM laid off 281 people on exactly and precisely the same day that they announced the deal with CTV. Those layoffs had a direct impact on Citytv programming and led to the loss of local news programs.
LISTNUM 1 \l 11251 We raised these programming issues in our intervention. We said that local news matters not simply under the Act but directly to Canadians in their daily lives and we said that changes in ownership should not allow licensees to ignore the promises made in the applications for their licences.
LISTNUM 1 \l 11252 We also said that Citytv stations are still breaching their existing commitments from the licensing application process, their conditions of licence about programming and the CRTC's regulations requiring accurate program logs.
LISTNUM 1 \l 11253 I want to just move away from my script for a bit and touch on some of the issues that were raised this morning.
LISTNUM 1 \l 11254 The first one is "localness." First of all, I laughed when I heard that word. I hadn't heard it before but it reminded me ‑‑ I think it was John Daly but it was some comedian and commentator in America that coined the word "truthiness" and I wonder whether "localness" is much the same as "truthiness."
LISTNUM 1 \l 11255 I want to combine this with the phrase which also struck me this morning from another executive, which was "building predictable habits," and also with one other issue that was talked about, documentaries.
LISTNUM 1 \l 11256 Now, it strikes me that if there is a commitment on the part of Rogers to build predictable habits, why not build those habits in local news? Why not be able to do that, to build those habits in local news?
LISTNUM 1 \l 11257 It strikes me that if we are also prepared to say that more time and energy and resources should be given to documentaries, surely local news is nothing more than a collection of two‑minute documentaries that are contemporaneous with people's lives, that speak to issues, that speak to social justice, economics, education, a whole variety of issues but in a very compact time. But they are very much two‑minute documentaries.
LISTNUM 1 \l 11258 If there are those kinds of commitments that Rogers is prepared to make and with the very deep pockets that they have, one of the things that we would be most surprised at is that they wouldn't actually get back into the local news business because, you know what, I bet they could do a good job of it if they poured the money into it.
LISTNUM 1 \l 11259 We know, and as you just heard Mr. Hawkins say, there is the talent, capacity, energy and enthusiasm at Citytv stations to do the job well but it needs a commitment and I think it needs your energy and your enthusiasm to help the broadcaster move that kind of commitment along.
LISTNUM 1 \l 11260 My concern a bit about the idea that they weren't making money. You know, there are a lot of things in the broadcasting system that don't make money.
LISTNUM 1 \l 11261 We support CanCon and rightfully so. Your $78.7 million, we support that money but all that money isn't making money, it is supporting a Canadian cultural identity that is reflected on people's television screens.
LISTNUM 1 \l 11262 Well, why not local news? Surely, that has got to be important to people's lives.
LISTNUM 1 \l 11263 The suggestion that we can abandon local news because it is not making money, particularly in a concentrated market, means that we run the risk of having one newscast, not many newscasts, because if you allow ‑‑ and I don't know whether you folks were sitting when Mr. Asper earlier this year suggested that eight out of 13 Global newscasts weren't making money and that given the opportunity he might consider ditching them.
LISTNUM 1 \l 11264 We could end up within each market not competitive news gathering but single news gathering, and granted, it might be private sector but it is one voice. We need that competitive voice out there.
LISTNUM 1 \l 11265 We don't want to say, well, we are giving up because we are not making money.
LISTNUM 1 \l 11266 You know, I recall ‑‑ I think it was Homer Simpson's advice to Lisa once ‑‑ Lisa said: Well, I'm gonna try, and Homer said: Well, why bother trying, that's the first step towards failure.
LISTNUM 1 \l 11267 I would expect Rogers to have a completely different view of that world, particularly with the gem that they are getting with Citytv.
LISTNUM 1 \l 11268 I'll just go back to my script a bit. So, Rogers' reply to our intervention did not answer our concerns. Instead, Rogers says that CHUM had good reasons for cutting its local news programs, that the CRTC doesn't require television broadcasters to carry local news and if there are breeches of conditions of licence, these are not particularly significant since they are based on a mere difference of opinion over wording.
LISTNUM 1 \l 11269 In brief, our concerns were not addressed, but should they have been, we think that even a quick review of the CRTC's decision in their ownership transaction shows that the Commission has always welcomed new owners's commitments to raise their expenditures on an exhibition of local news.
LISTNUM 1 \l 11270 But since Rogers has simply dismissed or ignored our concerns, we cannot obviously support this transactions approval.
LISTNUM 1 \l 11271 Since it clearly isn't in your role of responsibility to fix every problem in Rogers' application, we think you should exercise your discretion to deny its application.
LISTNUM 1 \l 11272 First, Rogers simply isn't the best possible application here because it hasn't agreed to bring the Citytv stations up to their original programming commitments.
LISTNUM 1 \l 11273 We also believe that the best way to fix problems such as this one is not perhaps through conditions of licence, but perhaps it is through more competition. We felt that your decision was absolutely right on the Citytv deal.
LISTNUM 1 \l 11274 But we expect competition. Where is the competition in local news in Vancouver? It has disappeared. But there still are other reasons for saying no. Broadcasters are simply not the only ones who just take in our broadcasting system at an interest in its future.
LISTNUM 1 \l 11275 The Act specifically addresses this by requiring that the broadcasting system serve Canadians' needs through employment opportunities in the system. Since this applicant has not explained how approving its application will meet or improve Canadians' employment opportunities in its programs, the application should also be denied.
LISTNUM 1 \l 11276 The Act also requires local content and the CRTC's 1999 TV Policy requiring local news and return for advertising has not been set aside. The fundamental problem, of course, is that local news is difficult to repeat, reuse and recycle over and over again, unlike dramas or comedies.
LISTNUM 1 \l 11277 But since Rogers hasn't explained how approving this application will create more high quality news for people living in Calgary and Edmonton, for instance, why approve it as there might be others who would be willing to do just that.
LISTNUM 1 \l 11278 And finally, I would like to say and a good news about Rogers is I am a base‑ball fan, I've seen how much money Rogers has supported in the Blue Jays, I am grateful that they have, they are a competitive base‑ball team. I would like to see them to be a competitive news team.
LISTNUM 1 \l 11279 Thank you for the time.
LISTNUM 1 \l 11280 THE CHAIRPERSON: Thank you. I gather you're concerned with Rogers because I remember you coming before us on the CTV and clearly saying the City stations would be better in the hands of a different owner and not the CTV because your point which you've made was said even where also CTV had committed to separate news cast and separate news groups that were synthetic and really the only way to bring the new voice on to the table is to bring a new owner.
LISTNUM 1 \l 11281 MR. MURDOCH: Yes.
LISTNUM 1 \l 11282 THE CHAIRPERSON: Well, clearly, Rogers is the new owner. Rogers is not over the television right now, except for the religious station, they are not.
LISTNUM 1 \l 11283 Now, you are saying: yes, it's a new owner, but not the one I want because this one does not commit to the localness as well as it should.
LISTNUM 1 \l 11284 Do I take it from that that if Rogers, listening to you said: okay, we've committed to local programming in Vancouver, it would be acceptable to you? Because it seems that you've said, a new owner. Here, you have a new owner and you don't like this new owner and it's as far as I can see the only thing you don't like about this new owner is he doesn't have a local news program.
LISTNUM 1 \l 11285 MR. MURDOCH: Well, Mr. Chair, certainly we ‑‑
LISTNUM 1 \l 11286 THE CHAIRPERSON: But if I misrepresent you over this, please correct me.
LISTNUM 1 \l 11287 MR. MURDOCH: Well, I will, I'll answer. We certainly expected that new ownership rather than CTV would bring a more competitive position to the marketplace and for that, we are grateful.
LISTNUM 1 \l 11288 We are alarmed that particularly in this area, that we certainly have a heavy investment ourselves and as we do, I believe that Canadians and Western Canadians in particular do, that they would use their deep pockets, use to start to build competitiveness. That's the idea of having to build the competitors.
LISTNUM 1 \l 11289 So, we would be very sympathetic if they changed their mind on local news programming in their markets.
LISTNUM 1 \l 11290 THE CHAIRPERSON: Okay. Helen, you had a question?
LISTNUM 1 \l 11291 COMMISSIONER DEL VAL: I just want to get your views on why you feel that news is ‑‑ it seems like the only way to make a target of local programming as Commissioner Cugini so nicely summarized that the commitment is to produce a certain amount of local programming, but not specifically news? And so ‑‑
LISTNUM 1 \l 11292 MR. MURDOCH: Well, I had supposed we have always felt that there is an obligation on the media owners to produce good news. It's part of what they get in exchange for other advantages through regulation government policy legislation, et cetera and it just ‑‑
LISTNUM 1 \l 11293 COMMISSIONER DEL VAL : But they could ‑‑
LISTNUM 1 \l 11294 MR. MURDOCH: Just let me finish if I can. The other thing is that news and a variety of news and a variety of opinion about the news is what makes this country thick and it's what makes democracy go around.
LISTNUM 1 \l 11295 If we end up with single voice news organizations, which is where we're headed now, we run the risk of in some ways watering down our democracy and our ability to debate issues of very serious concern, which is I think I've mentioned to you once before. It might not be a problem in today's climate, but if things worsened, could be a very serious problem.
LISTNUM 1 \l 11296 THE CHAIRPERSON: I expect I will see you at the Safety proceedings?
LISTNUM 1 \l 11297 MR. MURDOCH: I certainly hope so. I hope I'm well and able to sit there.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11298 THE CHAIRPERSON: We will continue the dialogue on that very point.
LISTNUM 1 \l 11299 Any other questions? Thank you very much.
LISTNUM 1 \l 11300 MR. MURDOCH: Thank you.
LISTNUM 1 \l 11301 THE CHAIRPERSON: I believe we have one other person for today?
LISTNUM 1 \l 11302 THE SECRETARY: Yes. I would now ask Canadian Association of Film Distributors and Exporters to come forward.
‑‑‑ Pause
LISTNUM 1 \l 11303 THE CHAIRPERSON: Mr. East, it seems to be your role in life to be the last pick of the day.
LISTNUM 1 \l 11304 MR. EAST: Yes. Thank you.
LISTNUM 1 \l 11305 THE CHAIRPERSON: Since you were at the last time of the CTV hearing.
LISTNUM 1 \l 11306 MR. EAST: Yes, thank you.
LISTNUM 1 \l 11307 THE CHAIRPERSON: It was some relatively short trip because it was at the end of three days, so we move you up today so you can have your full ten minutes.
LISTNUM 1 \l 11308 MR. EAST: Thank you.
INTERVENTION
LISTNUM 1 \l 11309 MR. EAST: Good afternoon, Mr. Chairman and members of the Commission. My name is Ted East and I am President of the Canadian Association of Film Distributors and Exporters or CAFDE.
LISTNUM 1 \l 11310 CAFDE is a non‑profit trade association that represents the interest of Canadian owned and controlled feature film distributors and exporters.
LISTNUM 1 \l 11311 Our members include Alliance Lens Distribution, Crystal Films, Equinox Films, Maple Pictures, Mungo Media, Civil Pictures and I am pleased to say a very new member, Maximum Film Distribution that was just announced yesterday.
LISTNUM 1 \l 11312 CAFDE members distribute over 90 per cent of the non‑studio and Canadian films released theatrically in Canada each year. CAFDE members distribute films in Canada from all over the world and in the widest range of genres and budgets.
LISTNUM 1 \l 11313 I would like to take this opportunity to expand on some points made in our written intervention and make some comments and observations about the August 13th response to intervention letter from Rogers Media.
LISTNUM 1 \l 11314 I should say that CAFDE does support this application and we are encouraged by a number of changes to this application offered by Rogers in their August 13th letter, specifically their offer to increase or support for Canadian priority programming, and the Allan Waters Canadian content initiative and script and concept development initiative and their offer to restrict the programming overlap between the Citytv and on the programming schedules to ten per cent.
LISTNUM 1 \l 11315 We are concerned that Rogers is continuing to ask the Commission to improve an increase in the committed level of documentary features from ten to twenty hours per year. We continue to be opposed to this and are worried that Rogers insistence on this is an indication of their lack of appreciation for and commitment to feature films.
LISTNUM 1 \l 11316 As we've mentioned in our written intervention, an increase of documentary feature programming to 20 hours a year would be significantly out of proportion to the commitment of this, your honour, by the feature film industry at large.
LISTNUM 1 \l 11317 We are also concerned if there is no specific commitment to feature films anywhere in the Rogers' application, references to feature films are typically grouped with television drama. Indeed, in the Rogers' letter of August 13th on page 4.14, they refer to their intention to "support the production of Canadian feature films (e.g. the Act releases and Movies of the Week)"
LISTNUM 1 \l 11318 I should point out that Movies of the Week are not feature films. They are a noble and honourable cousin of the feature film to be sure, but they a distinct genre with significantly challenges and opportunities.
LISTNUM 1 \l 11319 Pretty much anyone who works in the entertainment and media industries would agree with the definition of feature film that is found in with the media. And it states: "A feature film is a term the film industry uses to refer to a film made for initial distribution in theatres".
LISTNUM 1 \l 11320 If you understand how important the Citytv stations have been to the Canadian feature film industry you can appreciate how important it is that these stations under the new ownership maintain the same level of support for feature films.
LISTNUM 1 \l 11321 In our written intervention, we pointed out that support for feature films by English Canadian over the air broadcasters was very weak when compared to the United Kingdom and that Citytv was the only over‑the‑air broadcaster to make a consistent and strong programming commitment to feature films, and I do mean feature films, not Movies of the Week.
LISTNUM 1 \l 11322 We also pointed out that any lessening of support for feature film by Citytv will have a material effect on the support CAFDE members offer Canadian films and I'm sad to say that this is already the case.
LISTNUM 1 \l 11323 In my discussions with CAFDE members about this hearing, several reported that they had not sold a film to Citytv in almost two years. When asked if this had an impact on their acquisition strategy of Canadian films, all of them said that it did.
LISTNUM 1 \l 11324 One mentioned that they had in the past six months passed on a number of Canadian films that two years ago they would have acquired. The reason was simple. Without the likelihood or strong possibility of a Citytv sale the acquisition was now too risky.
LISTNUM 1 \l 11325 In their written submission, CFTPA had made some passionate and articulate case about the challenges in the Canadian feature film industry and the need for Canadian broadcasters to play a greater role.
LISTNUM 1 \l 11326 CAFDE fully supports the CFTPA position and urges the Commission to ensure that the Citytv stations under Rogers ownership continue to play the critical role on the Canadian feature film industry that they had in the past.
LISTNUM 1 \l 11327 Thank you.
LISTNUM 1 \l 11328 THE CHAIRPERSON: Thank you. Explain to me the distinction between the noble and honourable cousin in a feature film, why is the Movie of the Week not a feature film? What's the difference?
LISTNUM 1 \l 11329 MR. EAST: You know, Movie of the Week is a film that has developed and produced for First Window on television. Feature film is a film that is designed, developed and produced to be in cinemas first, to be released subsequently on DVD home video, video on demand and then pay tv and then, finally, an over‑the‑air broadcast.
LISTNUM 1 \l 11330 THE CHAIRPERSON: And the difference being in terms of cost and production, where is the difference? I mean ‑‑
LISTNUM 1 \l 11331 MR. EAST: Well, there is no others. It's hard to define a difference in costs because you can have a theatrical feature film that costs a fraction of what a typical Movie of the Week makes. But in the general film industry, a feature film, a theatrical feature film or feature film is more expensive than a Movie of the Week.
LISTNUM 1 \l 11332 And another important thing is there is a ‑‑ I want to phrase this carefully ‑‑ but there is a distinct difference in the content of the film. A feature film has to be compelling in a way that attracts people to leave their home, park the car, take the transit system, hire a baby‑sitter, pay money to sit down and then, you know, then come home, whereas a Movie of the Week, people do not have to go through that effort.
LISTNUM 1 \l 11333 So, by its very nature, a feature film has to be a different kind of beast.
LISTNUM 1 \l 11334 THE CHAIRPERSON: You mentioned in paragraph 14 of your submission that they haven't been able to sell any ‑‑ your colleagues have not been able to sell films to City because the City sale being in the air, the acquisition was too risky.
LISTNUM 1 \l 11335 If once City is owned by Rogers, wouldn't all that change?
LISTNUM 1 \l 11336 MR. EAST: We hope so.
LISTNUM 1 \l 11337 THE CHAIRPERSON: So, why does it cost your support? Why aren't you fully supporting it because, I mean, City will be undoubtedly in strong financial hands? You have heard from Rogers in their submission. They support Canadian films, they will show them and so, I am not quite sure what exactly you feel they should be doing that they are not doing?
LISTNUM 1 \l 11338 I have said a point about a documentary so that you feel that increasing documentaries will cut into feature films, but besides that, what is it about Rogers' plan that leads you to modify your support?
LISTNUM 1 \l 11339 MR. EAST: Well, I think the first thing we would like is for everybody to agree that a feature film is, in fact, a definition that we all believe in. It is not a Movie of the Week. That would be of great comfort to us.
LISTNUM 1 \l 11340 Or if Rogers says they're committed to Canadian feature films and they're going to program this many a year, we would feel comfortable knowing that that is feature films and not including Movie of the Week.
LISTNUM 1 \l 11341 THE CHAIRPERSON: Okay. Any questions from my colleagues? Rita?
LISTNUM 1 \l 11342 COMMISSIONER CUGINI: Thank you. Mr. East, of course Rogers is primarily an English language broadcaster and will be more so in the acquisition of the City stations.
LISTNUM 1 \l 11343 How many Canadian films are released theatrically in the English language, per year?
LISTNUM 1 \l 11344 MR. EAST: How many per year? Between 35 and 50 I would imagine.
LISTNUM 1 \l 11345 COMMISSIONER CUGINI: You are aware that the condition of licence by which they're asking to abide or to continue to comply with does include Movies of the Week?
LISTNUM 1 \l 11346 MR. EAST: Yes.
LISTNUM 1 \l 11347 COMMISSIONER CUGINI: So, obviously it's your suggestion that they should have asked for an amendment to that condition of licence wherein only theatrically released feature films?
LISTNUM 1 \l 11348 MR. EAST: Yes.
LISTNUM 1 \l 11349 COMMISSIONER CUGINI: Including the ten hours of documentaries?
LISTNUM 1 \l 11350 MR. EAST: Yes.
LISTNUM 1 \l 11351 COMMISSIONER CUGINI: You don't object to maintaining those ten hours?
LISTNUM 1 \l 11352 MR. EAST: No.
LISTNUM 1 \l 11353 COMMISSIONER CUGINI: Okay. Thank you very much. Thank you.
LISTNUM 1 \l 11354 THE CHAIRPERSON: Okay. Thank you very much. And that concludes for today We will resume tomorrow morning.
LISTNUM 1 \l 11355 Madam Roy will tell you when in a moment and we will hear from the remaining interveners and the response from Rogers and ask Rogers in their response tomorrow to specifically address the issues that we've heard so much about this afternoon about local news and especially in the Vancouver area, which came up several times and also the point faced by our intervenors.
LISTNUM 1 \l 11356 Thank you very much. We will see you tomorrow.
LISTNUM 1 \l 11357 THE SECRETARY: We will resume at 9:30 tomorrow morning. Thank you.
‑‑‑ Whereupon the hearing adjourned at 1546, to resume
on Thursday, August 30, 2007 at 0930 / L'audience
est ajournée à 1546, pour reprendre le jeudi
30 août 2007 à 0930
REPORTERS
____________________ _____________________
Johanne Morin Monique Mahoney
____________________ _____________________
Jennifer Cheslock Madeleine Matte
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