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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
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)
May 1st, 2007 Le 1er mai 2007
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
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.
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
Conseil de la radiodiffusion et des
Transcript / Transcription
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Konrad W. von Finckenstein Chairperson / Président
Rita Cugini Commissioner / Conseillère
Helen del Val Commissioner / Conseillère
Stuart Langford Commissioner / Conseiller
Elizabeth Duncan Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary / Secrétaire
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)
May 1st, 2007 Le 1er mai 2007
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
INTERVENTION BY / INTERVENTION PAR:
Suzette Couture 259 / 1590
Jack Rabinovich 261 / 1606
Jully Black 265 / 1627
Universal Music 270 / 1652
Plasma Management & Productions Inc. 274 / 1669
Corner Gas 304 / 1830
Epitome Pictures 313 / 1888
Patrick J. Hurley 348 / 2052
Communications, Energy and Paperworkers 365 / 2159
Union of Canada
Illusions Entertainment Corporation 389 / 2310
Canadian Broadcasting Corporation 416 / 2486
ACTRA 465 / 2815
Writers Guild of Canada 495 / 3010
Canadian Recording Industry Association 512 / 3097
Canadian Independant Record Production 526 / 3177
Seneca College School of Communications Arts 536 / 3241
Manitoba Motion Picture Industry Association 549 / 3305
Canadian Film and Television Production 556 / 3347
Alberta Motion Picture Industries Association 579 / 3454
Association of Canadian Advertisers 587 / 3504
Canadian Association of Film Distributors 595 / 3560
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Tuesday, May 1st, 2007 at 0905 /
L'audience débute le mardi 1er mai 2007 à 0905
LISTNUM 1 \l 1 \s 15811581 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 11582 Today is interventions day so we will be listening to the interventions. We will listen to you in groups and then we will have questions for you.
LISTNUM 1 \l 11583 If we do not have questions for any person in particular, it doesn't mean that we didn't listen to you or didn't appreciate your intervention, it just means your submission was clear and needs no further elucidation.
LISTNUM 1 \l 11584 Before we proceed, Madam Boulet, you have certain announcements?
LISTNUM 1 \l 11585 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 11586 Good morning, everyone.
LISTNUM 1 \l 11587 We will start by the first panel of five supporting intervenors. We have Ms Suzette Couture, Jack Rabinovitch, Jully Black, Universal Music and Plasma Management & Productions Inc.
LISTNUM 1 \l 11588 We will start with Ms Suzette Couture and you each have 10 minutes for a presentation.
LISTNUM 1 \l 11589 Please go ahead, Ms Couture.
LISTNUM 1 \l 11590 MS COUTURE: Good morning, Mr. Chairman, Commissioners.
LISTNUM 1 \l 11591 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 11592 MS COUTURE: Thank you for the opportunity to appear before you today in strong support of the CTVglobemedia's application to acquire CHUM Limited.
LISTNUM 1 \l 11593 My name is Suzette Couture and I am a screenwriter who lives and works in Canada. My first feature film "La Florida" won the Golden Reel Award for the highest grossing Canadian movie of the year; my miniseries "Jesus" for CBS in the United States was nominated for an Emmy; and my last movie, for CTV, "The Man Who Lost Himself" was the highest‑rated television movie of 2005.
LISTNUM 1 \l 11594 But enough about me. I strongly believe that the marriage of CTV and CHUM will bring more opportunities for high quality Canadian television. CTV's commitment to achieving the highest possible quality in everything they do to support Canadian television and their stated commitment to nurture CHUM's differences can only mean that some very exciting television will be coming to our screens.
LISTNUM 1 \l 11595 Bringing together CTV and CHUM will give them each greater strength in an entertainment world that is now almost borderless.
LISTNUM 1 \l 11596 Bringing them together will also allow for greater opportunities to foster emerging talent. Both companies have a dedication to developing emerging writers, directors and actors, and I believe this transaction will expand that capacity to nurture talent and showcase it on a larger scale.
LISTNUM 1 \l 11597 For that reason, I am also in full support of the proposed CHUM Writer Only Benefit. The BCE/CTV Writer Only Benefit provided emerging writers and experienced writers with an unparalleled opportunity. Writers must be moved by a story or an idea in order to fully pursue it with the kind of passion needed to write an exceptional script. Sometimes that idea or story is a producer's and sometimes it is the writer's own. The proposed Writer Only program is a rare opportunity for a writer to develop his or her own idea before involving a producer.
LISTNUM 1 \l 11598 This is what writer's dream of, creative freedom in the early stages. This kind of authorship is what has resulted in television history's finest programs.
LISTNUM 1 \l 11599 Providing key support to feature films and committing to maintaining CHUM's past levels of support for Canadian film is important for our industry as well. To that extent, I am really excited by the drama funding included in the proposed benefits package for feature film, as well as that provided for television drama.
LISTNUM 1 \l 11600 In the end, all successful shows come down to the passion of the writer and the words that she puts down the page. It will always be critical to the success of our industry that writers are allowed the freedom and the opportunities to create those stories, stories which will find an audience here at home and around the world.
LISTNUM 1 \l 11601 I have every confidence that the proposed acquisition of CHUM by CTV will enhance that freedom and opportunity to create.
LISTNUM 1 \l 11602 I thank you for this opportunity.
LISTNUM 1 \l 11603 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11604 THE SECRETARY: Thank you.
LISTNUM 1 \l 11605 We will continue with Mr. Jack Rabinovitch's presentation.
LISTNUM 1 \l 11606 MR. RABINOVITCH: Good morning, Mr. Chairman, Members of the Commission. My name is Jack Rabinovitch and I am here to support the proposal by CTVglobemedia to acquire effective control of CHUM Limited.
LISTNUM 1 \l 11607 The reason for my support is quite simple, they have done an outstanding job of supporting Canadian literature, Canadian authors and Canadian publishers.
LISTNUM 1 \l 11608 As you may or may not know, I am the founder of the Giller Prize for Canadian fiction. I set it up in 1994 with my late friend Mordecai Richler to honour my wife Doris, who was a great lady and a prominent woman of letters, and to support Canadian fiction. In 2005, Scotiabank became a partner and it is called the Scotiabank Giller Prize.
LISTNUM 1 \l 11609 My direct association with CTVglobemedia started in the summer of 2005. The CBC, which had previously televised the Giller, had a strike and was in turmoil regarding their program planning. I therefore called Ivan Fecan and asked if he could help, and here I quote him. He said "Jack, I understand that the Canadian publishing industry is in trouble and I would like to be part of the solution."
LISTNUM 1 \l 11610 He offered the Giller Foundation a five‑year contract and told me to speak to Susanne Boyce about making it happen. And she did. CTV put their full promotional communication and programming resources behind the Giller Prize.
LISTNUM 1 \l 11611 The first year CTV aired the show was in 2005, and they did that in record time. It was aired live on CTV Newsnet and later on the main network. It was cross‑promoted on TALK TV and a number of other CTV services and the result in terms of viewership was outstanding.
LISTNUM 1 \l 11612 But in 2006 CTV really pulled out all the stops. They took a major risk and broadcast the Giller live in prime time on CTV main channel. I repeat, prime time from 9:00 to 10:00.
LISTNUM 1 \l 11613 The show reached an unprecedented television audience of 550,000 people, an astounding figure for a literary award shall and an unprecedented breakthrough for Canadian literature and its authors.
LISTNUM 1 \l 11614 In addition, CTV streamed a live feed of the show over CTV broadband network, making it the first broadcaster in Canada to deliver a Canadian network awards program live on broadband. CTV promoted it daily on all its services, produced it and showcased it to the hilt.
LISTNUM 1 \l 11615 Just as Ivan Fecan and Susanne Boyce had promised, CTV did a sensational job.
LISTNUM 1 \l 11616 That broadcast and the promotion that preceded it was a major breakthrough for Canadian literature. Because of CTV's strong programming and promotion which brought the Giller Prize such a great audience, book sales exploded for the Giller's nominees.
LISTNUM 1 \l 11617 Last year's winner was a doctor named Vincent Lam who saw his book "Bloodletting and Miraculous Cures" sail to the top of Canadian bookseller list and it sold in excess of 200,000 copies, a first in Canadian book sales.
LISTNUM 1 \l 11618 The other short‑listed authors also benefited because they enjoyed a major spike in their sales.
LISTNUM 1 \l 11619 I tell you this story not just to laud what CTV has done for Canadian literature, Canadian authors and the Canadian publishing industry, but to point to CTV's commitment to Canadian culture.
LISTNUM 1 \l 11620 CTV understands the importance of flagship events like the Giller Prize and understands what their partnership can do for Canadian authors. Because of this commitment, I am confident they will be great owners for CHUM, which itself plays an important role in showcasing Canadian talent.
LISTNUM 1 \l 11621 I think CHUM will flourish under CTV's leadership and I therefore ask the Commission to support CTV's application.
LISTNUM 1 \l 11622 Thank you.
LISTNUM 1 \l 11623 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11624 THE SECRETARY: Thank you.
LISTNUM 1 \l 11625 We will continue with the presentation of Jully Black.
LISTNUM 1 \l 11626 Thank you.
LISTNUM 1 \l 11627 MS BLACK: Good morning, Mr. Chairman and Members of the Commission. I would like to thank you personally for the opportunity to share my views on why I support the transfer of the ownership and for giving me the opportunity to share my perspective.
LISTNUM 1 \l 11628 My name is Jully Black. I am a singer, I am a songwriter, but first of all I am the youngest of nine children born to an immigrant mother who came to this country with just a dream ‑‑ just a dream. As a songwriter in this country I feel that we need to protect our borders and nurture and take care of our wealth.
LISTNUM 1 \l 11629 Over the course of my career I was fortunate enough to have the opportunity to tour Canada many, many times, not only on my own but in support of the Black Eyed Peas, who we all know are a huge American band.
LISTNUM 1 \l 11630 As an artist, I can tell you that this transaction means more than a lot to the music community in Canada. The significant benefit dollars that will result from this transaction will enable more artists like me ‑‑ and I say "like me" ‑‑ so you know that I am 29 years old and I am carving out a road and walking on the road at the same time. I am willing to take a blow to be a pioneer, to diversify the face of Canadian music. Without the benefit dollars, this is not possible.
LISTNUM 1 \l 11631 The development of my career has greatly been helped by FACTOR and Radio Starmaker Fund and, like just about every emerging artist in Canada, I have had to rely on these funds in order to pay for the high cost of recording, touring, production, making music videos, et cetera. If this funding did not exist, I don't know many Canadian artists or record companies that would be able to break artists and build the profile necessary to have a successful career in this country and abroad.
LISTNUM 1 \l 11632 FACTOR and Starmaker will see their budgets increased greatly thanks to the benefit packages proposed by CTV. Without this benefit money, many, many voices would not be heard and, to be quite honest, we run the risk of our industry becoming extinct.
LISTNUM 1 \l 11633 A career in music is harder now than ever before, being illegal downloading, theft of my music personally. I was stolen from 2.5 million times by the sake of illegal downloading and many, many others. Illegal downloading and theft of my music, and many others, continues unabated, while the cost of recording and touring increase.
LISTNUM 1 \l 11634 There is a growing amount of competition out there, not just from other artists, but also from other entertainment sources and we are all vying for the listener's attention and dollars. If we as Canadian musicians did not have FACTOR and Starmaker, we would easily drown in the torrent of American and foreign content that floods across the borders. Again, we need to protect our borders.
LISTNUM 1 \l 11635 I have seen firsthand how the power of airplay on radio and television, supported by promotion and entertainment news coverage, can boost an artist's profile.
LISTNUM 1 \l 11636 At this very moment I would like to take a moment to acknowledge the profile. My profile is bigger than my record sales, and that's okay, because CTV had vision. They picked this little girl from Jane and Finch and said "You have talent. You don't have a journalist degree, you don't have any degree as first television is concerned, but you have talent. We trust you."
LISTNUM 1 \l 11637 And Susanne Boyce, my hero, gave me a chance. She gave me a chance. CHUM‑FM was an early believer in Jully Black. R&B ‑‑ I am a rhythm and blues singer, which is in its infancy. There is no way that at 29 years old I am the pioneer of an industry in this country that has been around for eons, right, but CHUM‑FM ‑‑ and right now I would like to shout out Rob Farina.
LISTNUM 1 \l 11638 Rob Farina played a song that I wrote for my mother called "I Travelled", because she came to this country and worked for $1.68 an hour and one by one by one brought her children from Jamaica, so I could dream in 1977.
LISTNUM 1 \l 11639 In 2004 the release of my own CD, "This Is Me" ‑‑ 2005, I'm sorry ‑‑ came out with Universal Music Canada, sake of the support of CHUM‑FM. We need the resources. We need to feed the people. This is a business, right?
LISTNUM 1 \l 11640 Thanks to the outlets such as eTalk Daily and CHUM radio stations, MuchMusic, MuchMoreMusic, City News and Star, I now have a solid foundation and a high enough profile to build my career, both home and abroad.
LISTNUM 1 \l 11641 When I reflect back to the 13 years as a professional singer and songwriter, and performer, I am most proud of gaining national recognition in my very own country, because I don't feel that we should be exiled. We need to build our army here and be able to compete globally as Canadian musicians.
LISTNUM 1 \l 11642 We have the strongest and biggest exports, whether you are a singer/songwriter, comedian, screenwriter, you name it. We have David Foster, we have Shania, we have Celine, but they left in order to come back and then their stock was raised. We need to stop that. We need to eliminate that.
LISTNUM 1 \l 11643 Music has the ability to reach beyond borders and boundaries. It is the only language that every race, culture, religion ‑‑ we all speak music and we need to understand that it's an art form that is that the risk, again, of becoming extinct.
LISTNUM 1 \l 11644 I think the joining of these two complementary companies, television and music ‑‑ a lot of times they don't understand each other, but it is a husband‑and‑wife scenario. We could build a family. Husbands don't understand wives all the time, we know that.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11645 MS BLACK: Okay? But it's a marriage and I think that it is a match made in heaven.
LISTNUM 1 \l 11646 CTV has vision. It doesn't matter what these budgets are saying. You could have millions and millions of dollars, but if you don't know what to do with it, it doesn't really matter. And CTV and CHUM has vision and that is what we also need to acknowledge.
LISTNUM 1 \l 11647 CTV is making a positive contribution to Canadians and for this reason I, Jully Black, support this transaction.
LISTNUM 1 \l 11648 I would like to thank you, the Commission, for granting me your time to share my personal journey and I thank you.
LISTNUM 1 \l 11649 I welcome any questions that you have.
LISTNUM 1 \l 11650 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11651 THE SECRETARY: We will continue with the presentation of Mr. Randy Lennox of Universal Music.
LISTNUM 1 \l 11652 MR. LENNOX: To begin, I just want to echo and congratulate you, Jully, for great words there.
LISTNUM 1 \l 11653 MS BLACK: Thank you.
LISTNUM 1 \l 11654 MR. LENNOX: Fantastic.
LISTNUM 1 \l 11655 Good morning, Mr. Chairman and Commissioners, and thank you for the opportunity to appear today in support of the application by CTVglobemedia to acquire CHUM also.
LISTNUM 1 \l 11656 My name is Randy Lennox and I am Canadian born and raised. I have worked my entire adult life in the Canadian artist industry in a variety of different positions, and today I am the CEO of Universal Music here in Canada. We are Canada's leading record company releasing over 1,000 CDs both digitally and physically per year, representing over 35 Canadian‑owned labels and 140 Canadian artists. These artists include such diverse artists as Paul Anka, Bruce Coburn, Shania Twain, Diana Krall, Lorena McKinnon, and Nelly Furtado.
LISTNUM 1 \l 11657 I am also the Vice‑Chairman of Canada's Walk of Fame which airs in partnership with CTV. I am on the Executive Board of the Canadian Association of Recording Arts and Sciences which runs the Juno Awards each and every year in partnership with CTV, and I am also on the Advisory Board of MusicCan, a charity program that puts musical instruments in much‑needed school programs across Canada; again, a charity that CTV is very much involved with.
LISTNUM 1 \l 11658 However, I am here first and foremost as the CEO of Universal Music Canada and we wholeheartedly support this application.
LISTNUM 1 \l 11659 It is my firsthand experience over a period of several years that CTV shares our passion and commitment for Canadian artists and for music in general. Their focus on artist development, both spiritually and financially illuminate this point, whether it's our industry's partnership on those Juno awards which helps raise industry sales 40 percent each and every week after it airs each year; the Canadian Idol phenomenon which finds and develops brand new Canadian superstars or their everyday music commitment of media time through eTalk Daily. It is clear to me that music, particularly Canadian music, is CTV's priority.
LISTNUM 1 \l 11660 And like Universal Music, CTV recognizes that we compete every day with American content given our proximity to the United States. Their idea to take the Juno Awards not only nationwide but worldwide shows a like‑minded ambition with the music industry to raise our Canadian artists' awareness not only here at home but around the world through their media efforts.
LISTNUM 1 \l 11661 And CTVglobemedia's leadership and track record to music makes them the ideal custodian for CHUM; CHUM who by the way is another culture whose stations and brands are very focused in the music space and partnership with our industry. Incredible brands such as MuchMusic, the NewMusic, have seen Canadian artists nurtured and celebrated for decades now.
LISTNUM 1 \l 11662 The development of VideoFACT, a funding organization invented and managed by the CHUM group to help Canadian artists make and develop videos here at home. And this has helped us at home and developed, as Jully said, artists for the world.
LISTNUM 1 \l 11663 So I am heartened by CTV's commitment to maintain the unique culture that the CHUM television and radio properties represent. On the radio side we are also pleased as an industry to see that CTV and CHUM are both committed to the continuing dialogue towards the establishment of industry benchmarks for airplay and promotion of our new and emerging artists. We look forward to continuing work with CTV and CHUM towards this common objective.
LISTNUM 1 \l 11664 Out of necessity, the music industry in Canada and around the world has seen much consolidation. In fact, Universal Canada is the product of two merged organizations ourselves and in the seven years since we began as one merged company our Canadian artists' commitment has helped us gain an additional 25 percent market share in growth during difficult times. This has kept us at a market leadership position while always being focused on offering a wide array and variety of choices for the Canadian music‑buying public. We spend our time on diverse artist development and Canadians benefit.
LISTNUM 1 \l 11665 So I believe that both CTV and CHUM will continue to act in the spirit of this artist development because Universal is proof that it is not size that matters in business as much as what you do with that size.
LISTNUM 1 \l 11666 CTV's priority and emphasis and the commitment to maintain CHUM's culture will benefit Canadians and, again, we support wholeheartedly this merger of two great Canadian companies.
LISTNUM 1 \l 11667 THE SECRETARY: Thank you, Mr. Lennox.
LISTNUM 1 \l 11668 We will continue with the presentation of Mr. Farley Flex from the Plasma Management & Productions Inc.
LISTNUM 1 \l 11669 MR. FLEX: Good morning, and thank you, Chairman and Commissioners.
LISTNUM 1 \l 11670 I appreciate the opportunity to appear here today. I am here to speak in support of the application of CTVglobemedia to acquire CHUM Limited.
LISTNUM 1 \l 11671 My name, as mentioned, is Farley Flex and I am a Canadian music business entrepreneur. For the past 20 years I have built a multifaceted career in the Canadian music industry as a producer, manager, radio station music director, DJ, entrepreneur and probably my most‑known role as a judge on Canadian Idol. But I am here today first and foremost as an artist manager working primarily in the urban music industry.
LISTNUM 1 \l 11672 I support this application for the following three reasons:
LISTNUM 1 \l 11673 CTV is the ideal candidate to preserve the unique contributions and nature of the CHUM services.
LISTNUM 1 \l 11674 Secondly, this transaction will increase the diversity of choice to Canadians.
LISTNUM 1 \l 11675 And, lastly, the $42 million in benefits that will flow to the Canadian music industry.
LISTNUM 1 \l 11676 Allow me to elaborate. I believe CTV is an ideal candidate to preserve the unique contributions and nature of the CHUM services. Each of these companies has played a distinct role in fostering Canadian music talent and I believe that this will continue under the new ownership structure. CTV have shown themselves to be true champions of Canadian culture and talent. Their track record with Corner Gas, Canadian Idol, the Junos and eTalk Daily is impressive to say the least.
LISTNUM 1 \l 11677 CTV's commitment, not just to make Canadian programming but to make successful widely‑viewed Canadian programming is unquestionable and has been proven over and over again.
LISTNUM 1 \l 11678 I also believe in the importance of having a 100 percent‑owned Canadian broadcasting company nurturing those CHUM stations. CTV realizes that it takes special care, patience and financial investment to create Canadian hits and Canadian stars. This builds success not just for CTV but for the artists in those shows.
LISTNUM 1 \l 11679 A strong company with substantial financial resources is also important in the fight to keep Canadian voices heard above the increasing noise of foreign and unregulated sources coming into Canada. Those financial resources are also necessary when it comes to building Canadian artists up to a level where they can thrive on the global stage, something that is important for the artists' artistic and financial development and to bring our Canadian culture to the rest of the world.
LISTNUM 1 \l 11680 I also support this application because I believe it will increase the diversity of voices in the broadcasting system. We saw this happen in radio when the Commission changed its policy to allow an operator to own two FM and two AM stations in each market. The Commission understood that this was no threat to the amount of choice available to listeners but a means to ensure more choice. This has been proven in market after market. In Vancouver, for example, CHUM owns four stations each with a distinct format and unique target audience. It is simply good business.
LISTNUM 1 \l 11681 Lastly, I would like to speak about the proposed benefits package. CTVglobemedia support for FACTOR and Starmaker is vital to the health of the music industry. I welcome and applaud the $42 million in additional funding and music‑related projects. It will make a tangible positive difference to the Canadian music industry.
LISTNUM 1 \l 11682 Thank you and I am ready to take any questions you might have.
LISTNUM 1 \l 11683 THE CHAIRPERSON: Thank you very much. Thank you for all your testimonials. You obviously believe very strongly in CTV and what it can do for CHUM.
LISTNUM 1 \l 11684 Now, I assume you were yesterday in the audience or else you read the papers, so you know that this is a problematic application for us because it doesn't really fit within our rules and we made that perfectly clear yesterday.
LISTNUM 1 \l 11685 Mr. Fecan made it quite clear that Citytv will be sold. It is a very valuable item. If he doesn't buy it or we don't allow him to buy it, somebody else will buy it. So really, the key question for us and you have sort of ‑‑ not really addressed and I would like to put a point to it, what would be the best difference if Rogers, let's say for argument, bought City rather than CTV? You all made the case for strong Canadian artists, funding, industry, champion somebody who pushes you, et cetera, but I am not ‑‑ I would like to see your views as to why this champion whom you obviously think very highly of, will be superior to whomever other players there may be in the Canadian industry.
LISTNUM 1 \l 11686 I am just mentioning Rogers as a name that comes to mind because they are buying the A‑Channel, but if you could address that to us that would be very useful. So whoever wants to take it on?
LISTNUM 1 \l 11687 MR. FLEX: I will begin with that.
LISTNUM 1 \l 11688 You know, I think that when I can look at CTV acquiring CHUM and maintaining the unique culture of CHUM versus anyone else, two things come to mind, experience and leadership. You know, in dealing with CTV everyday they are completely invested spiritually and financially in the space. They understand it better than anyone, and the leadership of the organization as has been suggested this morning, the competency and vision is second to none.
LISTNUM 1 \l 11689 So if you were to line up four or five companies that could all have the wherewithal to buy CHUM, CTV would still come out ahead just because they will maximize value for the Canadian consumer and they will keep their word. And I was here yesterday and heard every word that was said. They will keep their word as to what they will do in terms of the zero overlap and the cultural sovereignty of both of these networks of radio and television stations. So I think that's a very important thing for them to sustain and they will do it.
LISTNUM 1 \l 11690 And I am not suggesting Rogers wouldn't but I am saying that CTV is very qualified to do so because they have lived in this space all of their lives with respect to these other multimedia companies who have not.
LISTNUM 1 \l 11691 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 11692 Ms Black.
LISTNUM 1 \l 11693 MS BLACK: Personally, you are not going to go to a dentist that has no teeth, you know.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11694 MS BLACK: So let's be honest, right? And I think ‑‑ you see, I just ‑‑ let's just be real.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11695 COMMISSIONER LANGFORD: You want to come and sit up here, I think.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11696 COMMISSIONER LANGFORD: We are ready for ‑‑ I can't match that. I am ready to retire now, you know.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11697 MS BLACK: But on a serious note, I mean, CTV has number one, vision; number two, the cool factor. Yesterday, I sat here and I listened to people speak about why not we be ‑‑ why don't we be safe and appeal to the older audience, the buying audience? Well, they are going to die, okay.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11698 MS BLACK: And the reality is that the younger generation ‑‑ that CTV is setting up without even realizing an apprentice system. They are passing the baton onto the next generation.
LISTNUM 1 \l 11699 And no disrespect to Rogers or anybody else, but if they were to get ‑‑ if they were to acquire CHUM they are going to have to hire everybody from CTV anyway. So you know it's like Tommy Hilfiger doesn't make his own clothes. He hires the people to do it. CTV knows what they are doing. They have teeth in their mouth.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11700 MS BLACK: That's the reality. So you can't beat experience and a company that is willing to make ‑‑ to take a high risk situation and deal with the circumstance. They are okay with whatever the outcome is.
LISTNUM 1 \l 11701 Change is growth. That's why CTV should acquire CHUM.
LISTNUM 1 \l 11702 COMMISSIONER LANGFORD: Okay.
LISTNUM 1 \l 11703 MR. FLEX: My good friend Jully Black.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11704 MR. FLEX: I have proposed to this woman about 40 times, just so you guys know.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11705 COMMISSIONER LANGFORD: Even after you heard her views on husbands and wives you still proposed?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11706 MR. FLEX: Even ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11707 COMMISSIONER LANGFORD: You are a brave man.
LISTNUM 1 \l 11708 MR. FLEX: Even after that, even after that.
LISTNUM 1 \l 11709 COMMISSIONER LANGFORD: Yes, you keep lifting those weights.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11710 MR. FLEX: That's the whole idea.
LISTNUM 1 \l 11711 COMMISSIONER LANGFORD: You are going to need it.
LISTNUM 1 \l 11712 MR. FLEX: That's the whole idea.
LISTNUM 1 \l 11713 MS BLACK: Or his chequebook. He could lift the chequebook.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11714 MR. FLEX: What I wanted to emphasize, and I mentioned it actually on my way here this morning is that, you know, growing up as a black person in this country, CHUM has been the flagship station in terms of ethnic diversity. When you grow up in the city of Toronto and there is no question that Citytv was the first media entity to truly reflect the diversity of Toronto and we all know how great the diversity of Toronto is.
LISTNUM 1 \l 11715 And to be enhanced by the "deep pockets" of CTV, I think, is an important point as well because with the spirit of the CHUM group being held intact and the vision that they have had over the years in terms of representing the cultures and the great diversity and all of the different aspects of colour that they show on that TV screen, I think it is really important to emphasize that having an enhanced opportunity to do that will just enhance what it already is, which is a respectful and I guess you could say inclusive and fully open door system.
LISTNUM 1 \l 11716 Like my career was built an opportunity for an artist that I managed named Maestro Fresh Wes to walk into Electric Circus and get a record deal walking out the door on Queen Street. That's literally what happened, right, and my opportunity now as a judge on Canadian Idol.
LISTNUM 1 \l 11717 I do a tremendous amount of community work and for me to go into communities, aboriginal, you name it, all the marginalized communities across this country and have young people be willing to listen to what I have to say because they think that someone special is coming to see them, right, and then I can impart on them the other aspects of my life and the work that I do to uplift them; these are all opportunities that are enhanced indirectly and directly through my association with both entities. So you know it's a no brainer for me in so many respects because I see it happen every single day.
LISTNUM 1 \l 11718 I received a phenomenal award on Saturday evening for an organization called "The Black Business and Professional Association" and the award was in arts, media and entertainment and it was for community service and my professional work, and all of that is built on the foundation of an opportunity that began with CHUM, right, and then now is flourishing with CTV. So that is why I am here.
LISTNUM 1 \l 11719 Thank you.
LISTNUM 1 \l 11720 THE CHAIRPERSON: Mr. Rabinovitch.
LISTNUM 1 \l 11721 MR. RABINOVITCH: Yesterday, as I was listening I heard a lot of discussion about expectation and commitment and I think that the five first intervenors here have demonstrated, I think very clearly, that forget commitment, forget expectation; CTV has demonstrated support and endorsement of Canadian artists and literature and in music.
LISTNUM 1 \l 11722 THE CHAIRPERSON: I was fascinated by your little story about the Giller prize. I mean, I would have thought that this was something that you know was ready‑made for CBC and, yet, you had to go to CTV to get the exposure. What is the difference in attitude between CBC and CTV here that led to ‑‑ how would you analyse it?
LISTNUM 1 \l 11723 MR. RABINOVITCH: I think that they were in turmoil, as I said. The strike sort of fouled up their program planning and they didn't know exactly what to do, and the strange part about it is that the young group that Susanne Boyce put together had many booklovers in it, and when you see kids between the ages of 18 and 25 reading books and passionate about books it's quite a wonderful experience.
LISTNUM 1 \l 11724 THE CHAIRPERSON: Go ahead.
LISTNUM 1 \l 11725 MS COUTURE: Oh, just lastly I would like to say that CTV gets it. They understand the audience, they understand story.
LISTNUM 1 \l 11726 I mean, for a writer the worst thing to do is to write a script and put so much of yourself into it and actually come up with what you think is a very compelling script that will attract audiences and then the execution of it and the promotion of it falls so far short that your efforts are ‑‑ you know, they vanish and the audience isn't there. And Jully said it, you know, it doesn't how much money is in the budget. It's how you use that money and who is making it happen.
LISTNUM 1 \l 11727 I think that my experience with CTV, one of the reasons I have remained in Canada even though I continue to work in the U.S., is because they get it. They understand the audience. They promote things beautifully and they are not just doing Canadian programming because they have to. They actually treat it as, you know, a great value for the audience. I just can't imagine who else would do a better job.
LISTNUM 1 \l 11728 THE CHAIRPERSON: Okay, thank you.
LISTNUM 1 \l 11729 Commissioners, any questions?
LISTNUM 1 \l 11730 Helen.
LISTNUM 1 \l 11731 COMMISSIONER DEL VAL: Just one question, just one question for the writers, Ms Couture and Mr. Rabinovitch.
LISTNUM 1 \l 11732 Now, I don't know whether you had a chance to take a look at the intervention of Illusions Entertainment Corporation where they criticize the writers‑only initiative and they said that ‑‑ this is what they said:
"CTV's writers‑only development program undermines the role of the independent producers and the creative process and it may be a more accurate statement of how CTV views the producer's role when they state writers can fully realize their creative vision before the script is assigned to an independent producer." (As read)
LISTNUM 1 \l 11733 Do you care to comment?
LISTNUM 1 \l 11734 MR. RABINOVITCH: I would have to read it. I have no comment at this moment.
LISTNUM 1 \l 11735 MS COUTURE: I would like to comment. I mean, I am both a writer and a producer so I am sort of in an amusing position of either supporting myself or not supporting the other side of myself.
LISTNUM 1 \l 11736 I think that it's a fear and a concern that I really think is a problem for certain producers who perhaps don't work as much with writers as they would like because there is no problem with the producer getting a script that is already written. In fact, as a producer I would welcome that because you see the intentions of the writer. It's all there. And I think that to get a script from a writer means that you don't have to do all of the development work that a producer needs to do to raise the money to work with the writer.
LISTNUM 1 \l 11737 So I think that it's actually the opposite, I would say, for the independent producers. They should welcome getting specs ‑‑ what we call spec scripts that have been developed by CTV. In fact, CTV has done that with my company and it was a terrific experience.
LISTNUM 1 \l 11738 On the other hand, I think for writers the fact that they have the opportunity to write for themselves before all of the other voices come in to say not this, not that, that's what writers in Canada particularly support.
LISTNUM 1 \l 11739 COMMISSIONER DEL VAL: Great, thank you. So you don't necessarily agree with their conclusion that that's ‑‑
LISTNUM 1 \l 11740 MS COUTURE: I think they are looking at it negatively when they should look at it positively, and I would like to talk to each and everyone of them to explain that to them. So they can call me at home.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11741 COMMISSIONER DEL VAL: Thank you very much.
LISTNUM 1 \l 11742 THE CHAIRPERSON: Rita, do you have any questions?
LISTNUM 1 \l 11743 COMMISSIONER CUGINI: Further to that, Ms Couture, you have had projects that were funded out of the BCE‑CTV benefits?
LISTNUM 1 \l 11744 MS COUTURE: Yes, I have.
LISTNUM 1 \l 11745 COMMISSIONER CUGINI: And yesterday they told us that one of the huge advantages of a self‑administered fund, as they have proposed, is that it is one stop shopping. In other words, the producer doesn't have to go look for additional funding, that they can go to this pool of money and it's all there for them. Was that your experience?
LISTNUM 1 \l 11746 MS COUTURE: I think the big advantage with it already being at CTV is that you are in the door. The biggest thing is to get a broadcaster to be excited by the project, to be in at the birth of the project and then they have a vested interest in following it through to the end.
LISTNUM 1 \l 11747 So I think to have it be in an outside funded group and to then go to CTV, I think that is not the advantage that writers are looking for, and I don't think producers have that advantage if it's from an outside group.
LISTNUM 1 \l 11748 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 11749 Mr. Lennox, just one more question for you.
LISTNUM 1 \l 11750 In your written submission you said that you supported the CRIA submission, especially as it related to new and emerging artists and you did just say that you were here yesterday. I'm just wondering if you could comment on the initiative undertaken by the CHUM Radio Station Group to support and promote new and emerging artists and if that is in keeping with your support of the CRIA submission.
LISTNUM 1 \l 11751 MR. LENNOX: Yes. I think from the moment that submission was written to this moment things have evolved in an extremely positive fashion. I think there has been additional growing empathy between CHUM and the music industry in terms of understanding that our artists' recording costs have exponentially increased, so therefore our reliance and need of true partnership at the early stage of the artist development is much more illuminated than it was even 6 or 12 months ago.
LISTNUM 1 \l 11752 So in those ensuing weeks that has evolved, and even know we don't have a perfect template yet as to how that will be framed in terms of criteria, the great news is that the will is there. The will is there from CTV, CHUM and the music industry to now, you know, build a framework for a new and developing artist program.
LISTNUM 1 \l 11753 So I feel very good about it.
LISTNUM 1 \l 11754 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 11755 Thank you, Mr. Chairman.
LISTNUM 1 \l 11756 THE CHAIRPERSON: Any other questions?
LISTNUM 1 \l 11757 Thank you very much, then.
LISTNUM 1 \l 11758 We will take a five‑minute break while the next panel sets itself up.
‑‑‑ Upon recessing at 0942 / Suspension à 0942
‑‑‑ Upon resuming at 0951 / Reprise à 0951
LISTNUM 1 \l 11759 MR. WEINSTEIN: It's a change of order?
LISTNUM 1 \l 11760 THE CHAIRPERSON: Change of order, I understand.
LISTNUM 1 \l 11761 THE SECRETARY: Then Mr. ‑‑ please introduce yourself before you ‑‑
LISTNUM 1 \l 11762 MR. WEINSTEIN: Okay. Mr. Chairman and Commissioners, my name is Larry Weinstein. I'm a producer, director, and founding partner of Rhombus Media, a small independent Toronto‑based film and television production company that has largely specialized in high‑end performing arts programming since 1979.
LISTNUM 1 \l 11763 Thank you for allowing me to support the CTVglobemedia's application to acquire CHUM Limited, and in turn the performing arts specialty channel Bravo.
LISTNUM 1 \l 11764 Canada has long been at the forefront in the creation of performing arts, documentaries, and performance specials. We, our company, and a number of other producers across Canada have won more awards in this genera then those of any other country. Rhombus itself has earned a reputation for high‑quality programming that has attracted new audiences in the arts in Canada and abroad. It's been our mainstay, it's been our passion, and it's allowed us to enjoy a huge international reputation.
LISTNUM 1 \l 11765 But making these types of programs has become increasingly difficult over the last few years. Now more than ever we need strong Canadian champions or cultural defenders that have the financial strength and creative vision to invest in Canadian culture.
LISTNUM 1 \l 11766 With its strong financial pledges and commitment to Bravo, it is clear that CTVglobemedia is perfectly positioned to be such a champion. Their commitment of $6,000,000 towards performing arts documentaries on top of existing budget levels would be a great boom to Canada's culture. With this pledge, and a number of others outlined in their benefit package, I believe that CTVglobemedia is the perfect group to nurture and support Bravo, Canada's premier arts channel.
LISTNUM 1 \l 11767 Rhombus has produced many shows with Bravo and with Bravo Fact from the channel's very inception. We greatly benefited from their heyday in the mid to late '90s, 2000, 2001 when they were able to invest substantial licence fees into what were to become many of our most acclaimed programs awarded in broadcast throughout the world.
LISTNUM 1 \l 11768 Your approval of this proposed transfer of ownership, will allow Bravo not only to return to those days, the heydays, but likely to thrive more than ever.
LISTNUM 1 \l 11769 CTVglobemedia has shown its expertise and commitment in building Canadian programming of other genres in the past, enhancing Canadian production, and bringing large audiences to the work of filmmakers and TV producers. Their investment in CHUM and Bravo will encourage our company and others to continue to work in Canada, and have the opportunity to create some of the best cultural programming in the world. In ‑‑ which in turn will have great resonance with all Canadian cultural institutions ‑‑ performing arts institutions.
LISTNUM 1 \l 11770 In the past Bravo often came to the rescue of many of the most important projects when other broadcasters faltered. If CTVglobemedia is given the opportunity to fall through on its pledges, it will infuse Bravo with the support it needs to continue to play this pivotal role.
LISTNUM 1 \l 11771 The development and creation of the performing documentary is under threat as never before in television broadcasting history. Funding for performing arts on television in both the international and national scene is diminishing, and in some cases has completely been disappearing.
LISTNUM 1 \l 11772 The recent termination of CBC's flagship program ‑‑ arts program, Opening Night, was a devastating indication of what these shows are up against, and what terribly difficult decisions broadcasters have had to make.
LISTNUM 1 \l 11773 We need national broadcasters to support and promote arts programming so that it can reach a substantial audience, an audience that does have an appetite for these programs. Bravo can fulfill such a role, and with CTV as its new owner we believe that it can also thrive.
LISTNUM 1 \l 11774 This will not benefit only art's program producers but innumerable talents across Canada; musicians, actors, designers, choreographers, dancers, composers, writers, and directors. They'll all be greatly affected.
LISTNUM 1 \l 11775 In this way I believe CTVglobemedia in support of Bravo will be regarded a visionary ‑‑ that they have already committed to preserving and nurturing Bravo, and thus recognizing an important contribution made by this channel and its affiliated independent producers is highly commendable and can't be underestimated.
LISTNUM 1 \l 11776 With diminishing funding over the past few years Rhombus and others have had to look in other directions turning to non‑arts related productions. We sincerely want to reverse that trend.
LISTNUM 1 \l 11777 We are producers with a passion for Canada and for the arts, and a passion for the creation of the cultural Canadian legacy that is seen here and also exported around the world.
LISTNUM 1 \l 11778 If you approve this transaction you will be protecting and nurturing not only the integrity of Bravo, but the entire Canadian performing arts community at large, and the invaluable contribution that they make to defining the Canadian nation ‑‑ sorry, the identity of our nation.
LISTNUM 1 \l 11779 I can't think of a more worthwhile and admirable endeavor. Thanks for your time, and I'd be happy to answer any questions.
LISTNUM 1 \l 11780 THE SECRETARY: We will proceed with Mr. John LaRose of the Aboriginal Peoples Television Network Incorporated.
LISTNUM 1 \l 11781 Mr. LaRose.
LISTNUM 1 \l 11782 MR. LAROSE: Mr. Chair, Commissioners, I am Jean LaRose, an Abenaki citizen of the Odanak First Nation in what is now called Quebec. I am also the Chief Executive Officer of Aboriginal Peoples Television Network Incorporated.
LISTNUM 1 \l 11783 I am pleased to appear today on behalf of APTN in support of CTVglobemedia's application to acquire CHUM Limited. At APTN, we believe that this application will have a direct and immediate impact to increase the level of participation of First Nations, Inuit, and Métis Peoples in television broadcasting. We believe that this application will improve the position of Aboriginal Peoples for a number of reasons.
LISTNUM 1 \l 11784 First, CTVglobemedia has committed to contribute $2.25 million to APTN over seven years to be used to fund dramatic movies and series with Aboriginal independent producers. We should say that this commitment did not just materialize "out of thin air". It came from CTVglobemedia's working collaboratively with APTN to identify the area of Aboriginal production that could most benefit from direct support. It also derives from discussions I had with CTVglobemedia that we could, jointly, develop a dramatic series that would be attractive to both our audiences. I applaud CTVglobemedia's recognition of this possibility.
LISTNUM 1 \l 11785 Drama programming is tremendously important for Aboriginal producers and for APTN. Drama continues to be among the more popular forms of TV programming. I reaches out to the largest audiences. Once that audience is reached, drama helps to build bridges: it increases understanding and empathy.
LISTNUM 1 \l 11786 It is regrettable but until recently good dramas featuring Aboriginal talent was close to non‑existent. I don't think I am saying anything controversial when I say that there is a significant lack of knowledge among the wider Canadian population about Aboriginal Peoples, about the challenges we face in Canadian society, and about the historic ‑‑ meaning very long‑standing, generation after generation ‑‑ nature of these challenges.
LISTNUM 1 \l 11787 I would suggest that there is a connection between how Aboriginal Peoples are portrayed on television ‑‑ whether they are portrayed at all, as a matter of fact ‑‑ and the level of knowledge about Aboriginal Peoples in Canadian society generally.
LISTNUM 1 \l 11788 You can't blame the media alone for the poor level of knowledge that exists, generally speaking, but the media is definitely part of the solution.
LISTNUM 1 \l 11789 Drama programming sits at the top of the programming hierarchy. It is the most challenging and expensive to produce, and it builds the most sought‑after skills among those involved in the production.
LISTNUM 1 \l 11790 One of quite a few Aboriginal producers that intervened in this proceeding in support of CTVglobemedia, Big Soul Productions, described the situation very well.
LISTNUM 1 \l 11791 Big Soul stated that Aboriginal producers need to take responsibility for keeping Aboriginal peoples in the industry.
LISTNUM 1 \l 11792 Allocating more funding, therefore, to support higher drama, budget drama productions by Aboriginal independent producers, which draw Aboriginal writers, directors, actors and behind the camera personnel will build expertise that will help Aboriginal talent in the industry in the years to come.
LISTNUM 1 \l 11793 Finally, APTN has identified high quality drama programming as a priority for our network, but it is something that we do not have the sufficient resources to produce in quantity on our own.
LISTNUM 1 \l 11794 We have to partner with others to get this kind of programming off the ground.
LISTNUM 1 \l 11795 We are tremendously encouraged by CTVglobemedia's positive response and clear commitment to help APTN to produce more of this important genre programming.
LISTNUM 1 \l 11796 The second way in which CTVglobemedia's benefits proposal will improve the position of Aboriginal peoples in broadcasting, is that CTVglobemedia has chosen to allocate its funding to drama production through APTN.
LISTNUM 1 \l 11797 In other words, while the funding will ultimately be used to support Aboriginal independent production, APTN will also benefit in that we will obtain broadcast rights to those productions.
LISTNUM 1 \l 11798 We believe that this approach reflects an understanding on CTVglobemedia's part that APTN has to play a leading role in representing Aboriginal peoples in television, and in ensuring that Aboriginal peoples have the opportunity to tell their own stories from their own advantage point.
LISTNUM 1 \l 11799 We believe that CTVglobemedia's allocation of funds directly to APTN shows that it views APTN as a partner to be supported in the broadcasting system. A partner that is working towards mutually compatible goals.
LISTNUM 1 \l 11800 And it also validates the CRTC's vision of providing a place for Aboriginal peoples in the broadcasting sector when it licensed APTN in 1999.
LISTNUM 1 \l 11801 Today key place in the industry now recognize, support and actively contribute to further enhance and solidify the vision that Aboriginal peoples had, and that the CRTC shared.
LISTNUM 1 \l 11802 It is important, we believe, that Aboriginal peoples control the telling of their own stories.
LISTNUM 1 \l 11803 CTVglobemedia's other important benefits proposal for Aboriginal peoples in this transaction includes the allocation of 3 million over seven years to social benefits in support of traditionally under‑represented groups.
LISTNUM 1 \l 11804 Aboriginal peoples will not be the exclusive recipients of these dollars, but we expect that a significant portion would be spent on Aboriginal initiatives.
LISTNUM 1 \l 11805 We noted in our written intervention that the Aboriginal media education fund would be well positioned to assist CTVglobemedia to direct funding to youth skills training, where it is needed most. And we expect that IMF will follow up with CTVglobemedia to show how it can be of assistance.
LISTNUM 1 \l 11806 Above and beyond the specific benefits CTVglobemedia has proposed, we think it is important to underline our support for this application has much more to do with our experiences with CTV since APTN first launched.
LISTNUM 1 \l 11807 We accept the argument that it is important for Canada to have large and healthy media companies that can face head on the challenges that the future can bring, and there are many.
LISTNUM 1 \l 11808 But, from our perspective, as a small stand‑alone service, it is just as important that these large companies support the smaller services that also have a direct role in fulfilling important broadcasting policy initiatives.
LISTNUM 1 \l 11809 Otherwise, smaller services risk being left behind and policy objectives will not be met.
LISTNUM 1 \l 11810 Consistently over the years CTV has shown that it shares our understanding of APTN's role in the system, and CTV's role in supporting APTN.
LISTNUM 1 \l 11811 For example, the financial support offered to APTN as part of the Bell Globemedia benefits package allowed APTN to build seven news bureaus across Canada.
LISTNUM 1 \l 11812 This led directly to the success that APTN National News has achieved in bringing news stories of direct relevance to Aboriginal peoples from across the country to the airwaves everyday.
LISTNUM 1 \l 11813 Without CTV's support, it is doubtful that APTN National News would be as vital a source of information as it is today.
LISTNUM 1 \l 11814 We are just as pleased to report that CTV's commitment to APTN did not stop with the benefits funds.
LISTNUM 1 \l 11815 We found that CTV was prepared to work with APTN to draw on APTN's resources in the field to enhance CTV's own news capabilities.
LISTNUM 1 \l 11816 This has led to increased opportunities for our news personnel.
LISTNUM 1 \l 11817 CTV's commitment to APTN in this area, we need to emphasize, is continuing beyond the lifetime of those previous benefits commitments.
LISTNUM 1 \l 11818 We have just signed a five‑year agreement between APTN and CTV News, which sets out the framework for continued cooperation in news and current affairs.
LISTNUM 1 \l 11819 Among other things, the agreement commits us to share news materials with each other, and provides APTN with access to CTV's substantial archives.
LISTNUM 1 \l 11820 Obviously having CTV's resources available to us makes a huge differences for our news capabilities.
LISTNUM 1 \l 11821 It is a two‑way street, though, and CTV News will also benefit from this arrangement, as it has in the past.
LISTNUM 1 \l 11822 In conclusion, we believe that CTVglobemedia has proposed tangible benefits that will provide direct support to Aboriginal peoples in broadcasting, and that this application will allow CTVglobemedia to build on its past support for Aboriginal initiatives. For these reasons, we support this application.
LISTNUM 1 \l 11823 Finally, the Aboriginal production community has supported this initiative to a level unheard of before.
LISTNUM 1 \l 11824 We have provided 75 letters of support to the CRTC in favour of this proposal, and you have received these.
LISTNUM 1 \l 11825 Interestingly enough, as an aside, that's as many letters of support as they provided for our own license renewal, which has left me somewhat ‑‑
‑‑‑ Laughter / Rires
‑‑ curious as to where they actually stand, but that's another issue altogether.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11826 I suggest to you that the entire community has recognized the importance of the proposed benefits package, both for APTN, as well as for their own stories in finding new and innovative outlets for their stories.
LISTNUM 1 \l 11827 I thank the Commission for this opportunity, and I will answer any questions that you wish to ask of me. Thank you.
LISTNUM 1 \l 11828 THE SECRETARY: Thank you.
LISTNUM 1 \l 11829 We'll proceed with the next presentation, Mr. Brent Butt and Virginia Thompson of Corner Gas.
LISTNUM 1 \l 11830 MR. BUTT: Good morning, Mr. Chairman and the Commissioners.
LISTNUM 1 \l 11831 My name is Brent Butt, and I am the creator, head writer, principal actor and an executive producer of the Canadian TV series Corner Gas.
LISTNUM 1 \l 11832 I'd like to thank you for this opportunity to speak at this hearing, because I want to express my full and enthusiastic support for CHUM Limited's transfer of ownership to CTVglobemedia.
LISTNUM 1 \l 11833 Also joining me is my co‑producer, Virginia Thompson.
LISTNUM 1 \l 11834 I've been a stand‑up comedian for almost 20 years now. And the first 15 of those years could be fairly described as eking a meager existence, while doggedly pursuing a crazy dream.
LISTNUM 1 \l 11835 Actually more accurately described as barely eking a meager existence ‑‑
‑‑‑ Laughter / Rires
‑‑‑ and often failing to eke out what could reasonably called an existence.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11836 But that's the life of an artist and a performer. You do it because you have to, and you hope that somewhere down the line you find the way to pay the bills.
LISTNUM 1 \l 11837 But I always knew that I wanted to step things up at some point to work in television. I love television. I seriously considered humanities greatest achievement.
LISTNUM 1 \l 11838 I know that sounds like I'm trying to be funny, but I'm not.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11839 I won't bore you with my arguments as to why I consider television to be greater than penicillin or man flight, but I do.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11840 Working in television comedy was always my goal.
LISTNUM 1 \l 11841 I often spoke to others about various ideas that I had for sitcoms, but the discussions would always end with the person I was talking to telling me that a sitcom in Canada was impossible.
LISTNUM 1 \l 11842 They would say, "Yeah, it's a funny idea. Could be entertaining, but we can't make sitcoms in Canada."
LISTNUM 1 \l 11843 And I always wondered why. And when I asked why, there was usually some vague talk about being in a small market and having to compete with Americans who just do it better. And that never sat well with me. I always thought do it better? Have you ever seen an episode of She's the Sheriff?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11844 They don't automatically ‑‑ they don't automatically do it better. We should be doing our own shows.
LISTNUM 1 \l 11845 Over the years I had a few opportunities to work in television, but those opportunities were always short‑lived. I can't definitively say why those opportunities didn't pan out, but I have some theories.
LISTNUM 1 \l 11846 From the start, I was paired up with a producer I didn't know, with a writer or two that I didn't know and that didn't know me. And even once I was paired up with a director who told me he had never seen an episode of the Tonight Show. He had, however, shot several figure skating specials and so was therefore apparently the right guy to shot the comedy I was working on.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11847 I don't mean to sound ungrateful for those opportunities, I just mean to illustrate the frustrations that come from having accountants talking to me about jokes in the script.
LISTNUM 1 \l 11848 I once had an accountant say these words to me, seriously I'm quoting these words in regard to a show I was working on: "A chicken suit would be funnier."
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11849 I said, "Do you mean it would be less expensive?" He said, "No, I really think that it would be funnier. But, yes, it would be less expensive ‑‑
‑‑‑ Laughter / Rires
‑‑ there's a chicken suit in the wardrobe warehouse."
LISTNUM 1 \l 11850 At any rate, those shows either never saw the light of day or never lasted, and I always found myself back touring the nightclubs.
LISTNUM 1 \l 11851 But Corner Gas was a very different scenario. The executives at CTV suggested that I start interviewing production partners.
LISTNUM 1 \l 11852 They didn't assign me a producer, they wanted me to find a producer that I felt comfortable with, who I felt understood the project and my sense of humour. And then they asked me who do you think should write the show with you. What a wonderful and refreshing question.
LISTNUM 1 \l 11853 In short, what I'm trying to say here is that at all times throughout the creation of Corner Gas, and through its multiple seasons, I've been allowed to focus my energies in the directions where I can actually have some impact.
LISTNUM 1 \l 11854 So I don't know how much more expensive a duck suit is than a chicken suit. I even have a hard time verbalizing why it might be funnier in a given situation.
LISTNUM 1 \l 11855 I just know that it's one of those intangibles that you have to feel, and it's why creative people should be allowed to create.
LISTNUM 1 \l 11856 But the scripting and the jokes and the acting are only the most visible of the many reasons why Corner Gas is watched by more Canadians than any other sitcom, which it is. It's the most watched comedy, Canadian or American.
LISTNUM 1 \l 11857 When was the last time that the top‑rated sitcom in Canada was Canadian? I was trying to think, I don't think it's ever happened.
LISTNUM 1 \l 11858 And a huge part of that success is due to the support that we received from the BCE CTV benefits. It made a huge difference getting the vast majority of our production financing from one place, and the one‑stop shopping financing model.
LISTNUM 1 \l 11859 As you know, this kind of funding model and support is highly unusual in Canada.
LISTNUM 1 \l 11860 I strongly endorse the approach the CTVglobemedia is taking with the CTV CHUM benefits, because it will breed success.
LISTNUM 1 \l 11861 And when I say success, I'm not talking about whether or not the shows will turn a profit. I just don't know a lot about those things.
LISTNUM 1 \l 11862 Me talking about the bottom line would just be the reverse of the duck suit thing.
LISTNUM 1 \l 11863 When I say success, I'm talking about Canadians from coast to coast, lots of them, sitting down at a specific time of the week to watch a specific show, a specific Canadian show.
LISTNUM 1 \l 11864 The CTV CHUM benefits is set up to give creative people a chance.
LISTNUM 1 \l 11865 I know a ton of very talented writers and actors and comedians and directors and young producers who can't break into the business because they just don't know how to raise the necessary funding from the various agencies that support the arts. It's just not an easy process.
LISTNUM 1 \l 11866 So these creative people end up missing the boat because they don't know how to do the paperwork, or simply scrapping their ideas because they can't alter their vision to suit the varying demands of the separate funding agencies.
LISTNUM 1 \l 11867 The CTV CHUM benefits will allow those people an opportunity to better realize their vision, because they can spend time and energy writing, and casting, and story boarding, and rewriting, and designing sets, and doing all those other intangible things that don't show up on a balance sheet.
LISTNUM 1 \l 11868 I'd like to sum up by correcting a misconception about Corner Gas.
LISTNUM 1 \l 11869 There are some who think that, for whatever reason, I approached other broadcasters with the idea for Corner Gas, and that they turned it down, thereby missing out on this huge success story.
LISTNUM 1 \l 11870 It makes for a good urban legend, I guess, but it's just not the case.
LISTNUM 1 \l 11871 I want to make it clear that CBC or Global or anyone else did not turn down Corner Gas. I never approached them with the idea of Corner Gas.
LISTNUM 1 \l 11872 And, in fact, I never actually approached CTV either.
LISTNUM 1 \l 11873 The truth is CTV came to me. They sought me out as a creative person and they said, "Hey, do you have any ideas for a TV show?" And that's when I started talking about this small gas station show that I had.
LISTNUM 1 \l 11874 My point is the executives of CTV and the Comedy Network were actively seeking out talent, and they still are.
LISTNUM 1 \l 11875 I don't know if any of you have ever heard the name Shawn Proudlove. Not many people have. But for my money he's one of the most original and unique minds in the country, and he's never had a national forum for his talents.
LISTNUM 1 \l 11876 So you can imagine how it warmed my hearts and bolstered my belief in Canadian show business to find out that the Comedy Network is giving Shawn Proudlove his own special.
LISTNUM 1 \l 11877 I can almost guarantee no one else in the country was going to give such a unique artist a shot.
LISTNUM 1 \l 11878 Corner Gas is about to start shooting its fifth successful season, with an average audience now of over one and a half million viewers.
LISTNUM 1 \l 11879 It has been sold to more than 26 countries, including a sale to U.S. channel, which has over 70 million subscribers. There's a companion book and merchandising and DVDs.
LISTNUM 1 \l 11880 So, from my perspective, the BCE CTV benefits has accomplished exactly what they said they would, and then some. And I have no doubt the CTV CHUM benefits will lead to the same type of success.
LISTNUM 1 \l 11881 As an artist, I was able to benefit from this system, and I don't want to see it taken away from the next generation.
LISTNUM 1 \l 11882 I don't have anyone telling me that a Canadian sitcom is impossible any more. What happens now is people say to me, "Hey, I've got a great idea for a sitcom."
LISTNUM 1 \l 11883 This is a good time. It's finally a good time for artists in this business. It's what me and my friends used to dream about.
LISTNUM 1 \l 11884 I had to create a production company to do business, and I've always been kind of crazily symbolic about things for whatever reason. I wanted to give a name to my production company that meant something, and since working with CTV I called my production company Sparrow Media, because I no longer feel the need to fly south.
LISTNUM 1 \l 11885 Thank you for your time. Virginia and I are happy to answer any questions.
LISTNUM 1 \l 11886 THE SECRETARY: Thank you.
LISTNUM 1 \l 11887 We'll proceed with the next presentation. Mr. Steven Stohn and Linda Schuyler of Epitome Pictures.
LISTNUM 1 \l 11888 MS SCHUYLER: Mr. Chairman and Commissioners, thank you for the opportunity to present to you today.
LISTNUM 1 \l 11889 My name, as you heard, is Linda Schuyler, and I own a company with Steven Stohn.
LISTNUM 1 \l 11890 I am the creator, and together we are the executive producers, of two awarding‑winning Canadian dramatic series, Degrassi: The Next Generation, and Instant Star, both of which air on CTV in Canada, and are also seen in over 150 and 120 countries respectively around the world.
LISTNUM 1 \l 11891 We are immensely proud of the fact that young audiences internationally are watching these 10 out of 10 Canadian series.
LISTNUM 1 \l 11892 We're here today to talk in full support of CTVglobemedia's acquisition of CHUM Limited.
LISTNUM 1 \l 11893 Joining Steven and me today, we are pleased to have two cast members from our series, Stacie Mistysyn and Melissa McIntyre.
LISTNUM 1 \l 11894 Stacie Mistysyn has been an actor with us since the earliest days of the kids of Degrassi Street, which is over 25 years ago. Sorry to do that to you, Stacie.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11895 And she is still working with us today.
LISTNUM 1 \l 11896 And Melissa is one of our stars on Degrassi: The Next Generation, and has been for seven years.
LISTNUM 1 \l 11897 Our relationship with CTV has given us the platform to build bigger audiences for high quality Canadian programming. And we have no doubt that the proposed acquisition of CHUM will only add to this visionary's company's ability to provide even more opportunity to Canadian independent producers.
LISTNUM 1 \l 11898 CTV's commitment to Canadian programming of the highest quality, particularly drama, is demonstrated through their incredible support for Degrassi and other shows made possible through the BCE CTV benefits program.
LISTNUM 1 \l 11899 The CTV CHUM benefits that are proposed in this application are based on a similar model, and we can speak to the reason that this model is poised for success.
LISTNUM 1 \l 11900 MR. STOHN: Our entertainment industry is fraught with many challenges, perhaps foremost among them being how to finance projects.
LISTNUM 1 \l 11901 I firmly believe that CTV's staunch support of Canadian programming, as well as the BCE CTV benefits have been at least part of the solution to this problem.
LISTNUM 1 \l 11902 The BCE CTV benefits package, and the series extension benefit in particular, was of enormous help in achieving Degrassi's success.
LISTNUM 1 \l 11903 The additional financing provided under this benefit was sufficient to extend the typical series order of 13 to a larger number of episodes, like 22 or 19, or in the case of this season, 24.
LISTNUM 1 \l 11904 And this made our series far more attractive to international buyers. And that has been critical in telling our identifiably Canadian stories to the world.
LISTNUM 1 \l 11905 As an example, last year during our sixth season of Degrassi, we surpassed the 110 episode mark. And that's a key number, as it permits broadcast each week day for 22 weeks without repeats.
LISTNUM 1 \l 11906 And that, in turn, opened the door to a successful syndication sale in the United States. Expanding us from the digital channel that we now appear on, to daily over the air broadcasts in all of the major cities of the United States, and indeed over 90 percent of all U.S. communities.
LISTNUM 1 \l 11907 And that's in addition to broadcasts on super stations such as WGN in Chicago, WPIX in New York and KTLA in Los Angeles.
LISTNUM 1 \l 11908 So we strongly believe that the inclusion of a similar funding envelope in the CTV CHUM benefits package is extremely positive.
LISTNUM 1 \l 11909 I'd also like to speak to the extraordinary support CTV has given us in the development of multi‑platform adjuncts to our series.
LISTNUM 1 \l 11910 CTV has been a financial creative and marketing supporter of the highly successful websites for both Degrassi and Instant Star, and an array of new media initiatives, such as webisodes, mobisodes, animated webisodes, graphic novels and soundtrack albums, and these, in turn, have propelled forward even further initiatives.
LISTNUM 1 \l 11911 For example, just yesterday afternoon many of our cast members were in a Broadway theater in New York for an event hosted by Rosie O'Donnell and to be broadcast on the Internet via AOL.
LISTNUM 1 \l 11912 It was featuring stars from the cast of Degrassi, five of them, and five members from the cast of the hit Broadway musical Spring Awakening.
LISTNUM 1 \l 11913 They were together discussing teen issues and challenges in a town hall forum in front of a live teen audience, in addition to the huge audience expected via the Internet.
LISTNUM 1 \l 11914 And, may I say, hearing the reports of that event, it wasn't just a teen audience, it was a screaming pandemonium of a teen audience.
LISTNUM 1 \l 11915 And this is not unexpected. Susanne Boyce has been with us on some of our mall tours in the United States, which we've had to actually stop doing because thousands of fans come out to see, you know, two of our Degrassi stars at a mall in Woodbridge, New Jersey, and the police have had to be called in because ‑‑ no matter how much security we have it tends to get out of control.
LISTNUM 1 \l 11916 My fond dream is that one day the President of the United States will be one of those fans who was lined up in the mall in Woodbridge, New Jersey or in the Eugene O'Neil Theatre in Broadway and seeing our identifiably Canadian stories in action.
LISTNUM 1 \l 11917 MS SCHUYLER: CTV support and promotion ‑‑ financial, creative, and promotional for both Degrassi and Instant Star have been tremendous. CTV could not have been more encouraging and supportive of our desire to develop new writers, actors, and directors, which you've heard a lot about today is so important.
LISTNUM 1 \l 11918 Because we know that our future industry rests on what we do now to develop and encourage diverse young talent. And unusually for Canada, both our series have had the benefit of creative and far‑reaching publicity and promotional campaigns.
LISTNUM 1 \l 11919 All of this together with these series being given prominence on CTV schedule has resulted in Degrassi and Instant Star, being the top two English language Canadian drama series on air today.
LISTNUM 1 \l 11920 We support this application because we know from experience and from CTV's demonstrated success that the benefit models proposed will breed further success. CTVglobemedia's track record of working in tandem with independent producers to develop and promote identifiably Canadian dramatic television series is unmatched.
LISTNUM 1 \l 11921 In this borderless media age where new technology has increased the competition for media companies worldwide, we should applaud a Canadian broadcaster who wants to meet the challenge of creating compelling stories that reflect Canadians to themselves. Success deserves to be regarded and encouraged. And we encourage you to approve this application. Thank you.
LISTNUM 1 \l 11922 THE SECRETARY: We will continue with Mr. Heyges, Bright Light Pictures Inc.
LISTNUM 1 \l 11923 Sorry, for the pronunciation.
LISTNUM 1 \l 11924 MR. HEYGES: It's okay. It's Heyges. Thank you. It happens a lot.
LISTNUM 1 \l 11925 Good morning, Mr. Chairman, Commissioners. Thank you for the opportunity to appear at this very important hearing in support of the CHUM Limited transfer of ownership to CTVglobemedia.
LISTNUM 1 \l 11926 My name is Steven Heyges. And I'm a producer and principal of Bright Light pictures, a Vancouver based production company that develops finances and produces independent feature films and television projects for the domestic and international marketplace.
LISTNUM 1 \l 11927 To date we've produced over 30 feature films as well as multiple television series. We are thrilled that CTVglobemedia has made a firm commitment to preserve Citytv's unique contribution to the broadcasting system, including their support of Canada feature films.
LISTNUM 1 \l 11928 In an increasingly competitive global environment TV licencing is an integral part of the financing structure for Canadian feature films. Without it Canadian film creators would never be able to compete financing requirements and go on to exhibit our films both in Canada and all over the world.
LISTNUM 1 \l 11929 The ability to showcase Canadian programming domestically and on the international stage can only continue if we have strong industry partners with a broad reach. And without Canadian broadcast partners 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 platforms through which these films reach Canadian audiences.
LISTNUM 1 \l 11930 I believe that CTVglobemedia with their demonstrated history of investing in Canadian programming and building success is the right choice to take on CHUM assets, and become a much stronger voice for Canadian content and Canadian feature film.
LISTNUM 1 \l 11931 The winning combination of CHUM's experience in feature film and CTV's expertise in promotion and building audiences will be an immense benefit to our industry. Right now we are telling Canadian stories, and have seen a huge talent pool in Canada, but increasingly we see this talent go south.
LISTNUM 1 \l 11932 If there are more production opportunities in Canada for and by Canadians, we can create opportunities for the best and brightest in Canada. Our success has enabled us to nurture many emerging writers and directors and producers. CTVglobemedia's commitment to maintaining CHUM's focus on supporting feature films is of critical importance to independent filmmakers.
LISTNUM 1 \l 11933 CTV has shown itself to be passionate about building Canadian programming and audiences, and succeeded into doing so. This is no small feat. I believe that under CTVglobemedia's ownership the unique CHUM services will thrive, and their ideas and innovation will be better financed.
LISTNUM 1 \l 11934 This will mean that we do not lose the important contributions that Citytv and the other CHUM services have been making to the broadcasting system, and that Canada feature films will continue to have a free TV platform in Canada, and the opportunity to travel around the world.
LISTNUM 1 \l 11935 The marriage of these great companies while preserving City's distinctive voice will contribute greatly to the vitality of our broadcasting system thereby enhancing Canadian content.
LISTNUM 1 \l 11936 THE CHAIRPERSON: Thank you very much. It's fascinating to hear you all. Obviously you're very satisfied with your relationship with CTV. You've had a long relationship and it has been mostly beneficial.
LISTNUM 1 \l 11937 For us the key question, of course, is what I posed to the previous panel, why CTV? Would not another owner of CHUM do the same thing? That company would have Canadian obligations. It would offer benefits. It would make commitments for film, for independent production, et cetera. And, of course, you are extremely talented and successful producers some of you. Working with you would be to ‑‑ other owners benefit, of course, because you put a product that people want to see ‑‑ that sells, et cetera.
LISTNUM 1 \l 11938 So explain to me what is special about CTV? What is its difference? Why another owner could not do exactly the same thing that CTV has promised or committed to do?
LISTNUM 1 \l 11939 MR. HEYGES: If I could jump in. From the feature film standpoint ‑‑ I wanted to address this ‑‑ because feature film is in crisis in this country right now. And I think that what ‑‑ CHUM has been a supporter of feature film, and our company wouldn't be where it is today had it not been for the support of CHUM and feature film.
LISTNUM 1 \l 11940 What I see in CTV, as Brent mentioned earlier, is a creative company that has the ability to promote and market Canadian content. That is a component that is missing from the feature film community right now. To have the creative knowledge and marketing and promotion is an essential component to the success of any feature film. I think those ‑‑ that is something that is a unique ‑‑ a unique ‑‑ something that is ‑‑ really I can only see CTV as the company that can do that properly.
LISTNUM 1 \l 11941 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11942 MR. BUTT: I ‑‑ oh, sorry. I just wanted to ‑‑
LISTNUM 1 \l 11943 THE CHAIRPERSON: Whoever wants to speak.
LISTNUM 1 \l 11944 MR. BUTT: When you first posed this question the word that really stuck out in my mind was relationship. You said we seem to enjoy a good relationship with CTV.
LISTNUM 1 \l 11945 For me personally that's ‑‑ that is what it comes down to. Because I've worked with other broadcasters. I've worked with CBC, I've worked with Global, I worked with some other independent producers. But it really comes down to the relationship of the individuals.
LISTNUM 1 \l 11946 When you talk about Rogers or anybody else, you know, adding to these benefits or having to make commitments ‑‑ with CTV it's not legal obligations with them. It goes more than that. They can satisfy the legal obligations that they have in a lot easier ways than what my experiences has been with them.
LISTNUM 1 \l 11947 One of the things that comes to mind is one of the executives that was put in charge of Corner Gas in the beginning ‑‑ being on the phone with me until 1:30 in the morning listening to my ideas about how I could alter the resolution of the third act of the script I was working on.
LISTNUM 1 \l 11948 She didn't have to do that. She could have easily said, well, you know, e‑mail it to me tomorrow ‑‑ or I'll give you my ideas ‑‑ I said I'm going to be working on this late. She said, well give me a call whenever you want. I said it's not going to be until 1:00 or 1:30 in the morning. And she said that's all right. We'll talk about it then. Because she knew I wanted to get this to the story department the next day.
LISTNUM 1 \l 11949 So it's those kind of commitments that go beyond the ‑‑ just the obligations that they have to satisfy the Commission. It really is them wanting to make sure that the creative people have the most opportunity to put their product out there. That's been my experience.
LISTNUM 1 \l 11950 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11951 MS THOMPSON: And following up with Brent. I think what makes CTV and this exciting, you know, merger to companies ‑‑ exciting for me is that you say we're very interesting and talented bunch, and ‑‑ but I think you have to understand that CTV has nurtured our talent. On Corner Gas I was a creative producer. Not an executive producer championing other creative talents before Corner Gas.
LISTNUM 1 \l 11952 CTV took a chance on me and on our company to be able to develop us and grow us as they developed Brent and his vision. It's an extraordinary situation when you have a broadcaster ‑‑ and I believe this broadcaster is extraordinary because of their knowledge.
LISTNUM 1 \l 11953 CTV understands producers because I think their staff members ‑‑ some of them are former producers. They're also exceptional broadcasters. They're also exceptional marketers. They also have an amazing, you know, capacity to understand new media. They nurture us. We nurture them. It is extraordinary.
LISTNUM 1 \l 11954 And I've been a producer in Canada for, you know, now ten years. The most extraordinary experience that I had before working on Corner Gas with Brent Butt and CTV was when our first series, Incredible Stories Studio ‑‑ it was a huge hit in Canada, but it didn't actually really hit until it went overseas. And I had the opportunity to work with Disney.
LISTNUM 1 \l 11955 And Disney just worked differently than Canadian broadcasters. They worked as a team. They nurtured this project and they made it relevant to the European community. And they knew how to market, and they knew how to promote, and they knew how to nurture.
LISTNUM 1 \l 11956 And I had never been nurtured, marketed, and promoted in that way. I got that nurturing from Disney International. And I came back to Canada and I thought I wonder if that could ever happen again. And it's happened with Corner Gas.
LISTNUM 1 \l 11957 So I do believe that this is an exceptional company with exceptional people that have a broad base of knowledge in so many different aspects of broadcasting, marketing, promotion, et cetera that they bring out the best in us. And I do very much hope that they can bring that with the next generation of producers with this acquisition.
LISTNUM 1 \l 11958 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11959 MS SCHUYLER: I would just like to follow up on that. It was ‑‑ I don't know about Jully's teeth analogy, but I do know that in sports that the only way that we have winning teams is when we have great depth in the bench.
LISTNUM 1 \l 11960 It was 20 years ago that Ivan and I first met. And at that point Degrassi was running on CBC, and it was running on a Sunday afternoon time slot around 5 o'clock.
LISTNUM 1 \l 11961 And Ivan called me ‑‑ had just come back to work at CBC, and he called me into his office. And he said, Linda, I've been aware of this show of yours, and I think we should actually move it to an 8:30 time slot. And I looked at him and I said, oh very nice to meet you Ivan, but I really don't think that's a very good idea.
LISTNUM 1 \l 11962 And he said well why? And I said well because I don't feel ‑‑ I don't know if my show is ready for it or whatever. And he said I am your broadcaster. I am telling you, you are ready for 8:30. He said you do your job. You go and ‑‑ you produce the shows. I will do my job and I will broadcast them.
LISTNUM 1 \l 11963 And in those days Ivan and I worked quite closely. He used to come down to our office, which was in an old basement. And he would watch the first cut of every season. And we would, you know, make sure that together we were happy with the story telling that we were doing.
LISTNUM 1 \l 11964 Now we're back with Degrassi the Next Generation. And I think that word "next generation" speaks volumes. Not just to what we're doing in front of the camera, but to what's going on behind the camera.
LISTNUM 1 \l 11965 Ivan does not come down to my basement office anymore. In fact, I'm not even in a basement office anymore. He has around him ‑‑ when you look at Susanne Boyce and his whole Canadian team, he's not able to work with me on a daily that he used to. But he has a team around him who share the vision and the passion.
LISTNUM 1 \l 11966 I also don't work as closely on the floor on my show as I used to. I've had to build around me an ‑‑ an infrastructure. In fact, one of my co‑producers now on Degrassi: The Next Generation is Stefan Brogren who if you knew the original Degrassi he used to play Snake and was one of zit remedy. He has now grown to be a producer with me.
LISTNUM 1 \l 11967 So we are together through what CTV is doing, and what we're now able to do in our country is nurture this next level of talent. Our industry is still a baby industry. And we're competing as we well know with the forces south of us.
LISTNUM 1 \l 11968 And it is only ‑‑ we are only going to mature as an industry if we can continue to build on those relationships and nurture our talent. So it's ‑‑ you're dealing with a lot of things that are not easy to measure. Because we're dealing with talent. We're dealing with creative people and ‑‑ but I think you've heard a lot today about relationships and nurturing, and I can't speak highly enough of the importance of that.
LISTNUM 1 \l 11969 MR. STOHN: If I could just add two small points to what Linda said. And certainly what Steve, Brent, Virginia, and Linda have said, and indeed the previous panel on this issue resonate completely with me. I'm just trying to make two different points perhaps.
LISTNUM 1 \l 11970 We are facing a very uncertain future in the television world. I also have a music background, and I know the music industry in the face of the Internet has really ‑‑ is going in to free fall and it's going into massive transformation now. It's highly likely that over the next few years the television industry may be facing similar kinds of pressure.
LISTNUM 1 \l 11971 So we're going to need teams that are, you know, innovated, looking to the future, and willing to adapt. That also means that we need ‑‑ there is something good about being big and being able to survive what's going forward. CTV has shown in our relationship with them an extraordinary capacity to innovate in the new media and work with us. We're small.
LISTNUM 1 \l 11972 I think ironically in this world it's good to be very big. And it's good to be very small. We can be nibble and run around and come up with ideas. CTV ‑‑ I think big ‑‑ they're going to be very, very good and actually crucial over the next while to really have the ability to withstand some of the hurricanes that are going to be thrust in our path.
LISTNUM 1 \l 11973 The second is diversity. And you know what ‑‑ what I see looking out over the dial, what Linda and I see as producers looking to different networks are ‑‑ as networks get into trouble they tend to move more towards the middle, this may be true in radio as well as in television, and start to appeal more and more to the mass audience.
LISTNUM 1 \l 11974 Where you've got one owner of two different channels, you actually are going to get more diversity in the system. If a Rogers were to take over a CHUM, you know, surely their economic self‑interest ‑‑ regardless of what expectations or commitments they made, their economic self‑interest is going to be ‑‑ to make it look more like the most successful network in the country, CTV.
LISTNUM 1 \l 11975 So there's going to be pressures on them to do that. Whereas, in CTV's economic self‑interest is to make them as different as possible, and indeed they've made that commitment already. Because they've already got CTV. Now they want something that, you know, is an adjunct to it. It's complimentary not in competition with it. So thank you very much.
LISTNUM 1 \l 11976 MR. BUTT: I'd like to just add one thing if I could too. It's a little anecdotal maybe, but I think it applies to what we're talking about here. Recently we received word that ABC was interested, based on the success of Corner Gas, of buying the rights to remake it and make it an American show. Basically take Corner Gas and make it American.
LISTNUM 1 \l 11977 I know for a lot of reasons it ‑‑ probably from the business standpoint ‑‑ was very exciting. And I think it probably made a lot of sense for CTV financially to have that happen.
LISTNUM 1 \l 11978 Virginia and myself and David Story ‑‑ the other executive producers, we just talked about it and it just wasn't sitting well with us. It was kind of taking the work that the writers and the actors and we as the producers had done and kind of erasing that and getting rid of it. And suddenly here's a gas station in Nebraska or Idaho, and there is some other guy with a big round head and glasses doing it.
LISTNUM 1 \l 11979 ‑‑‑ Laughter / Rires
LISTNUM 1 \l 11980 It just didn't sit well. So I didn't know how to say that to CTV really, but I said it. I said it doesn't sit well with us. And they said well you don't have to do it. If you don't want to do it we'll talk to ABC, and it will be fine. Don't worry about it.
LISTNUM 1 \l 11981 They as a champion that was big enough, you know, were able to step between us and a large broadcaster who wanted to essentially take what we did. They were able to step between them and us and say look, if they don't want to sell they don't have to sell.
LISTNUM 1 \l 11982 THE CHAIRPERSON: Mr. Larose, you represent a community that's clearly growing all the demographics ‑‑ I would suggest becoming more and more important, et cetera. You mentioned your good relationship that you have with CTV. And when I visited you about two months ago you could explain it to me in more greater detail as part of my general education.
LISTNUM 1 \l 11983 You must be courted by other networks, too. I mean other networks must be seeing you. Can you explain why you have such a good relationship with CTV? Why you wouldn't be on equal footing with other networks?
LISTNUM 1 \l 11984 MR. LAROSE: Well, we do work with other networks. Part of what APTN tries to do is open opportunities for Aboriginal peoples across the broadcasting sector.
LISTNUM 1 \l 11985 Where CTV has made a huge difference for us in many cases is in some of the ‑‑ as I mentioned in my presentation it has gone beyond the strict wording of what the special benefit was. When we look at the arrangement under the Bell Globe Media transaction, CTV was committed to providing so many dollars for so many years to open the bureaus. And that was the ‑‑ that was strictly the wording of the arrangement.
LISTNUM 1 \l 11986 However, in building the relationship with them it has become much more than that. We are now two years past the special benefits. We have worked to establish an entirely new relationship, built on the fact that they have a range of outlets across the country that allow us to tell our stories to Canadians from our perspectives from our point of view. That is really the only outlet we have right now outside of APTN when it comes to news in that formal arrangement.
LISTNUM 1 \l 11987 When we started discussing this proposal initially, the idea that I had ‑‑ and I mean it's interesting that I am sitting at same table as Mr. Butt ‑‑ I keep using Corner Gas as an example of the type of production that APTN would dearly love to do with somebody like CTV where we have Warren Cardinal, to whom I spoke by the way about this proposal and he was all enthusiastic about the opportunities it may provide to some of our actors and other players in the industry.
LISTNUM 1 \l 11988 This is the type of thing that we feel right now and we know by experience that the commitment that they have made will be lived up to. They have lived up to every commitment and then gone beyond.
LISTNUM 1 \l 11989 Last fall when we did the Aboriginal People's Choice Music Awards we approached ‑‑ I approached Bell ExpressVu which is part of the overall family, if you wish, and I asked them ‑‑ I said, you know, you don't have any obligation to APTN but we are doing this live show and I would love to do it in HD and I would love to get it out across the view channel. ExpressVu provided it at no charge to APTN or to the producer, the Aboriginal Production community, at all, their HD truck; all of their equipment, all of their personal. Basically, they provided us a one‑time benefit of over $170,000 just to help us put this show out, something that nobody else has ever offered before.
LISTNUM 1 \l 11990 So I think ‑‑ to me, what has been key in this relationship and we are trying to build that relationship with others like Omni, as an example where we have many similarities, and we have been successful with Omni.
LISTNUM 1 \l 11991 But with CTV I know that when I call ‑‑ whether it's Robert Hurst, it's Terry Snazel; it's one of the key people over there with whom I am working, not only will I get a callback, often I get a response. They actually pick up the phone and we can actually talk about these things and something concrete has come out of it.
LISTNUM 1 \l 11992 The same was with CHUM. I could call Sarah. I can call people over there and I knew that they would be part and parcel of finding a solution and helping us move forward.
LISTNUM 1 \l 11993 And to us that's key having been out of this industry, you know, forever until the CRTC gave us an opportunity almost eight years ago now, has been ‑‑ you know, they have been very strong supporters of the aboriginal people initiatives and we believe that this merger will only reinforce not only the relationship but the possibilities. I don't see any negatives to it. I mean, I can go back to when we looked back in the sixties when ‑‑ a study in journalism. We had the Kent Commission on media concentration and the newspaper industry. There were great fears that there would be ‑‑
LISTNUM 1 \l 11994 THE CHAIRPERSON: Wait just for the fall when we have the diversity of voices hearing.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 11995 THE CHAIRPERSON: We want to hear from you then.
LISTNUM 1 \l 11996 Helen, you had a question?
LISTNUM 1 \l 11997 COMMISSIONER DEL VAL: Just I am following up on the question on your loyalty to CTV, and I obviously can sense that, but what about thinking of it from another perspective as well? CTV will be there. Like the CTV stations as they stand is what you have built the loyalty with your successes with, but what about the opportunity of an additional outlet; someone else who also has or could be as strong for you to also start building another ‑‑ the same type of relationship? What about an additional outlet?
LISTNUM 1 \l 11998 Do you think that your existing relationship with CTV can completely outweigh the possibility of additional opportunities?
LISTNUM 1 \l 11999 MR. STOHN: Well, I think to us, to Linda and me, I mean I don't think we are looking at this as just having one outlet. I think the commitments that certainly I heard yesterday, was that there was going to be a vibrant and increasingly successful CHUM network with a separate program buyer and we have got our existing relationships with CTV. So it seems like almost the best possible situation.
LISTNUM 1 \l 12000 THE CHAIRPERSON: You mentioned, basically, only CTV can complement and I would like you to explain that. I find this kind of goes contra to us as far as I am concerned.
LISTNUM 1 \l 12001 Surely, you want to find a part of the market where you can compete and you can make a lot of ‑‑ your suggestion that if CHUM was sold to somebody else they would move to the centre, they would shed the City image and edginess and just try to become another CTV, obviously that's a possibility but there clearly is a market for CHUM. Otherwise, CTV wouldn't want to have it.
LISTNUM 1 \l 12002 Secondly, CHUM has been around a long time. It has been very successful; of late, not so much but the question is whether that market can't be explored more meaningfully with somebody with deeper resources.
LISTNUM 1 \l 12003 So why are you automatically assuming that CHUM under a different owner would gravitate towards the centre rather than exploring the established niche, if you want to call it that, that CTV ‑‑ that City established?
LISTNUM 1 \l 12004 MR. STOHN: The analogy that I used, I went to university in a small town in Ontario which only had two radio stations and they were both owned by different people and they both ended up sounding like Hot AC contemporary stations. And that was nice if you happened to like Hot AC and contemporary music, but if one person owned both those stations in the market then it would seem, it just seems to me both intuitive and economically the way it would happen is that they would have one Hot AC contemporary station and another, perhaps a country station or a niche station because why compete with themselves?
LISTNUM 1 \l 12005 So that's why it is my view that if someone is owning two stations in a market, it will be in their self‑interest rather than competing with and trying to cannibalize themselves to really stretch out. I think what you are saying is, well, isn't it in somebody else's interest to do that as well.
LISTNUM 1 \l 12006 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 12007 MR. STOHN: And to a certain extent, after the middle has been occupied that may be that they are forced to the edges, but the low hanging fruit will be that core middle audience that the advertisers are really desiring and that they have been able to deliver and that's why CTV has so many of the Top 20 shows already. People are going to want a share of that pie.
LISTNUM 1 \l 12008 That's my view in any event.
LISTNUM 1 \l 12009 THE CHAIRPERSON: But your analogies and casting back to your youth, different age, different time and much more sophisticated, much more demanding audience; not many more platforms in a fragmented market and urban market. Doesn't that ‑‑ it is basically saying the middle is ‑‑ the low hanging fruit is not that big anymore and that all you can have is the off centre very successfully?
LISTNUM 1 \l 12010 MR. STOHN: Certainly, we know that in the specialty area that's exactly what has happened, so on the cable channels we are seeing the success of the specialty channels that have arisen. But when we are still in the conventional over‑the‑air space where there are a limited number of players, to me it seems there that when you are appealing to the mass audience the tendency will be to move towards the middle.
LISTNUM 1 \l 12011 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12012 Rita, you had a question? Oh, I am sorry. I apologize.
LISTNUM 1 \l 12013 COMMISSIONER DEL VAL: So I am sorry. May I finish with my question?
LISTNUM 1 \l 12014 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 12015 COMMISSIONER DEL VAL: Just because there is a lot of concern from other intervenors on just the loss of the ‑‑ the number of outlets and I think the panel before us here are established, you know, by any stretch of the imagination but if you think on when you were starting would it not be beneficial to have more doors to knock on, to have just more strong outlets because the fact is that what is being asked before us that will be created is a very, very large conglomerate and then you do think about, you know, who are the others who could survive. There probably will not be that many. So then there would be diminished amounts of players.
LISTNUM 1 \l 12016 I mean, can you comment on the loss of outlets and do you see any benefit in sort of creating opportunities for other strong outlets? Thank you.
LISTNUM 1 \l 12017 MR. STOHN: If I can ‑‑ I don't mean to monopolize this but what I am hearing you saying is that because CTV CHUM between the two outlets will become so dominant that it may result in other players having to leave the marketplace and I am not seeing that. I know that the Competition Bureau has looked at this and said, no, no, there won't be that kind of dominant position.
LISTNUM 1 \l 12018 So to me I am seeing the same players still in the marketplace and an even stronger CHUM outlet as a result of this acquisition.
LISTNUM 1 \l 12019 MR. WEINSTEIN: I am seeing this from an entirely different point of view and, actually, it's sort of the opposite of what you are saying in that CTVglobemedia is ‑‑ when I found out about this possible acquisition I was actually quite terrified because ‑‑ I told you a little bit about the trends in classical music and performing arts and my first thought was, okay, well, that's it. Bravo! is dead because a lot of people will look at these trends.
LISTNUM 1 \l 12020 And then I started speaking to the people there at Bravo! and at City and they were having meetings with the people at CTV and they started having ‑‑ they started having this optimism and this ‑‑ and I thought ‑‑ I didn't know what this was all about and then I was talking to some of the CTV people and I realized there was this sincere interest in preserving the distinct nature of the channels but also to really promote culture. It is something that CTV hadn't done as much and it was really exciting to them. This was really something that reassured me.
LISTNUM 1 \l 12021 And, in fact, this whole question yesterday about edge. I mean, edge, edgy programming what does that mean? Does that mean it's hip? Does it mean ‑‑ what does that mean? But in a way, I mean, I make classical programs. They are the least edgy things if you think about them but it was about groundbreaking as well and about pushing extremes.
LISTNUM 1 \l 12022 So Bravo! was always really interested in the ideas that we are a little more experimental or a little bit more political musical and these things did very well. But the idea of ‑‑ when I realized ‑‑ I mean, Ivan Fecan's own interest in both preserving the different nature of these channels but also of the love of culture and the importance of that.
LISTNUM 1 \l 12023 What it made me realize is the opposite, which is I didn't want just a monopoly in culture in Canada. I have a wonderful relationship with CBC but I also have a wonderful relationship with Bravo! and the idea of one of those things disappearing terrifies me and, you know, for a while there it looked like both were going to disappear in terms of culture but I think that's not the case in either case.
LISTNUM 1 \l 12024 MR. BUTT: Yes, I don't ‑‑ sorry, I was just going to say I don't really look at this as, you know if this acquisition is allowed to take place, I don't look at it as there being fewer doors suddenly. I look at it long term as those existing doors that are out there have a greater chance of still being there 10 or 15 years down the road and my fear is that without a strong champion stewarding those, you know the keepers of those doors, those doors might be boarded up in a few years.
LISTNUM 1 \l 12025 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 12026 Well, we certainly have covered a lot of ground this morning so I hope to not keep you here for too much longer. But I do have just a couple of questions on specifics and in particular for Ms Schuyler and Mr. Stohn.
LISTNUM 1 \l 12027 You spoke about the CTV ‑‑ BCE‑CTV benefits providing financial, creative and marketing support of the websites for both Degrassi and Instant Star and an array of new media initiatives. Who owns the rights to those initiatives?
LISTNUM 1 \l 12028 MR. STOHN: We do.
LISTNUM 1 \l 12029 COMMISSIONER CUGINI: So you are able to fully exploit all the new media and ancillary rights?
LISTNUM 1 \l 12030 MR. STOHN: Absolutely. So CTV has licensed certain rights during the term of their television rights within Canada but in the foreign markets we control those rights.
LISTNUM 1 \l 12031 COMMISSIONER CUGINI: Okay, thank you.
LISTNUM 1 \l 12032 And now for Rhombas, Sparrow and Epitome, all three of you are members of the CFTPA?
LISTNUM 1 \l 12033 MR. STOHN: Yes, thank you.
LISTNUM 1 \l 12034 MS THOMPSON: Yes, and I just wanted to make one point. Corner Gas has been fully financed by the BCE benefits so the show, the website, all aspects of it. Well, until most recently. But let's just look at the first three seasons. We own the rights to the show. We own the rights to the merchandising line, et cetera, et cetera, et cetera.
LISTNUM 1 \l 12035 What is most fascinating to us, though, is that once the BCE benefits were finished CTV continued to finance us in the same way post benefits. So they have covered, you know, up to 80 percent of our production financing budget since ‑‑ you know, for the last five years with benefits and without and we have been able to maintain copyright all the way through.
LISTNUM 1 \l 12036 COMMISSIONER CUGINI: Of, again, all platforms?
LISTNUM 1 \l 12037 MS THOMPSON: Yes.
LISTNUM 1 \l 12038 COMMISSIONER CUGINI: On all platforms.
LISTNUM 1 \l 12039 Have you had the opportunity to read the CFTPA intervention ‑‑ again, for all three of you and whoever would like to answer? And I would just like to know if you have any comments on what the CFTPA has submitted as part of these proceedings since you are members.
LISTNUM 1 \l 12040 MR. STOHN: If I can make one comment, and it's on terms of trade because I was actually very involved with the negotiation, much more heavily involved than I wanted to be at the time because it went on and on; the negotiation of the initial terms of trade agreement with the CBC.
LISTNUM 1 \l 12041 And what I found about that was people ‑‑ you can look at terms of trade in one of two ways. One is that there is heavy bargaining on exact deal points and that tends to be ‑‑ but that's a little bit more the British model where it is almost mandated that there be this kind of imposed relationship between broadcasters and producers.
LISTNUM 1 \l 12042 But what we negotiated with CBC really opened the door to a much better understanding between the two parties. It was really setting the parameters of the relationship, making things that had been obscure and transparent even within the CBC and, certainly, between producers and the CBC as to how they operated, how their decision making took place, what the turnaround times would be. So there was ‑‑ it turned out to be a wonderfully illuminating experience. The CBC in the end made a website which made it more open and transparent, all of its policies to all the producers.
LISTNUM 1 \l 12043 So that aspect of the terms of the trade, you know, we think can only be beneficial both to the broadcaster, in this case the CTV, and to the producers because it just makes everything run that much more efficiently.
LISTNUM 1 \l 12044 MR. WEINSTEIN: Sorry. I just wanted to clarify just for the record that Sparrow Media is not a member of CFTPA. My company is a loan out company just providing my services as a creative entity.
LISTNUM 1 \l 12045 COMMISSIONER CUGINI: Thank you. Thank you very much, Mr. Chairman.
LISTNUM 1 \l 12046 THE CHAIRPERSON: Okay, thank you very much. I think we will take a 15‑minute break and then we will hear from those who are opposed close to the transaction.
LISTNUM 1 \l 12047 Thank you.
‑‑‑ Upon recessing at 1057 / Suspension à 1057
‑‑‑ Upon resuming at 1120 / Reprise à 1120
LISTNUM 1 \l 12048 THE SECRETARY: Please be seated. Excuse me. Please be seated.
LISTNUM 1 \l 12049 Thank you, Mr. Chairman.
LISTNUM 1 \l 12050 We will proceed to the next presentation by the intervenor Patrick Hurley.
LISTNUM 1 \l 12051 Mr. Hurley, you have 10 minutes for your presentation. Please go ahead.
LISTNUM 1 \l 12052 MR. HURLEY: Mr. Chairman, Members of the Commission, thank you very much for allowing me to come here personally to make my presentation and to participate in the public process.
LISTNUM 1 \l 12053 After listening this morning to all of the intervenors, positive intervenors, listening to all the positive consequences of the proposed takeover, I am afraid that you are about to hear a bit of a reality check. My concern is about the negative consequences of such a takeover.
LISTNUM 1 \l 12054 This year I celebrate my 50th year in broadcasting. I believe you have a copy of my curriculum vitae. It has been a long and rewarding career, beginning in 1957, radio station CFJB in Brampton, Ontario.
LISTNUM 1 \l 12055 It ended abruptly when I was fired by Rogers Communications Inc. in September of 2002, not because of my performance but because I was over the age of 65. Ted Rogers, I might add, at that time was 72 years old, but he was the Chairman and I was just a sales representative selling broadcast time for one of their many radio stations, The Fan 590.
LISTNUM 1 \l 12056 Telemedia had sold the station to Standard Radio in June of 2002 and Standard then flipped it to Rogers.
LISTNUM 1 \l 12057 September 1 I was called to a meeting with the new sales manager to discuss my new budget for the coming year. When I arrived for the meeting, I saw the human resources person in the office with the sales manager and I knew then what was about to happen. I said to her, "You are going to release me, aren't you?" She smiled and said, "We have to make some changes." "Here I am, in the autumn of my career, performing as a top sales representative, and you are going to fire me. I have never been fired in my entire broadcast career. Why?"
LISTNUM 1 \l 12058 Two weeks before I had just sold a promotion to a restaurant chain and a brewery for $100,000 with no commercials, just promotion. When the Vice President of Programming at Rogers heard about it, he came to my office to congratulate me. He shook my hand, saying that it was a great sale, and now, two weeks later, here I was being fired.
LISTNUM 1 \l 12059 The sales manager hastened to say that they had a package for me which the human resources person handed me with a smile. I turned to the sales manager and said "Why are you letting me go?" All she would say was "We have to make changes."
LISTNUM 1 \l 12060 I asked other pertinent questions, but she would give me no answers.
LISTNUM 1 \l 12061 The HR person then said, "You can call in the morning to make an appointment to come and clear out your office." So I said, "Well, why can't I get my things now?" "It is company policy", she replied. "Just don't let them dump all my files with all my personal information in it in my computer", I asked.
LISTNUM 1 \l 12062 I was then unceremoniously escorted out of the building like a convicted criminal. I have never been so humiliated in my life. This, the end of what I believe was a distinguished broadcasting career as a sales representative, a sales manager, a station manager and, finally, as a station owner of a radio station where I started my broadcast career in Brampton, Ontario.
LISTNUM 1 \l 12063 I had served the industry by serving on various committees of this CAB, I was a Director of the Broadcast Executive Society for 10 years, I served as a Director of the Radio Marketing Bureau for two years, and then two years as Chairman of the Board.
LISTNUM 1 \l 12064 I called the next day to make arrangements to come in and clear out my office. I was told this had to be done after hours so the other employees would not be upset seeing me there.
LISTNUM 1 \l 12065 I met the Human Resources person and she escorted me to my office and I asked if they had my files and personal information on a disk. I was told that they had accidentally deleted it all. Even though I said that was unacceptable, she just looked at me and shrugged her shoulders. Was it done on purpose? I think so.
LISTNUM 1 \l 12066 I was the innocent victim of a takeover by one broadcast company by another which was approved and sanctioned by the CRTC. My story is the same as hundreds of other people who have worked in the broadcasting industry here in Canada since the inception of the CRTC.
LISTNUM 1 \l 12067 In my view, the mandate of the CRTC is to protect the public interest in terms of programming to make sure there is a variety of programming to serve various tastes of the listening and viewing public, but I also believe it is my view that the CRTC has a mandate and an obligation to protect employees of the broadcast operations from unfair treatment by station owners, because broadcasting in Canada is controlled by the government through the CRTC. It is not like the private sector.
LISTNUM 1 \l 12068 I believe the record shows that the CRTC, in my view, has failed miserably through the years of its existence to protect the jobs of dedicated people who work in these broadcast operations in both radio and television. Who comes first, the employees who create the programs, entertain the audiences across Canada, or the shareholders whose driving force, sole interest, is profits.
LISTNUM 1 \l 12069 These channels and radio frequencies are public domain. They are not owned by the shareholders of the broadcast operations which operate them. They are licensed, not owned.
LISTNUM 1 \l 12070 Let's look at the record and some of the consequences of takeovers during the life of the CRTC.
LISTNUM 1 \l 12071 When Allan Slaight was given permission by the CRTC to acquire Standard Radio, hundreds of employees were let go to cut costs so he could afford to pay for the cost of the acquisition. These were hard‑working, qualified broadcasters who just wanted to do their jobs.
LISTNUM 1 \l 12072 As a result, the record will show that there were over 200 false dismissal claims filed by ex‑employees against Slaight Broadcasting as a direct result of the takeover. These people had to pay for their own legal fees just to get what they felt was fair severance. They also had to look for a new job with other broadcast operations.
LISTNUM 1 \l 12073 I am not aware of any action by the CRTC to intervene and protect these innocent victims of the takeover by Slaight Broadcasting.
LISTNUM 1 \l 12074 The CRTC granted a licence to Rawlco Communications to provide country music in Toronto on a new radio frequency. This licence was granted in spite of dissenting voices on the Commission at that time. All the programming experts stated at the time the licence was granted that it would attract a 3.5 share, not the share projected by Rawlco at that time.
LISTNUM 1 \l 12075 Country music, as most broadcasters know, is not a popular urban format. With good marketing, KISS‑FM got an initial share of 7, but gradually dropped to 3.5 over the following 7 years that Rawlco operated the station.
LISTNUM 1 \l 12076 The station was not allowed to change formats, as I understand it, for 7 years, until the seven years had expired.
LISTNUM 1 \l 12077 The same year as the commitment to country music expired, Rawlco sold the station to Rogers Communication Inc. for a reported amount in excess of $80 million. The first thing Rogers did was to change the format and fire many of the staff, including the on‑air staff who had built the loyal following of country music listeners.
LISTNUM 1 \l 12078 Now two things happened: Toronto no longer had a country music station; and employees who had worked so hard to make the station popular were out of a job. Did the CRTC intervene? Not to my knowledge.
LISTNUM 1 \l 12079 Rogers had changed the format to attract a new audience. A year later employees were again fired as the programming was a financial disaster and it did not attract the audience it had hoped.
LISTNUM 1 \l 12080 The programming format has been changed again. These programming formats of course do not have to be approved by the CRTC.
LISTNUM 1 \l 12081 Where was the CRTC? Nowhere in sight.
LISTNUM 1 \l 12082 Who benefited? In my view, the shareholders, the Beaubien family members, by some $40 million.
LISTNUM 1 \l 12083 Now let's turn our ‑‑
LISTNUM 1 \l 12084 THE CHAIRPERSON: Mr. Hurley, you are reading from your submission. We have read your submission. I have let you read until now because I wanted to see how loyally you follow your submission.
LISTNUM 1 \l 12085 I would really appreciate it if you would take it that we have read this and tell us with regard to the specific transaction what your objections are. That is really the purpose of your ‑‑ we have read your submission.
LISTNUM 1 \l 12086 So can we come to this transaction and the proposed takeover of CHUM by CTV and why you feel this should not be allowed by this Commission?
LISTNUM 1 \l 12087 MR. HURLEY: Okay.
LISTNUM 1 \l 12088 I was reading it because I felt that I had laid that out very clearly.
LISTNUM 1 \l 12089 THE CHAIRPERSON: You have, but ‑‑
LISTNUM 1 \l 12090 MR. HURLEY: You want me to summarize it?
LISTNUM 1 \l 12091 THE CHAIRPERSON: ‑‑ as I say, either summarize it or come right to the issue of CTV‑CHUM.
LISTNUM 1 \l 12092 MR. HURLEY: Okay. I was just about to start on that.
LISTNUM 1 \l 12093 May I continue or do you want me to ‑‑
LISTNUM 1 \l 12094 THE CHAIRPERSON: Sure. Go ahead.
LISTNUM 1 \l 12095 MR. HURLEY: As I said, turning to television. TSN was part of Netstar, which was a thriving broadcast operation when CTV was allowed to take it over by the CRTC. In my view, it was cash‑rich and very profitable.
LISTNUM 1 \l 12096 I worked at TSN for two years to turn their struggling radio division around. It turned around for them and retired two years later. I got to know many of the people at TSN at that time, including Rick Brace.
LISTNUM 1 \l 12097 Who benefited from this takeover?
LISTNUM 1 \l 12098 The programming did not improve, so the viewers did not benefit.
LISTNUM 1 \l 12099 A number of employees were once again fired to reduce overhead.
LISTNUM 1 \l 12100 The sales staff went through quite an upheaval. Imagine being a sales representative and not knowing what your sales budget was until January, when the broadcasting year had started in September. They didn't know what their income was going to be and the stress on the sales representatives and their families was untenable.
LISTNUM 1 \l 12101 Who benefited? In my view, the shareholders of the CTV.
LISTNUM 1 \l 12102 Now we come to another issue: control and consolidation of ownership in the broadcast industry.
LISTNUM 1 \l 12103 I oppose this proposed takeover of CHUM Limited because it further reduces the ownership of television stations in this country to a few. I'm sure others will raise the consequences of this consolidation in more detail.
LISTNUM 1 \l 12104 My major concern is the possible bias in news coverage. This is always denied, but the viewing public is not stupid and they know the political leanings of the shareholders.
LISTNUM 1 \l 12105 CHUM Limited, in my view, has been, since its creation by Allan Waters, one of the best owned and operated broadcast operations in Canada bar none. He has maintained high standards in programming, management and employee relations. In the industry, it was the company everyone wanted to work for.
LISTNUM 1 \l 12106 Since the announced takeover by CTVglobemedia, several hundred employees have been given their pink slips.
LISTNUM 1 \l 12107 Why? Even before approval by the CRTC? I don't know.
LISTNUM 1 \l 12108 Could it be Bell Globemedia will not have to pay out all these employees? I don't know that either.
LISTNUM 1 \l 12109 Was the company suffering such losses that jobs had to be cut?
LISTNUM 1 \l 12110 The big question is: How many more people will lose their jobs if this proposed takeover is approved by the CRTC?
LISTNUM 1 \l 12111 THE SECRETARY: Excuse me, Mr. Hurley, your 10 minutes has expired so I would ask you maybe to conclude.
LISTNUM 1 \l 12112 MR. HURLEY: Okay.
LISTNUM 1 \l 12113 I personally believe the viewing public will be shortchanged just as it has been in the past with all takeovers. Much is promised but little improvement is evident after the takeover.
LISTNUM 1 \l 12114 Employees are the ones who will bear the brunt of the upheaval and will suffer the most. In spite of denials, there will be hundreds of jobs eliminated to immediately reduce his overhead to help pay for the cost of the acquisition. This is the clear pattern established and documented when takeovers take place in the private sector.
LISTNUM 1 \l 12115 Therefore, in conclusion, I ask that the Commission give serious consideration to the case I have made on behalf of all employees of CHUM Limited and deny this application outright.
LISTNUM 1 \l 12116 Such a decision by the Commission would also send a clear message to individuals like myself who work and love the broadcast industry that the Commission has finally taken into consideration the rights of hard‑working and dedicated broadcast employees in this country who lose their jobs because of decisions by the Commission.
LISTNUM 1 \l 12117 THE CHAIRPERSON: Stuart?
LISTNUM 1 \l 12118 COMMISSIONER LANGFORD: Thank you. Mr. Hurley.
LISTNUM 1 \l 12119 I did read all of your intervention, by the way, so even though you didn't have time to get it all on the record today it is on the record. I want you to know that it will be part of the permanent record of this proceeding. It is there.
LISTNUM 1 \l 12120 I have a problem, though, with what you are suggesting I might as well just put it on the table.
LISTNUM 1 \l 12121 This deal is done. I mean, we haven't approved our regulatory aspect of it, but the Waters family, as I understand it, has sold. They have sold to CTVglobemedia.
LISTNUM 1 \l 12122 It is up to us as to whether we allow the structure as Mr. Fecan has said is his preference ‑‑ and I won't review that, but you know what they want. They want the radio and the specialties and some of the television channels, divest of some of the others, or whether we allow some alternative of that. But it is highly unlikely that we would ‑‑ that anyone would tolerate us ‑‑ this is my view. I'm only speaking for myself here ‑‑ just saying no, and particularly just saying no on the grounds that some employees will be laid off.
LISTNUM 1 \l 12123 I don't want you to think that we are insensitive to the pain of people like you. I felt your pain when I read this thing. I think, you know, you must have felt, as you said, humiliated, and nobody wants to go through that.
LISTNUM 1 \l 12124 So it's not that I didn't feel your pain, but people who own assets ‑‑ I don't want to sound like I'm being patronizing here ‑‑ but they have the right to sell it, whether it is a car or a painting or a house or company. Other people who buy it have a right, then, to structure it. And yes, there is going to be some pain when that is restructured.
LISTNUM 1 \l 12125 So that if you buy a company that has, because of the way it fits with your own company, too many salespeople or too many advertising people were too many programmers, unfortunately there is going to be some re‑engineering.
LISTNUM 1 \l 12126 You are quite right, there is going to be some pain on a personal basis but, you know what, fortunately or unfortunately ‑‑ I happen to think it's fortunate because I don't really feel I have the ability to deal with those kinds of questions, frankly, personally ‑‑ we can't do anything about that. That's our problem.
LISTNUM 1 \l 12127 So we understand your pain and we don't take it lightly.
LISTNUM 1 \l 12128 I think you might be gratified ‑‑ I don't know if you were in the room yesterday and I don't want to appear to be making CTV's case for them, but I think they genuinely understand this pain, too. I have the feeling that no matter how this goes they are not just going in there to slash and burn people's lives, that they are going to try as hard as they can to use people.
LISTNUM 1 \l 12129 If you were here yesterday you would have seen that their team already composed of some CHUM people. It wasn't just a CTV team and CHUM sitting in a back in room. We had Mr. Ski here, who is doing his thing for radio, and different people on the team, I saw Mr. Goldstein over there taking notes. So obviously these people, it appears, are being worked into the bigger picture. Not everybody is going to go, but you are right, some people are going to go.
LISTNUM 1 \l 12130 Anyway, I have gone on too long. I want you to know that we have read your stuff, we have heard you today, we have huge sympathy for you and I think the people involved in this deal have the same sympathy. I mean, we heard people talk very, very eloquently yesterday about how these teams hope to work together and how many of them hope they can find a career there. But you are dead right, not all of them will.
LISTNUM 1 \l 12131 Unfortunately, that is just not what we do. But we appreciate you bringing it to our attention, we really do, it is just not what we do. We don't have the jurisdiction to step in and stop sales on the grounds that there may be some restructuring and personal pain.
LISTNUM 1 \l 12132 MR. HURLEY: Is there any reason why the company that has purchased the shares of CHUM Limited cannot be told to operate the company as a separate entity rather than have it been taken over by CTVglobemedia?
LISTNUM 1 \l 12133 COMMISSIONER LANGFORD: Well, from a programming side that is what we are wrestling with right now, from the side of what people will see in their living rooms on television and what they will hear in their cars on the radio.
LISTNUM 1 \l 12134 Yes, we do have some jurisdiction there and there is a lot of to‑ing and fro‑ing right now between the Panel you see in front of you and the applicants who have come before this Panel. We are pushing for a little extra and we are pushing for more, but when it comes down to John Doe or Harriet Smith who work as receptionists or salespeople or in advertising where there will be duplication, no, we don't go there. That is not our bailiwick. We feel the pain, but we can't go there.
LISTNUM 1 \l 12135 MR. HURLEY: No, no, I understand.
LISTNUM 1 \l 12136 THE CHAIRPERSON: The answer to your specific question, the company is now being held by a trustee pending his approval.
LISTNUM 1 \l 12137 MR. HURLEY: Yes.
LISTNUM 1 \l 12138 THE CHAIRPERSON: If it doesn't get approved, the trustee will have to sell it to somebody else. The trustee is not going to operate the company.
LISTNUM 1 \l 12139 MR. HURLEY: I understand that.
LISTNUM 1 \l 12140 My question is: Obviously I get the impression that they Commission feels, and the case has been very well presented here, that rather than have it sold to someone else, an unknown, that CTV Bell Globemedia is probably the best option.
LISTNUM 1 \l 12141 Is that what ‑‑
LISTNUM 1 \l 12142 COMMISSIONER LANGFORD: We are not going to say that. I hate to see Mr. Fecan up and dancing this early in the proceedings.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12143 COMMISSIONER LANGFORD: So we will keep the dancing until later.
LISTNUM 1 \l 12144 But that is what we are discussing, what will happen and what will happen to the pieces.
LISTNUM 1 \l 12145 You know: Are we happy? In a sense we are not happy. I mean, this is a wonderful company that has been a huge part of Canadian broadcasting at every level but, on the other hand, we have heard from the people who know the company best that the time has come.
LISTNUM 1 \l 12146 I mean, Mr. Fred Sherratt is not a happy guy today in a lot of ways, you know. We don't have to have a tag sale for him, so don't worry about that ‑‑
LISTNUM 1 \l 12147 MR. HURLEY: No, that's for sure.
LISTNUM 1 \l 12148 COMMISSIONER LANGFORD: ‑‑ But he is not a happy guy in the sense of his own personal history, and yet he sees the writing on the wall and he has been very clear about it.
LISTNUM 1 \l 12149 So, as the Chairman just said, this company is going to be sold, it is just to whom.
LISTNUM 1 \l 12150 So anyway, as my kids would say, thanks for coming out. We heard you loud and clear and we share a lot of your sympathies and we will do our best.
LISTNUM 1 \l 12151 MR. HURLEY: Thank you very much.
LISTNUM 1 \l 12152 THE CHAIRPERSON: If there are no other questions, let's go on to the next intervention.
LISTNUM 1 \l 12153 Madam Boulet.
LISTNUM 1 \l 12154 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12155 I would now as the next appearing intervenor the Communications, Energy and Paperworkers Union of Canada, Mr. Peter Murdoch, to please come forward.
LISTNUM 1 \l 12156 COMMISSIONER LANGFORD: Mr. Hurley, you can step down, relax and join the spectators there and we will have the next intervenors.
LISTNUM 1 \l 12157 Thank you.
LISTNUM 1 \l 12158 THE SECRETARY: Mr. Murdoch, when you are ready for your presentation if you could introduce your panel and you will have 10 minutes for your presentation.
LISTNUM 1 \l 12159 MR. MURDOCH: Thank you and good morning.
LISTNUM 1 \l 12160 My name is Peter Murdoch, I am Vice President, Media for the Communications, Energy and Paperworkers Union of Canada. I have with me CEP's counsel, Monica Auer, who is to my left.
LISTNUM 1 \l 12161 CEP represents approximately 25,000 members in the media at Canada's radio stations, newspapers, magazines, television and film industries.
LISTNUM 1 \l 12162 In television we represent employees at CHUM as well as CTV.
LISTNUM 1 \l 12163 We have two major points.
LISTNUM 1 \l 12164 The first is that CTV hasn't met the burden of the CRTC's ownership test.
LISTNUM 1 \l 12165 The second is that if granted the application's significant negative effects will be difficult to reverse.
LISTNUM 1 \l 12166 Our first point is that even with CTV's new annual zero overlap promise its application doesn't meet the ownership test.
LISTNUM 1 \l 12167 Our written intervention listed almost 40 questions raised by the application. CTV hasn't answered most of those, or many of yours, and hasn't denied its failure to meet the test. It hasn't met the ownership's test first part since it hasn't shown that this is the best possible application under the circumstances. Instead, it is saying "Trust us, we believe in Canadian programming." I am reminded of an old expression, "Don't tell me what you believe, tell me what you do and I will tell you what I believe."
LISTNUM 1 \l 12168 As of last night, CTV wouldn't even commit to 30 more minutes per week of original local content, original news or continuing original Canadian drama. We don't know what their plans are.
LISTNUM 1 \l 12169 Rather than imaginative programming proposals, CTV is either handing us a status quo, an edgier status quo, or maybe even less than the status quo if the zero overlap promise allows non‑overlapping repeats in or outside the year.
LISTNUM 1 \l 12170 While CTV says creative people are key to his edgier plans for CHUM, we wonder just who CTV has in mind since CHUM dropped at least 344 full and part‑time positions between late 2003 and 2006.
LISTNUM 1 \l 12171 We wonder, is CTV really prepared to hire any of these positions back if half an hour of new Canadian programming threatens CHUM's viability?
LISTNUM 1 \l 12172 As for CTV's self‑proclaimed status as CHUM's white knight, we think it's evidence is dubious. CHUM's own annual reports are far more positive, recording:
"...a significant improvement in operating results in fiscal 2005 over 2004 due to broadcasting." (As read)
LISTNUM 1 \l 12173 Frankly, if this is the best use of more than 60 valuable licences, then Canadian broadcasting really is in sad shape. Settling for these meagre proposals because they are all you have, does not meet the test.
LISTNUM 1 \l 12174 CTV hasn't met the second part of the test about ownership concerns because promising to maintain separate presentation styles still allows reporters to share stories and resources and, indeed, with questions I might tell you in fact encouraged.
LISTNUM 1 \l 12175 CTV's journalistic safeguard won't protect editorial diversity because it can't. Different management and distinctive graphics won't increase full‑time news staffing levels or foster competition between journalists working for the same owner with the same cost‑cutting concerns and the same deadlines.
LISTNUM 1 \l 12176 Gatekeeping will still be a problem, for three reasons.
LISTNUM 1 \l 12177 First, those who hire, hire like‑minded people who fit the corporate culture.
LISTNUM 1 \l 12178 Second, CTV's manager and staff know who signs their cheques.
LISTNUM 1 \l 12179 Third, as the old saying goes, those who pay the piper pick the tunes.
LISTNUM 1 \l 12180 We think this analogy works in broadcasting because of the results from a recent survey of Canada's working journalists. I can supply you with a summary of this study and the appropriate questions I quoted here. We just released it to our members on the weekend.
LISTNUM 1 \l 12181 Among more than 800 responses, fewer than a third agreed that the editorial agenda was not affected by the politics of their company's corporate owners. Almost half agree that advertisers influence editorial decisions. Two‑thirds of broadcast journalists said they had been assigned stories to promote their station or management at least once. And more than three‑quarters of the respondents agreed that promotional consideration affect the news agenda.
LISTNUM 1 \l 12182 Recent empirical research from the U.S. found the media grow less critical of themselves after merger. If large media groups won't study themselves critically, what else are they missing?
LISTNUM 1 \l 12183 There is some evidence that ownership affects broadcast content in this country. Six months after buying CTV, BCE replaced four separate newscasts in Northern Ontario with one regional program. Weekly original local programming content has disappeared almost all together from CTV's current schedule for Northern Ontario.
LISTNUM 1 \l 12184 If central problem obviously is that CTV hasn't define diversity but, as Ivan Fecan said yesterday, if you can't measure it, you can't manage it. Perhaps more to the point, you can't enforce it.
LISTNUM 1 \l 12185 But even measurable safeguards can be breached, since CHUM itself breached the conditions of licence for original local news in Vancouver in 2006.
LISTNUM 1 \l 12186 Overall, since CTV hasn't shown that its giant, economy‑sized plans for journalism will safeguard, let alone strengthen diversity, it hasn't met the second part of the test.
LISTNUM 1 \l 12187 CTV also hasn't shown that its application is in the public interest, since instead of evidence it simply claims over and over that it needs to grow to do more for Canadian programming, but what, we just don't know. If size or the answer to Canadian content, CTV should have solved this problem long ago.
LISTNUM 1 \l 12188 But more concentrated ownership hasn't produced a more and better Canadian content or more and better local original content. Quite the reverse. As concentration of ownership has grown, so too has spending on foreign content, outstripping spending on Canadian programs. CTV's own projections show that in 2008‑2009 it plans to spend 58 percent more on foreign programming that on Canadian programs.
LISTNUM 1 \l 12189 But what really matters is that we don't know what CTV will or won't keep in CHUM's schedule, how fewer staff will generate more original content or how CTV will improve local news on the stations it wants to buy. We just simply do not know what the plans are.
LISTNUM 1 \l 12190 There is no one‑size‑fits‑all definition of "the public interest", but an application without one subsequent plan to increase original Canadian content surely does not meet the definition by anyone's standard.
LISTNUM 1 \l 12191 CTV hasn't shown how its application will meet the fourth part of the ownership test because its on‑air benefits for our system are, at best, unclear and, at worst, almost non‑existent. When TQS bought Cogeco's TV stations in 2001, more than $9.00 out of every $10 in benefits were directed to the screen.
LISTNUM 1 \l 12192 CTV's benefit for the system is "more efficient spending on non‑Canadian programming and lower non‑Canadian programming costs".
LISTNUM 1 \l 12193 Although CTV has attempted to convince many that it will protect our system from foreign and other competition, the fact is that non‑Canadians can't hold licences and carriage and simulcasting will still protect Canadian TV broadcasters.
LISTNUM 1 \l 12194 Our system doesn't need cheaper foreign programming, it needs more original Canadian content from more sources.
LISTNUM 1 \l 12195 Our second main point is that the application's negative effects on competitive news gathering may be irreversible until CTV itself decides to sell to the highest bidder. Their problem is this: Once a predator is released it is hard to entice it back into a cage or to make it live by new rules.
LISTNUM 1 \l 12196 It seems to us, with all due respect, that you have four options.
LISTNUM 1 \l 12197 The first is the simplest: Grant CTV's application as filed.
LISTNUM 1 \l 12198 Although 2000 interventions support this, often for similar reasons, we don't think that well‑informed, reasonable people would agree that this application serves the public interest. We think they would ask why CTV expects the CRTC to put the financial interests of two private companies ahead of Canadians' interest in a competitive marketplace of ideas.
LISTNUM 1 \l 12199 Some intervenors would support the application, but with conditions precedent. The question is whether this would be fair to CTV, whose business plan is based on the application it filed. Conditions precedent don't address the more fundamental problem that unless diversity can be measured, safeguards can't be enforced.
LISTNUM 1 \l 12200 The third option is to briefly postpone this decision until after the fall ownership policy hearing. We think any harm to CTV or CHUM would be outweighed by the benefits to the public interest.
LISTNUM 1 \l 12201 Postponement would grant all broadcasters equal treatment, not just the ones who are quickest to the post. A delay would also give everyone the chance to collect information about the effects of concentration of ownership and time for analysis. It are view, this might be the best option.
LISTNUM 1 \l 12202 Finally, you could deny CTV's application because it leaves too many questions unanswered. We all know that the broadcasting system and broadcasters have survived when other ownership transactions have been denied.
LISTNUM 1 \l 12203 We strongly recommend that you postpone your decision in this proceeding, but if delay isn't possible we urge you to deny this application because CTV hasn't answered our questions, the questions for Canadians and, more importantly, hasn't answered many of your questions.
LISTNUM 1 \l 12204 Thank you for your time.
LISTNUM 1 \l 12205 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12206 You are making a lot of points.
LISTNUM 1 \l 12207 Let me just say at the outset, your preferred option of postponing, as you know we have specifically rejected that, for the simple reason that, you know, we are not in the business of killing deals. I don't think deals of this magnitude you can ask them to hold in abeyance for that long. It is just the business reality is different. People have to plan, and they have to get ready for the next schedule, et cetera, and it would lead to a tremendous loss of value in the assets which are not necessarily of commensurate gains.
LISTNUM 1 \l 12208 I told you that part in correspondence and I have told you publicly, we are going to do this deal on the basis of our rules as they are right now.
LISTNUM 1 \l 12209 That being said, you made some very interesting points and I would like you to elaborate on them.
LISTNUM 1 \l 12210 Your first one was on editorial diversity. If I understand it, essentially you can't have editorial diversity unless you have separate owners. If you have the same owner you are not going to have editorial diversity.
LISTNUM 1 \l 12211 I believe that is, in essence, the nub of your position.
LISTNUM 1 \l 12212 Is that correct?
LISTNUM 1 \l 12213 MR. MURDOCH: Yes. Let me say that it seriously puts diversity in jeopardy. We have seen that in a number of ‑‑ particularly across media ownership.
LISTNUM 1 \l 12214 Let me just kind of ‑‑ it used to be if you were at the Globe and Mail and you offered a story to CTV, you would be fired for it. Now you are rewarded for it. So I think it is very, very difficult to have diversity.
LISTNUM 1 \l 12215 I think, Mr. Chair, all you need to do is sort of ‑‑ I know you are aware of the newspapers. The Post and CanWest is a different organization, with different values, different principles than, say, the Toronto Star. That ideology, those principles, those political positions, move their wear down into newsrooms, sometimes for political reasons, sometimes for niche marketing reasons, but it does happen and it is based on ownership, ownership trying to find their market, their market in a democratic debate.
LISTNUM 1 \l 12216 THE CHAIRPERSON: Were you hear yesterday? Were you here yesterday during the hearing?
LISTNUM 1 \l 12217 MR. MURDOCH: I'm sorry?
LISTNUM 1 \l 12218 THE CHAIRPERSON: Were you here yesterday during the hearing?
LISTNUM 1 \l 12219 MR. MURDOCH: Yes, I was. Yes.
LISTNUM 1 \l 12220 THE CHAIRPERSON: I asked Mr. Fecan exactly about that and he gave a very eloquent answer about, you know, it is in his interest to be diverse, to cover as much markets as possible. By reigning in journalists he is really not doing himself a favour. That was essentially his point.
LISTNUM 1 \l 12221 His journalists, the various editors will decide whether to share stories or whether to send out separate journalists to cover events, because only that way can he serve the very diverse markets that we have in Canada.
LISTNUM 1 \l 12222 I gather you don't except that line of reasoning.
LISTNUM 1 \l 12223 MR. MURDOCH: No. I mean initially it strikes me a bit as though a monopolistic practice is the way to ensure diversity, because you will spread the marketplace with a variety of products, a kind of Wal‑Mart view of the economy.
LISTNUM 1 \l 12224 No. I think that ownership brings with it the power and authority, over all employees to some degree, including journalists. In the long run people understand what it is that the ownership is looking for. I don't think that ‑‑ let me put it in another way.
LISTNUM 1 \l 12225 I don't think that the people who work at the Montréal Gazette or the Ottawa Citizen have a clear ‑‑ they have as clear understanding about what CanWest's ideals are and what their politics are as do the people at BCTV and Global Toronto. I think the same thing ‑‑ and those are different, different platforms. I think the same thing is more likely to happen where the platforms are the same.
LISTNUM 1 \l 12226 THE CHAIRPERSON: All right.
LISTNUM 1 \l 12227 Do you ‑‑
LISTNUM 1 \l 12228 MR. MURDOCH: Just excuse me if I can, Mr. Chair.
LISTNUM 1 \l 12229 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 12230 MR. MURDOCH: One of the problems I have here with Mr. Fecan's remarks is: If he believes this, where are the plans and the ideas to foster this? All he is telling the Commission and all he is telling Canadians is, "Trust us. We kind of believe in it."
LISTNUM 1 \l 12231 I'm sorry, I don't think it is good enough.
LISTNUM 1 \l 12232 THE CHAIRPERSON: When I questioned him about this he talked about separate news management and I said "Why don't you go one step further and go separate news gathering, which is what we have imposed in the Québec market on Québecor?" He basically said "No, that is not really a viable option because journalists, being what they are, they don't like being told and the best way for an owner is don't get involved in the news side at all. Tell them they are free and let them work it out, let them decide whether to share or not."
LISTNUM 1 \l 12233 I gather you don't agree with that either?
LISTNUM 1 \l 12234 MR. MURDOCH: No. First of all, let's remember that Mr. Péladeau has very recently said that he doesn't want that Code of Conduct to apply any more, so we are aware that it is difficult to site that when the person that was obligated to is saying "I want to renege on my commitments."
LISTNUM 1 \l 12235 But no, I don't. I mean, I think that what we need is competitive debate. What we need is actually journalists to compete with each other and to fund newsrooms, to fund news gatherers, to get the people out there finding out different kinds of information, to be competitive in the marketplace, so that Canadians over their kitchens and at their picnics can say, "You know, I read this. I saw this on CTV. I saw this on CHUM. I read this in the Globe and Mail", so that there is true diversity of news, information and opinion.
LISTNUM 1 \l 12236 I don't think that happens with same ownership.
LISTNUM 1 \l 12237 THE CHAIRPERSON: Okay. Then you mentioned gatekeeping.
LISTNUM 1 \l 12238 Could you elaborate on what you meant by "gatekeeping"?
LISTNUM 1 \l 12239 MR. MURDOCH: Let me just get back here.
LISTNUM 1 \l 12240 MR. MURDOCH: Yes, I mean ‑‑
LISTNUM 1 \l 12241 THE CHAIRPERSON: What I took down is that people hire like people and basically as a result of this CTV's owners will hire the type of people they like rather than ‑‑ I assume that is where you are going with that?
LISTNUM 1 \l 12242 MR. MURDOCH: Right. I don't think it's ‑‑ well, it probably is that, too.
LISTNUM 1 \l 12243 But certainly there is an expectation of points of view. There is an expectation of style, there is an expectation of look, and there is an expectation of political points of view.
LISTNUM 1 \l 12244 I think I would be very surprised if CTV hired, no matter how brilliant, some wild‑eyed lefty.
LISTNUM 1 \l 12245 So yes, I think there is a hiring practice that the corporation tends to hire within its image. I don't think there is one company that is unique in the course of doing that. In fact, I think ‑‑ anyway.
LISTNUM 1 \l 12246 And I think that people who they do hire know who is paying the cheques. So if I know what ‑‑ it's just easier for me to use CanWest.
LISTNUM 1 \l 12247 If I know what Mr. Asper's political point of view is ‑‑ and, by the way, he will certainly let me know ‑‑ I know within a certain framework I am expected to at least echo those.
LISTNUM 1 \l 12248 The third thing is that there is a sense of loyalty to the corporation.
LISTNUM 1 \l 12249 So it is very, very difficult to meet. I can see as a kind of gatekeeping to ensure diversity. Diversity of opinion comes out of the competitive marketplace. That is where you really see it, at least in the news and information part of the game.
LISTNUM 1 \l 12250 THE CHAIRPERSON: I raised yesterday the issue of self‑censorship. I gather you are saying that in different words. If I am an employer for CanWest, then I am going to write something that falls within the general line of the owner, to take your example.
LISTNUM 1 \l 12251 MR. MURDOCH: Yes, absolutely.
LISTNUM 1 \l 12252 By the way, I'm not suggesting that ‑‑
LISTNUM 1 \l 12253 THE CHAIRPERSON: We are not picking on CanWest.
LISTNUM 1 \l 12254 MR. MURDOCH: Yes. I'm not suggesting this goes on every day, you know.
LISTNUM 1 \l 12255 But what we do know is that where there is competition that chances are, if the Finance Minister gives a budget, I can assure you the National Post is going to have a different spin on that then the Toronto Star. That is a good thing, by the way, on both of those, and it is there because they are competing. They are true competitors.
LISTNUM 1 \l 12256 THE CHAIRPERSON: You mentioned a study that you just ‑‑ have you furnished a copy of that study to us?
LISTNUM 1 \l 12257 MR. MURDOCH: No. We just released it on the weekends in St. John's, Newfoundland to our members. I will furnish you with a summary of the copy and the ‑‑ and the questions that I have referred to here.
LISTNUM 1 \l 12258 THE CHAIRPERSON: And who conducted the study for you?
LISTNUM 1 \l 12259 MR. MURDOCH: We did a study in conjunction with Ryerson and McMaster University. We surveyed news rooms across the country ‑‑ our news rooms across the country, and we had about 850 respondents, and ‑‑
LISTNUM 1 \l 12260 THE CHAIRPERSON: Okay. And, finally, you went to the big league programming. You mentioned northern Ontario and that there has been a reduction and, in effect, that you are expecting ‑‑ you were expecting in this application to see a commitment to ‑‑ to local programming or a reversal of the situation in northern Ontario.
LISTNUM 1 \l 12261 It caught me somewhat by surprise. Tell me what happened in northern Ontario first of all. And, secondly, what you would have wanted ‑‑ expected to see in the CTV application regarding local programming.
LISTNUM 1 \l 12262 MR. MURDOCH: There were, and I've just got to jog my memory, there were services provided out of three communities I can remember. I think it was Timmins, possibly Masson, and I'm sorry I can't recall, that were withdrawn.
LISTNUM 1 \l 12263 And, you know, CTV suggested, of course, that it was in longer economically feasible to do this, and that they would be able to provide the same kind of service out of a central station.
LISTNUM 1 \l 12264 Our problem with ‑‑ and surely, as you know, in terms of let alone local news gathering, there's almost no local programming in the sense that there used to be, you know, the Galloping Gourmet here in Ottawa, or Tales of the Klondike or ‑‑ you name it, right across the country.
LISTNUM 1 \l 12265 Those shows have disappeared off the airwaves almost.
LISTNUM 1 \l 12266 So what we're concerned about now is to ensure that the news gathering part and the ‑‑ and particularly local news and information, remains as part of the obligations of ‑‑ of broadcasters.
LISTNUM 1 \l 12267 If we see through consolidation and concentration the ability for broadcasters to further erode that, it is grave concern to us, to our members, and I think to Canadians.
LISTNUM 1 \l 12268 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12269 My fellow Commissioners, do you have any questions for Mr. Murdoch?
LISTNUM 1 \l 12270 Stewart?
LISTNUM 1 \l 12271 COMMISSIONER LANGFORD: It's a question that the Chairman has put to a number of people, and maybe I should have just trusted him if he didn't put it to you, he must have had some reason, but I'll pick up on it anyway, take a chance.
LISTNUM 1 \l 12272 The problem with what you're suggesting is that this company is sold. And so what's your alternative here?
LISTNUM 1 \l 12273 I mean, when you look at what confronts us here, somebody's going to get pieces of it, not quite all of it I don't think. I mean, I suppose anything is possible. But somebody ‑‑
LISTNUM 1 \l 12274 If CTV is somehow so constrained by us that they just want out of the deal, that it's not worth it any more, the benefits are too high, and they don't have enough for economies of scale, then their only option at this point ‑‑ the Waters don't want it back, and they're not going to take it back.
LISTNUM 1 \l 12275 So, as of this moment really, the likelihood of CHUM existing, as it has existed, is just about zero. And what may exist is pieces.
LISTNUM 1 \l 12276 And I'm not sure what comfort you would get from the pieces going to unknown players, or us gathering here again in a month because "X" had bought one piece, or "Y" had bought another.
LISTNUM 1 \l 12277 Which doesn't mean it is a slam dunk for CTV, because what we have to wrestle over now is what conditions we can put on it to try to achieve some of the same sort of goals that you're speaking about. Which, interestingly enough, are some of the same goals that CTV spoke about yesterday.
LISTNUM 1 \l 12278 So we're all talking about the same thing here.
LISTNUM 1 \l 12279 And I guess what I'd like to hear from you more is rather than put it off, which the Chairman has rightly said isn't going to happen because we're here. Rather than deny it, which I think really is a mug's game because it's just going to go to someone else if we deny it.
LISTNUM 1 \l 12280 What can we do ‑‑ what can we put in place to get some of the goals you want, but allow something like this deal to go through?
LISTNUM 1 \l 12281 What would you suggest?
LISTNUM 1 \l 12282 MR. MURDOCH: Well, I don't think that ‑‑ that CTV should automatically get the green light because, as you know, Mr. Fecan characterizes CTV in some ways yesterday as a kind of Mother Teresa of the Canadian Broadcasting System and brings $1.75 billion to helped the afflicted.
LISTNUM 1 \l 12283 Clearly what we don't know here is what other proposals are possible. What other proposals were out there.
LISTNUM 1 \l 12284 The idea that CTV is the only possibility is, in fact, incredulous to me.
LISTNUM 1 \l 12285 What we do know, in fact, is that there is a very competitive market out there for media companies in this country, and the financing clearly available to it.
LISTNUM 1 \l 12286 So ‑‑ and remember that along with the company, we are buying and selling licenses. Not companies.
LISTNUM 1 \l 12287 And so ‑‑ so I'd like to have known what else is out there, and known what it is CTV is actually planning to do, other than simply saying, "Trust us, we're big."
LISTNUM 1 \l 12288 COMMISSIONER LANGFORD: Well, if you were here yesterday, you know we pushed pretty hard on that, and they may or may not come back with the homework we assigned them.
LISTNUM 1 \l 12289 I certainly would repeat that I'd advise them to, but nobody has to ‑‑ nobody has to add anything to an application. They can let it stand or fall on its own merits. They may or may not add something.
LISTNUM 1 \l 12290 But along the lines of what we're pushing, do you think, then, generally speaking, maybe it's not fair to ask you to come up with a whole formula, but do you think that with some toing‑and‑froing and pushing and pulling we could whip this into shape?
LISTNUM 1 \l 12291 For example, let me ask you a big question: Would you feel more comfortable if they were buying the A Channels, keeping them, and divesting of City?
LISTNUM 1 \l 12292 Are you more troubled because they're buying City instead of the A Channels?
LISTNUM 1 \l 12293 I'm trying to get a sense of what really troubles you here.
LISTNUM 1 \l 12294 MR. MURDOCH: Right.
LISTNUM 1 \l 12295 What troubles me is that we were not ‑‑ Canadians have not been provided with the kind of information about what they plan to do with this company, by the way, which was once new itself, which prospered through some very creative and very good management.
LISTNUM 1 \l 12296 And the idea of us simply saying that it's going to be rescued by CTV, and now for you to ask me, well ‑‑ and I want you to know what would make you most comfortable in terms of the rescue package. I'm afraid I'd say, you know what would make me most comfortable, tell me what they're going to do. Tell me what the rescue is. I don't know what it is, and neither do Canadians.
LISTNUM 1 \l 12297 COMMISSIONER LANGFORD: Okay. So you want more details is what you're saying? I mean, that would at least be ‑‑ that's the road we should start down.
LISTNUM 1 \l 12298 Do you agree we started down that road yesterday or would you ‑‑
LISTNUM 1 \l 12299 MR. MURDOCH: You know, I was impressed. You certainly tried. I don't think you got very far.
LISTNUM 1 \l 12300 COMMISSIONER LANGFORD: We're not there yet. Well, we'll keep marching.
LISTNUM 1 \l 12301 Thank you very much.
LISTNUM 1 \l 12302 MR. MURDOCH: Appreciate it.
LISTNUM 1 \l 12303 COMMISSIONER LANGFORD: Those are my questions.
LISTNUM 1 \l 12304 THE CHAIRPERSON: Thank you very much, Mr. Murdoch.
LISTNUM 1 \l 12305 MR. MURDOCH: Thank you.
LISTNUM 1 \l 12306 THE CHAIRPERSON: Ms Madam Boulet.
LISTNUM 1 \l 12307 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12308 We now invite the next appearing intervenor, Illusions Entertainment Corporation to make their presentation.
LISTNUM 1 \l 12309 If you could please introduce yourself, and you'll have ten minutes for your presentation.
LISTNUM 1 \l 12310 MR. HARVEY: Yes, I'm Bruce Harvey from Illusions Entertainment.
LISTNUM 1 \l 12311 I don't even have a copy of my intervention here, so I can't read it. I'm just going to go down that road.
LISTNUM 1 \l 12312 It's quite ironic that as I was driving here today that I noticed the Scott Paper Mill down the street.
LISTNUM 1 \l 12313 My first full‑time job was working at number 14 machine in that building. As a good union member, and now some number of years, which I won't go into, later I'm sitting at a table with the Paperworkers Union talking about the acquisition of Citytv by CHUM.
LISTNUM 1 \l 12314 That's not the ironic part. The ironic part is when I was living in Ottawa at that time there was Global Television, CTV, CBC. And a number of years later we're going back to Global TV, CTV and CBC.
LISTNUM 1 \l 12315 And, in the meantime, there have been a number of license granted across the country, there have been a number of opportunities through specialty TV and other licenses that gave people like myself, producers, windows to look at.
LISTNUM 1 \l 12316 We had stations that were owned by ‑‑ specialty stations owned by distributors, the biggest distributor in the country, the biggest lifetime programmer in the country, an independent film maker from the Maritimes had a station.
LISTNUM 1 \l 12317 Citytv, which, if you're wondering why maybe Citytv's numbers don't look so good, they were the original specialty programmer.
LISTNUM 1 \l 12318 The reason why Space, Bravo, MuchMusic are all doing so well is because they came from City. And City was the regional specialty programmer, and that's why they got the licenses.
LISTNUM 1 \l 12319 I read the ruling from the CRTC when they were granted the license, instead of the alternative choices. And the reason you gave them a license for MuchMusic is because they were going to use those assets from Citytv to help support MuchMusic.
LISTNUM 1 \l 12320 And the reason we can't separate Citytv from MuchMusic today, as Mr. Fecan said yesterday, is because they're so interrelated. You can't value one without valuing the other, and that's in the valuation portion, which I'll get to later on, creates quite a problem when you're trying to say what the benefits package should be.
LISTNUM 1 \l 12321 I suppose it's better to put it into the specialty so you don't have to pay so much for the conventional side. You only have to pay the ten percent.
LISTNUM 1 \l 12322 The reason I'm here ‑‑ one of the biggest reason I'm here is I'm an independent producer ‑‑ film producer from Alberta. And I was before the Commission some number of years ago when you first put out a call for the new stations in Alberta.
LISTNUM 1 \l 12323 I was there for the first call when we had Wendell Wilks, and we had CanWest Global, and we had the Craig family come up looking for a license. And, as you recall, they were all turned down.
LISTNUM 1 \l 12324 And the reason they were turned down is there was no additional programming benefits. There was no benefits seen to the industry at the time.
LISTNUM 1 \l 12325 A few years later you put a second call out, and at that time CanWest Global came forward and so did the Craig family.
LISTNUM 1 \l 12326 And we had a benefit at that time because we had two people looking to get those licenses, to get the station in Edmonton and the station in Calgary.
LISTNUM 1 \l 12327 And we were able to look at their bids, we were able to look at what benefits packages they were doing. And, more importantly for me, I was able to look at a programming schedule.
LISTNUM 1 \l 12328 And the reason that was important is because CanWest Global made a lot of claims. They talked about how much programming they were going to do, how they were going to give new TV series in Alberta, how they were giving new TV series in the Maritimes, how they had their existing programming across the station.
LISTNUM 1 \l 12329 But, when we looked at the programming schedule, there was only one one‑hour slot. And they were talking about how much they were going to do, but there was one one‑hour slot.
LISTNUM 1 \l 12330 So it was easy for us to look at it and say, great, you're not making any firm commitments for those things, that you don't even have a window for them on your proposed broadcast schedule. You can't even accommodate the things you're saying you're doing in your future look.
LISTNUM 1 \l 12331 Today I don't have that benefit, because I don't have a programming schedule for City, and I don't have a programming schedule for the new CTV.
LISTNUM 1 \l 12332 I just have what they have in the past, and I have this piece of paper here, which is a very slim consolidated financial projection for what's going to happen on Citytv.
LISTNUM 1 \l 12333 When we got to the licensing for the Craig family, at that time they were given the licenses for those two stations, and they were required to do three hours of drama programming and one feature film ‑‑ dramatic feature film a week.
LISTNUM 1 \l 12334 That dramatic feature film, 26 of them had to be original dramatic feature films.
LISTNUM 1 \l 12335 A Channel had committed to spend $150,000 licensing. They didn't ‑‑ not as a conditional license, but they undertook to us to spend $150,000 on each of those licenses.
LISTNUM 1 \l 12336 We move forward a few years, things were working great, Citytv and the Craigs had a good working relationship, and then everything went to hell.
LISTNUM 1 \l 12337 Citytv started programming Access with feature films, all their programming off the Citytv networks. A Channel was given a broadcast license in Toronto. They became competitors. They weren't supporting each other. And, understandably, the Craig family suffered.
LISTNUM 1 \l 12338 The venture into Toronto, as we all know, was a mistake.
LISTNUM 1 \l 12339 So Citytv came to their rescue.
LISTNUM 1 \l 12340 When we first supported the purchase by Craig for the license, the first granting of the licenses, one of the reasons we did is because it was so complementary to Citytv.
LISTNUM 1 \l 12341 Their programming schedule was very similar: commitment to feature length films.
LISTNUM 1 \l 12342 Why is that important to an Alberta producer? There's very few slots on the dial anywhere in Canada for dramatic programming for series, and we'll get to that later on. We can talk about how much money CTV actually has available for dramatic series.
LISTNUM 1 \l 12343 There's very, very few windows. And it's one producing team that does each dramatic series.
LISTNUM 1 \l 12344 Feature films, each one of them, is a new producing team.
LISTNUM 1 \l 12345 So 26 hours ‑‑ 26 feature films is 26 producers. 26 hours of ‑‑ or 22 hours, if that's what we get from CTV with the new extended series, is one producer.
LISTNUM 1 \l 12346 So the benefits were much greater ‑‑ especially in the prairies it was hard for us to get in and start creating series. The diversity of view was much greater. It was a much better deal.
LISTNUM 1 \l 12347 So, anyway, we come along to Citytv. You give the license to Citytv, you have 100 hours of programming for feature films in ‑‑ no, 100 hours in both Vancouver and Ontario and Toronto, and they get Citytv now in Alberta that has the same commitment.
LISTNUM 1 \l 12348 They bought those stations for ‑‑ those two stations for around $150 million. It was a long time ago, it was like two years ago, but they were worth $150 million then.
LISTNUM 1 \l 12349 The station they bought in Vancouver they paid I think it was $130 million for.
LISTNUM 1 \l 12350 Unfortunately, they gave it to the wrong management team, and we all made a mistake, you guys made a mistake because you granted them the sales, and said that they were going to make this a better programming industry, better broadcasting industry.
LISTNUM 1 \l 12351 And they squandered those assets so badly that now those assets are only worth 110 to $150 million. Low and high end.
LISTNUM 1 \l 12352 And that's after throwing Citytv Toronto into the mix, which is the flagship station.
LISTNUM 1 \l 12353 So add the flagship, lose $300 million. I'm not sure how that works, but...
LISTNUM 1 \l 12354 So when we went to ‑‑ we're in the situation now where we're told that Citytv has been losing money for ten years, prior to the point when you granted the right for Citytv to buy Vancouver and Edmonton and Calgary.
LISTNUM 1 \l 12355 And I'm pretty sure that I would not have supported the acquisition if I knew that Citytv was such a losing venture. I wouldn't have said that the best way to save Alberta was to give it to another losing venture.
LISTNUM 1 \l 12356 But, anyway, we're told that they were losing $68 million. More than they spend on Canadian content. I think they said yesterday it's $4 million a year.
LISTNUM 1 \l 12357 So that's $40 million over ten years. They lost 68.
LISTNUM 1 \l 12358 So we agreed to get a license to get the sale to City. City is in trouble. They want to sell now.
LISTNUM 1 \l 12359 So what do we look at today?
LISTNUM 1 \l 12360 I was here yesterday and I heard that we're all happy that Citytv is going to be sold to CTV. And the reason that is is that's going to provide more programming, more strength. It's going to get rid of the two big issues that were facing Citytv, why they struggled.
LISTNUM 1 \l 12361 One, was that the flagship stations, the Citytv stations, had to support the A Channel stations. They had to find programming that was going to fit the older demographic, and find some way to support those.
LISTNUM 1 \l 12362 The second one is was there actual programming that they were running. That the programming was not beneficial to the station. They got away from their edginess.
LISTNUM 1 \l 12363 So we look at what CTV is going to give us today that's going to relieve those problems so that this Citytv group will go forward and be a strong player in the marketplace.
LISTNUM 1 \l 12364 Well, the programming they're going to give us for the new Citytv is the left over programming that CTV has right now.
LISTNUM 1 \l 12365 They said that historically, and I assume that means over a period of years, they've been required to buy excess programming from the American broadcasters, and it's very important for the Canadian Broadcasting System to help support the divestiture of those American programs.
LISTNUM 1 \l 12366 I don't know why, if they had been buying programming that was so appropriate for the Citytv stations, that they didn't just call up their good friends, as they mentioned yesterday, and say we have this programming that we can't run on our station, it fits perfectly for you.
LISTNUM 1 \l 12367 Rather than throwing it in the garbage, like we're telling the CRTC we have to do now, why didn't they sell it to City? If it's such a good fit and if it makes such economic sense, why didn't it happen already? I don't understand that.
LISTNUM 1 \l 12368 But, anyway, we move along.
LISTNUM 1 \l 12369 They were able to get rid of the dead wood, and they sold the dead wood for 137 million I think. $137 million for the A Channel stations, with Access thrown in and Canadian Learning.
LISTNUM 1 \l 12370 So the dead wood they sold for 130, the good stations were worth 110 to 150.
LISTNUM 1 \l 12371 So now we're stuck with what's going to go forward.
LISTNUM 1 \l 12372 I feel a bit like Dustin Hoffman sort of banging up against the glass saying, "Please stop the wedding, please stop the wedding," from The Graduate, but that's what it feels like.
LISTNUM 1 \l 12373 Because when we look at what's being proposed here, all the other producers are very happy about all the benefits we're getting, all the new windows.
LISTNUM 1 \l 12374 When I look at the financial projections for CTV, there's category 7, which is where Corner Gas, Degrassi kids, all of the new programming, the new ones that Citytv have, the budgeted item, as I see it here, is slightly less than $19 million, growing a little bit each year.
LISTNUM 1 \l 12375 It sounds like a lot of money. It's double what they pay on travel and entertainment. It's almost as much as they pay to CRTC for the licenses on a yearly basis. Substantially less than you pay for outside management when it's 65 million.
LISTNUM 1 \l 12376 But, anyway, $18 million for drama and comedy.
LISTNUM 1 \l 12377 And what CTV is going to do with that is they're going to give us more Canadian programming, they're going to give longer licenses, because right now, as Citytv said yesterday, as Roma said, we only can give less than 13 episodes on some series. Others we can give a little bit more. We can't give a full amount of license fee. They can only give $350,000 per show, and it just can't get programming on the air.
LISTNUM 1 \l 12378 They need to do something more. And Citytv is going to come along and do that for us.
LISTNUM 1 \l 12379 The other thing Citytv says, they're going to be a one‑stop shop for us.
LISTNUM 1 \l 12380 They know that the CTF is tapped out, so they'd like to be the one‑stop shop that's going to provide these benefits for us.
LISTNUM 1 \l 12381 So let's look at the number, $18 million. Pick a show on CTV like Whistler. Whistler's budget is I think $1.2 million. They can tell me if I'm wrong.
LISTNUM 1 \l 12382 It's going to grow ‑‑ if you take growing one series to 22 episodes, the budget for that show is $26 million.
LISTNUM 1 \l 12383 The full budget for drama under CTV is $18 million.
LISTNUM 1 \l 12384 Let's say they do two shows. So they can give roughly 35 percent for those two one hours of drama. That's all they can commit in their budget.
LISTNUM 1 \l 12385 What they're giving in the benefits is supposed to be incremental. It's above that. So let's just look at what the real CTV Citytv is.
LISTNUM 1 \l 12386 CTV Citytv is looking at less than one hour paid for by CTV of Canadian drama.
LISTNUM 1 \l 12387 When you look at the benefits package ‑‑
LISTNUM 1 \l 12388 THE SECRETARY: Excuse me, Mr. Harvey ‑‑
LISTNUM 1 \l 12389 MR. HARVEY: Yes?
LISTNUM 1 \l 12390 THE SECRETARY: You have 30 seconds to complete your presentation.
LISTNUM 1 \l 12391 MR. HARVEY: History got a bit longer for theirs. Can I have a bit longer for mine? I think History TV had a couple of more weeks to go before they have to get rid of C.S.I., don't they? I can have maybe ten more minutes?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12392 THE CHAIRPERSON: I wasn't here for ‑‑ we're running this hearing in a very disciplined method. That's the only way we can get through all this maze of stuff.
LISTNUM 1 \l 12393 MR. HARVEY: All I can tell you is that ‑‑
LISTNUM 1 \l 12394 THE CHAIRPERSON: Please take your 60 seconds to wrap up your presentation.
LISTNUM 1 \l 12395 MR. HARVEY: I can't. The benefits package is one of the biggest things going to producers. I cannot wrap this up in 60 seconds. I'm sorry.
LISTNUM 1 \l 12396 THE CHAIRPERSON: Well, we have your submission. I'm sorry, you knew beforehand ‑‑
LISTNUM 1 \l 12397 MR. HARVEY: Each of these ‑‑ each of these items in here ‑‑ none of these items provide ‑‑ when you look at the amount that's here ‑‑ trendsetters, risk takers 30 point 75 million. The Commissioner thought it was a lot of money yesterday, broken down over a one‑year period that's not one series.
LISTNUM 1 \l 12398 Ten million dollars for feature films and dramatic ‑‑ dramatic films and documentary films spread over seven years is about a million dollars per show. That doesn't meet the commitment that A Channel made when they committed to 26 originals at $150,000 per show. The commitments in this ‑‑ the broadcast ‑‑ the benefits they're giving are less than what the Craig family gave to acquire the two stations in Alberta.
LISTNUM 1 \l 12399 Everyone can jump up and down and say it's great. There's not enough money in the benefits and in the budget for CTV to cover the producers that were up here before supporting us let alone to give new programming.
LISTNUM 1 \l 12400 THE CHAIRPERSON: Okay. Thank you. Helen, you have questions?
LISTNUM 1 \l 12401 COMMISSIONER DE VAL: Thank you, Mr. Harvey. I've read your intervention. I've listened to your presentation today. On your intervention you had talked about the writers only ‑‑ the criticism of write only, and I had the answer of Mr. Rabinovitch and ‑‑ yes, Mrs. Couture.
LISTNUM 1 \l 12402 The pattern seems to ‑‑ seems to be ‑‑ I hear all the problems. Maybe here is your two minutes to tell me in a nutshell what you want us to do? What's your solution? What ‑‑
LISTNUM 1 \l 12403 MR. HARVEY: What ‑‑ what ‑‑ not what I want you to do. I mean what they should have done. What they should have asked for. One thing I wanted to clarify too is I take ‑‑ I have a different stance than Commissioner Langford, as to what assets Citytv owns. Citytv has some great buildings. They have great logos. They do not own the licences of the actual broadcast rights.
LISTNUM 1 \l 12404 Broadcasting in Canada is privilege. It's not a right. You apply for a licence. You get a licence. You don't own it for the rest of your life.
LISTNUM 1 \l 12405 COMMISSIONER DEL VAL: So what would you like them to do?
LISTNUM 1 \l 12406 MR. HARVEY: What I would like them to do ‑‑ what could they have done? If they really believed in Canadian drama and feature film, and if they were going to increase series and they were going to make the commitments, they would have at least met the commitments that the Craigs had made for those stations. They could have met those across the Citytv format.
LISTNUM 1 \l 12407 They could have committed to doing ‑‑ to actually investing in 100 films, not just carry them with zero licence fee. They could have committed an actual licence fee similar to what they paid for dramatic programming that is series. So they could have given something more than a $150,000 an hour. But a $150,000 is a lot of money. That's $4,000,000 for this size programming.
LISTNUM 1 \l 12408 What they could have done is they could have said that they weren't going to run their Canadian content on the ‑‑ the two networks at the same time. Not just that they wouldn't have any overlap, but the Canadian content from `City would not run at the same time as the Canadian content from CTV. They would run opposite each other.
LISTNUM 1 \l 12409 That would help support. They could have taken and said ‑‑ come to the Commission and said we've listened to Telefilm, we've listened to the producers that were at the ‑‑ that Telefilm a month ago where they said how valuable it would be to have 30 second promotions for Canadian feature films on the network, and that we have two minutes of programming in all of our American programming that we run that we make all our money on.
LISTNUM 1 \l 12410 Why don't we give half ‑‑ one of those 30 seconds of one of those spots in every American show to promoting Canadian feature films and we'll give that to CAFDE, the film distributors and exhibitors.
LISTNUM 1 \l 12411 Those are the sort of things they could be doing to actually promote things. They could actually be putting this money in the budget to meet the commitments that they say in the redirect that they're going to do for Canadian content dramatic production.
LISTNUM 1 \l 12412 If there was money in here to cover Brent, to cover Steven Stohn, to cover Steven Heyges programming, to cover the programming from Alberta that was there already ‑‑ if that was in the budget then I would be happy. Because I could see what they said they were going to do ‑‑ I can see how they're going to do it. And it's here.
LISTNUM 1 \l 12413 It's not that I think what they're doing is that bad. I mean the amount of money that they're actually giving to production to put on screen is limited. I don't really understand how the theatre schools on ‑‑ end up on the screen. But ‑‑ and whether ‑‑ you know Bravo Rocks doesn't belong on there either I don't think ‑‑ or City Rocks, whatever it is called. Canada Rocks for the Cause.
LISTNUM 1 \l 12414 But providing proper benefits ‑‑ properly evaluating those assets and not saying that City was so poorly ‑‑ as the manager in the last two years ‑‑ that they squandered $300,000,000. Take the money that was set aside that they said was debt that wasn't there, attribute that to the conventionals where it really belongs, and give benefits that reflect that. Because you're taking a twin stick and you're putting there ‑‑ giving more than ten percent on those benefits.
LISTNUM 1 \l 12415 I can understand why you push and say that the conventionals aren't worth very much. Because that's where you have to give the added benefits. But the reality is that those stations are worth something. And the past shows, they're worth something.
LISTNUM 1 \l 12416 What they sold the stations ‑‑ the A Channels for shows a value. And that value is greater than what they attributed under the Merrill Lynch forecast.
LISTNUM 1 \l 12417 COMMISSIONER DEL VAL: Thank you. Those are my questions.
LISTNUM 1 \l 12418 MR. HARVEY: Oh, and by the way you mentioned my name earlier about writers. I work with both independent writers ‑‑ with independent writers from start‑up to academy award winning writers. I write myself. I'm familiar with the problems that Suzette mentioned. But I do work with writers. The reason why independent producers ‑‑ have to make money through development as well. And if you cut them out of the development process all they get is the production and all they're getting is drama series production, you're doing ‑‑ under these numbers that are in CTV you're helping to support three or four producers a year.
LISTNUM 1 \l 12419 COMMISSIONER DEL VAL: Thank you. Ms Couture wants you to phone her.
LISTNUM 1 \l 12420 MR. HARVEY: I know that.
LISTNUM 1 \l 12421 THE CHAIRPERSON: Stuart, I believe you have a question.
LISTNUM 1 \l 12422 COMMISSIONER LANGFORD: Yeah, I just ‑‑ do you accept the notion that the applicant is put before us that they are going to carry forward whatever benefits are owed under the A Channel purchase? Is what you're telling us that you don't suspect they'll do that? I'm just having a little difficulty?
LISTNUM 1 \l 12423 MR. HARVEY: No, no. I'm not saying that. I'm saying that if they're making the same commit ‑‑ benefits are an add on. We know that we are coming down to very few broadcaster left in the country. There's going to be less opportunity for acquisition, less opportunity for benefits. Benefits is not what it's about. And if we believe what they say that those are incremental, what's in the budget should be what we're really looking at. That those are the real carry forward numbers.
LISTNUM 1 \l 12424 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 12425 MR. HARVEY: So when you look at what's here ‑‑ yes, you can say that. We can have benefits for under the A Channels ones. And there will be some producers in Alberta that will get something. I'm not saying the money should go all to Alberta from here. That's not what I'm saying.
LISTNUM 1 \l 12426 COMMISSIONER LANGFORD: No, no. That's ‑‑
LISTNUM 1 \l 12427 MR. HARVEY: But feature film ‑‑
LISTNUM 1 \l 12428 COMMISSIONER LANGFORD: But you do accept that they're carrying forward the A Channel benefits?
LISTNUM 1 \l 12429 MR. HARVEY: Absolutely.
LISTNUM 1 \l 12430 COMMISSIONER LANGFORD: Okay. So what's the problem? And sorry, I just ‑‑ this is just a straight information question.
LISTNUM 1 \l 12431 MR. HARVEY: We're going to have two major conventional broadcasters in this system.
LISTNUM 1 \l 12432 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 12433 MR. HARVEY: The Canadian content drama production ‑‑ the larger one that it's committing to is $18,000,000 a year. That's what ‑‑ that's what our landscape is going to look like when the benefits are gone. Incrementally $18,000,000 going up about 2.8 percent is what we look at here. When we read their submission as to how much they expect it to go up over the licence, that's what they're talking about.
LISTNUM 1 \l 12434 COMMISSIONER LANGFORD: Well, I didn't get that impression from what they said yesterday. But I see Mr. Fecan scribbling, so we'll ‑‑
LISTNUM 1 \l 12435 MR. HARVEY: It's only ‑‑
LISTNUM 1 \l 12436 COMMISSIONER LANGFORD: ‑‑ get his answer.
LISTNUM 1 \l 12437 MR. HARVEY: It's only in the financials. I mean I'm not ‑‑ I didn't make this number up. I described their financials that they submitted.
LISTNUM 1 \l 12438 COMMISSIONER LANGFORD: But do I understand you to say ‑‑ and again I'm looking ‑‑ I'm not challenging you, I'm actually looking for information here. You're the man on the spot here. Do I understand you to take the position that you see the 18 million as all that's going into the programming? I mean ‑‑
LISTNUM 1 \l 12439 MR. HARVEY: I see it as going into drama and comedy category 7; 2008, $18,862,000; 2009, $19,398,000.
LISTNUM 1 \l 12440 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 12441 MR. HARVEY: The benefits package that is given is incremental programming, that's due to this sale here.
LISTNUM 1 \l 12442 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 12443 MR. HARVEY: I'm not talking just about what this sale ‑‑ what we're going to get just today. I'm talking about where our Canadian landscape is going.
LISTNUM 1 \l 12444 COMMISSIONER LANGFORD: But do you take their term one‑stop shopping to mean that ‑‑ if you were to put together some sort of production scheme that you would get absolutely every dime you need from CTV or just enough to get you rolling?
LISTNUM 1 \l 12445 MR. HARVEY: I can't with this amount ‑‑ with what we're talking about ‑‑ incremental ‑‑ yesterday Roma said they have seven dramatic series that they've been developing of which they might be able to get one right now.
LISTNUM 1 \l 12446 COMMISSIONER LANGFORD: Right.
LISTNUM 1 \l 12447 MR. HARVEY: With CTV they'll be able to get two or three. We heard this morning from the producers, and we heard yesterday from City ‑‑
LISTNUM 1 \l 12448 COMMISSIONER LANGFORD: Let me ask you ‑‑
LISTNUM 1 \l 12449 MR. HARVEY: ‑‑ from Citytv ‑‑ hold it ‑‑ saying that the CTF is tapped out and that the benefit coming to them is that they'll be able to provide the funding so that producers can work on casting, on script development, and we don't have to worry about going out and finding funding all around the countryside. So yes ‑‑
LISTNUM 1 \l 12450 COMMISSIONER LANGFORD: But that doesn't mean they don't have to worry about getting more funding, does it?
LISTNUM 1 \l 12451 MR. HARVEY: But I believe it means more ‑‑ at least something close to a third.
LISTNUM 1 \l 12452 COMMISSIONER LANGFORD: Okay. Well, then we'll put that to Mr. Fecan and he can enlighten us ‑‑
LISTNUM 1 \l 12453 MR. HARVEY: ‑‑ commitments are that now.
LISTNUM 1 \l 12454 COMMISSIONER LANGFORD: See, I've got another impression. I got the impression ‑‑
LISTNUM 1 \l 12455 MR. HARVEY: I know you got the other impression. But look at the numbers that are here.
LISTNUM 1 \l 12456 COMMISSIONER LANGFORD: I've seen the numbers.
LISTNUM 1 \l 12457 MR. HARVEY: They're not here.
LISTNUM 1 \l 12458 COMMISSIONER LANGFORD: I've even seen the ones on the pink pieces of paper.
LISTNUM 1 \l 12459 MR. HARVEY: Yeah, which I'd love to see.
LISTNUM 1 \l 12460 COMMISSIONER LANGFORD: Yeah.
LISTNUM 1 \l 12461 MR. HARVEY: I will give you a better analysis if you show me the pink ones.
LISTNUM 1 \l 12462 COMMISSIONER LANGFORD: I'll show you yours, you show me mine.
LISTNUM 1 \l 12463 ‑‑‑ Laughter / Rires
LISTNUM 1 \l 12464 COMMISSIONER LANGFORD: But I ‑‑ I know that line. It's like if anything happens I'll marry you, which is another one I never really wanted to trust to heavily.
LISTNUM 1 \l 12465 ‑‑‑ Laughter / Rires
LISTNUM 1 \l 12466 COMMISSIONER LANGFORD: What we have here is some questions to put to Mr. Fecan. Would you agree? I saw it differently. I thought he was explaining something differently. So let's wait for the reply. Those are my questions. I think we'll get the answers from them. And I appreciate your questions. Thank you very much.
LISTNUM 1 \l 12467 THE CHAIRPERSON: I want to ask you a bit more philosophical questions. I find your whole attitude of premise on the fact that we've got to force CTV to do this. They won't do it on their own.
LISTNUM 1 \l 12468 I mean I come at it from exactly the other end. We impose upon them Canadian content requirements. Every ‑‑ it's absolutely in their interest to meet that with the best programming possible in order to sell it, in order to get the audiences. And if that means spending money on Canadian drama they will.
LISTNUM 1 \l 12469 I mean what you put in seems to me is just sort of an illustration of what ‑‑ an indication. But the main thing is I feel it depends on their self‑interest. They can't get around the Canadian content requirement.
LISTNUM 1 \l 12470 So if you have to live it, make sure you produce the absolute best in order to get the greatest audience. I would have thought that has to be the basic equation facing Mr. Fecan and his people.
LISTNUM 1 \l 12471 MR. HARVEY: I agree, yes. But the best he can afford to put on the schedule ‑‑ but he has to look at the CFO who tells him that this is how much money he has to do that. If he can show me ‑‑ if he can go through here and say that this an accurate forecast for where their revenues are going, although City wasn't very good at it when they did their two licences. But if they can go through and say where the items are coming out ‑‑ I mean I trust them that this is how much money they say they are going to make.
LISTNUM 1 \l 12472 So if you can tell me where it is that they have money available ‑‑ where the slush funds are that should be going to Canadian content and that they are going to put them there, I'm on side. I'm not saying that ‑‑ don't get me wrong, I do not think that Ivan Fecan is bad broadcaster. I think he's a brilliant broadcaster. I think the programs they put out or excellent.
LISTNUM 1 \l 12473 I'm just saying that what we're looking at by combining these two stations together is not going to necessarily create the best environment for Canadian broadcast industry for producers. And there isn't enough money in here to do these things.
LISTNUM 1 \l 12474 So to sit there and say that the reason we should be going forward is because of A, B, C, and D ‑‑ they don't do A, B, C, and D. So give us another reason why we should go forward.
LISTNUM 1 \l 12475 Tell me what should happen? Tell me I should get out of the business and I should go back working at Number 14 Machine. You know, tell me something that says that there is some benefit for why we're doing this. I mean I think ‑‑ personally I think Paul Gratton is one of the best broadcasters in the country. I think he's got a great eye for feature film. I'm glad he's at CHUM City. And I think ‑‑ I love working with their group.
LISTNUM 1 \l 12476 Every film I've made has been on CHUM city. I've done films that have been for a million and a half to $33,000,000. They have all been on CHUM City. None of them have been on CTV. None of them have been on CBC. They have all been on CHUM. They have all been ‑‑ through Alliance.
LISTNUM 1 \l 12477 So when you look at what's there, there's a window that's available. We're going to lose that window. So where's it going to? What rights am I going to have? I supported A Channel. I was here in front of the CRTC saying don't let Global get these stations for these reasons. So ‑‑ you gave a licence. I have the licence here ‑‑ what was granted. Now we can go through all the licences and see what it was ‑‑ what part of the broadcast community you were trying to support.
LISTNUM 1 \l 12478 So I'm going to give that up. I want to know what I'm going to get in exchange? Now what's going to happen to the broadcast community? I just don't see the numbers there. I'm sorry.
LISTNUM 1 \l 12479 THE CHAIRPERSON: Okay. Thank you very much. Are there no further questions? We still have an awful lot of interveners to go through today. And then tomorrow, I guess, we're going to hear from CTV. So I would suggest we take an hour break and we come back here at 1:30.
LISTNUM 1 \l 12480 Thank you.
‑‑‑ Upon recessing à 1232 / Suspension à 1232
‑‑‑ Upon resuming at 1333 / Reprise à 1333
LISTNUM 1 \l 12481 THE CHAIRPERSON: All right. Let's resume.
LISTNUM 1 \l 12482 Madam Boulet.
LISTNUM 1 \l 12483 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12484 We will now proceed with the CBC presentation. Mr. Richard Stursberg will be introducing his panel, after which you will have ten minutes for your presentation.
LISTNUM 1 \l 12485 Please go ahead.
LISTNUM 1 \l 12486 MR. STURSBERG: Thank you. Good afternoon, Mr. Chair, Commissioners and CRTC staff. My name is Richard Stursberg and I'm Executive Vice‑President of CBC English Television.
LISTNUM 1 \l 12487 To my right is Kirsten Layfield, who is the Executive Director of Network Programming. To my left is Dave Scapilatti, the General Manager of Sales and Marketing. And to his left is Bev Kirshenblatt, the Senior Director of Regulatory Affairs.
LISTNUM 1 \l 12488 In opposing this transaction we have addressed a number of issues in our intervention. Today I would like to focus on three key questions:
LISTNUM 1 \l 12489 (1) Why is this particular application before you today?
LISTNUM 1 \l 12490 (2) Is this proposed transaction in the public interest?
LISTNUM 1 \l 12491 (3) If there are problems ‑‑ and we believe there are ‑‑ can the transaction be salvaged?
LISTNUM 1 \l 12492 Why are we here today?
LISTNUM 1 \l 12493 Let's start at the beginning. This application is the result of a decision by the Waters family to sell their interest in CHUM after the death of CHUM's founder, Alan Waters. Contrary to the suggestions of CTV, CHUM was not a struggling company that needed to be rescued, a company that was financially distressed in any way. The opposite is true. CHUM was a very successful broadcasting company that was growing on all fronts.
LISTNUM 1 \l 12494 The 50 percent premium that CTV paid for the CHUM shares is a clear testament to the success of CHUM and the value of the CHUM assets. By way of confirmation of this valuation, Astral was outbid by only 5 percent.
LISTNUM 1 \l 12495 The Waters family sold CHUM because they wanted to leave the broadcasting business, not because they had to save the company from insolvency.
LISTNUM 1 \l 12496 Is that a sufficient reason to approve this transaction? We do not think so.
LISTNUM 1 \l 12497 The Commission has an obligation under the Broadcasting Act to assess whether the transaction is in the public interest and fulfils the policy objectives of the Act, which brings me to our second question: Is this transaction in the public interest?
LISTNUM 1 \l 12498 As we identified in our written submission, this application raises numerous concerns. In our oral remarks, we would like to focus on what we consider to be the most important of these points, the effect this transaction would have on competition.
LISTNUM 1 \l 12499 CTV has tried to argue that this transaction will level the playing field between itself and Canwest. This is simply not the case. CTV is already the largest and most successful English language television broadcaster in Canada. It is not playing catch‑up with anyone.
LISTNUM 1 \l 12500 CTV wants to own two local operations in the five most important English language markets: Toronto, Vancouver, Calgary, Edmonton and Winnipeg. In their written interventions CBC, Canwest and others have shown that the existing Canwest situation is totally different from what CTV is proposing for itself.
LISTNUM 1 \l 12501 Canwest does not own two stations in any local market as defined by the CRTC. There is no structural imbalance that needs to be remedied. And while CTV has argued that the common ownership policy is no longer relevant in a world of increasing program choices, the Commission has clearly indicated that it will not review its current policy in this proceeding.
LISTNUM 1 \l 12502 Based on the facts before us, there is no justification for an exception to the Commission's common ownership policy, but that is only the beginning of the story.
LISTNUM 1 \l 12503 If this transaction were approved, CTV would capture 50 percent of all television advertising revenue in the English market, conventional and specialty. This would be a remarkable outcome. Our largest English language television broadcaster would become even larger and enjoy unprecedented market power.
LISTNUM 1 \l 12504 This level of market power would exceed all traditional measures of acceptable industry concentration, well above the Competition Bureau's market share threshold of 35 percent. If this transaction were permitted, only two major private broadcasters would remain together controlling 75 percent of all advertising revenues.
LISTNUM 1 \l 12505 In the United States, the U.S. Department of Justice and the Federal Trade Commission used the Herfindahl Index to measure concentration. Any measure above 1,800 is regarded as highly concentrated. In the case of this transaction, after the merger, the industry would be close to 3,200. Most economists would certainly regard this as an unacceptable level of concentration.
LISTNUM 1 \l 12506 The effect on other broadcasters would be significant and negative in two ways.
LISTNUM 1 \l 12507 First, this level of market power would allow CTV‑CHUM to obtain prices for its advertising inventory that would be higher than a fully competitive environment would permit. The ability to extract those premiums would inevitably come at the expense of smaller players, most notably the CBC, the only broadcaster that shows Canadian programming in real prime time.
LISTNUM 1 \l 12508 We put some data together for you in your reference materials. This is the chart. It's at the back of the speech.
LISTNUM 1 \l 12509 This chart, which relies on the CRTC's own financial data from 2005, shows how CTV would be able to use its market power to maximize its revenues and the possible consequences for smaller players.
LISTNUM 1 \l 12510 Put simply, it will be able to do two things.
LISTNUM 1 \l 12511 First, it will be able to raise the price for its existing high value properties, most notably its successful U.S. shows. This will reduce the money available to others since the conventional advertising market is flat and may shrink in the future.
LISTNUM 1 \l 12512 Second, it will be able to bundle the relatively lower valued CHUM inventory, the inventory that CBC competes against, with its high value U.S. shows to deny us selling opportunities. As a result, CTV‑CHUM's programs will become "must buys" for advertisers. Advertisers will be obliged to redirect spending away from the CBC and with more revenue going to CTV‑CHUM we will be unable to dedicate the same resources to the production of Canadian programs.
LISTNUM 1 \l 12513 We can return to the chart later, if you would like to.
LISTNUM 1 \l 12514 It is worth noting that we are not alone in thinking this would happen. The Association of Canadian Advertisers is equally concerned. The ACA states that approving the CTV application would give CTV an undue competitive advantage.
LISTNUM 1 \l 12515 If the advertisers are worried, I think we also have a right to be.
LISTNUM 1 \l 12516 The new CTV would also be able to use its dominant position and enhanced revenues to outbid others in the programming market.
LISTNUM 1 \l 12517 From CBC's perspective, this is especially troubling in the context of Canadian programming and CTV's proposal to keep all the tangible television benefits to itself.
LISTNUM 1 \l 12518 With the enhanced advertising revenues available to it, as well as control of millions of dollars of benefits money, CTV would be in a position both to outbid CBC for new Canadian programs, as well as tie up independent producers formally or informally with first look deals for CTV's sole benefit.
LISTNUM 1 \l 12519 I would like to take a moment to focus on this issue of self‑directed benefits in the context of the present transaction.
LISTNUM 1 \l 12520 The very purpose of the public benefits mechanism is to ensure that the deal also benefits the public, since the licence being sold actually belongs to the public. It is completely incompatible with the purpose of public benefits to assign them to the parties involved in the transaction. To do so turns them from public into private benefits.
LISTNUM 1 \l 12521 The only proper approach to benefits in a situation such as this is to require the benefits to be assigned in a way that benefits the broadcasting system as a whole, not just CTV and CHUM. In our view, the best mechanism for this is the Canadian Television Fund.
LISTNUM 1 \l 12522 CTV argues that the Commission should adopt the approach to their benefits as it did in 1999. It notes that the arrangement worked well because it allowed producers one stop shopping. Rather than running around trying to organize their financing, producers were able to focus on the creative work associated with making television shows.
LISTNUM 1 \l 12523 This was probably a good argument in 1999, but now all broadcasters can offer one stop shopping because the Canadian Television Fund has adopted an envelope based approach to allocating its resources.
LISTNUM 1 \l 12524 The envelope system works pretty much the same way CTV would like to use the benefits money itself. This means that putting the money directly into the Canadian Television Fund can also achieve the one stop shopping objective.
LISTNUM 1 \l 12525 We recognize that the Competition Bureau looked at this transaction. They issued subpoenas to many companies to gather information on the impact of the proposed transaction on the advertising markets. Then, before all the evidence was received, they halted the process.
LISTNUM 1 \l 12526 In this sense, it appears to us that the Bureau neither approved nor disapproved the transaction.
LISTNUM 1 \l 12527 In any event the CRTC's mandate is more fundamental and far broader than that of the Competition Bureau, and therefore its examination of this transaction is far more important. We don't think that the Commission should give any weight to the fact that the Competition Bureau chose not to take steps to further investigate and possibly block the CTV acquisition of CHUM.
LISTNUM 1 \l 12528 The Commission is in charge of ensuring that Canada has a diverse, vibrant and robust broadcasting industry which is capable of achieving the goals of the Broadcasting Act. In our view, it is clearly contrary to those goals and against the overarching public interest to permit the creation of a mega broadcaster, a company that would be able to dominate the English television market, squeezing both advertisers and other broadcasters.
LISTNUM 1 \l 12529 That brings me to our final question: Can this transaction be salvaged?
LISTNUM 1 \l 12530 Given the clear problems with this application, it is natural to ask: Is there a way to fix it? CTV says yes: safeguards.
LISTNUM 1 \l 12531 In our view, this makes no sense. There are no policy reasons for approving this transaction. The CTV acquisition of CHUM would not solve any problems. It would only create them.
LISTNUM 1 \l 12532 Why would the Commission want to create a behemoth only to then forge a set of chains to make sure it doesn't wreak havoc on the broadcasting system? Why create an unnecessary regulatory burden for the Commission and others? Why create problems of administration, monitoring and enforcement? Why do this when it is totally unnecessary?
LISTNUM 1 \l 12533 CTV does not need to buy CHUM. CTV is doing very well already and CHUM does not need to be bought by CTV. There are lots of other Canadian media companies who would be interested in the CHUM assets.
LISTNUM 1 \l 12534 That brings me back to the beginning of our presentation. Why are we here today?
LISTNUM 1 \l 12535 Because the Waters family wanted to sell CHUM and CTV and outbid Astral for the assets. That is not a good reason to approve this transaction. This transaction is against the public interest and it should not be approved.
LISTNUM 1 \l 12536 Thank you for giving us the opportunity to present these comments, and we would be happy to answer any questions that you might have.
LISTNUM 1 \l 12537 THE CHAIRPERSON: Thank you very much, Mr. Stursberg.
LISTNUM 1 \l 12538 Can you walk me through the chart for a moment and explain the numbers?
LISTNUM 1 \l 12539 MR. STURSBERG: I will. Actually, what I will do is I will ask Dave Scapillati, who is the Head of Marketing and Sales, to walk you through the chart.
LISTNUM 1 \l 12540 MR. SCAPILLATI: What we have attempted to do is put this into an easy to understand chart to take you through and try and quantify what the impact would be, using some conservative assumptions of what the impact would be with the two concerns that we have.
LISTNUM 1 \l 12541 If you look on the left, we have all the major broadcast competitors and the first column is the share of the conventional market. Currently, Canwest and CTV have primarily premium U.S. programming making up 73 percent of the total dollars.
LISTNUM 1 \l 12542 The lower demand programming is fulfilled in the market currently by CHUM, CBC and all other smaller independents.
LISTNUM 1 \l 12543 After the merger, you would see that CTV and CHUM together would represent 52 percent of conventional advertising revenues.
LISTNUM 1 \l 12544 If it holds true that they are able to command a premium, raise the price of t heir premium U.S. programming, in addition to the bundling effect by forcing advertisers to buy some of the lower priced, less demand CHUM inventory in order to get the premium price U.S., then we are looking at a range ‑‑ and I have used conservative estimates ‑‑ of 2 to 5 percent.
LISTNUM 1 \l 12545 Given that the conventional advertising market is not growing ‑‑ it is staying flat to maybe negative ‑‑ that is just sharing a pie. Any gains from one come right out of the pockets of the others.
LISTNUM 1 \l 12546 THE CHAIRPERSON: Even if I accept that, which I have some difficulty with, why would it come all out of your hide? Why not out of Canwest?
LISTNUM 1 \l 12547 MR. STURSBERG: It's possible that some of it could come out of Canwest. The idea is actually just to give you an illustrative sense of this.
LISTNUM 1 \l 12548 Our general feeling is twofold. One, as we were saying, they will be able to command the premiums in the market because they will have more market power. Second, they will be able to move the CHUM inventory more effectively.
LISTNUM 1 \l 12549 So it might be that some of it would come out of Canwest, but Canwest retains a significantly stronger position in the market than any of the smaller players.
LISTNUM 1 \l 12550 The way we have done it here, as you will see, as David will show you, is we have simply assigned the losses to the bottom players. We could do it another way, but it is just illustrative.
LISTNUM 1 \l 12551 David.
LISTNUM 1 \l 12552 MR. SCAPILLATI: So if you look at the new market share post acquisition ‑‑
LISTNUM 1 \l 12553 COMMISSIONER DEL VAL: I'm sorry, I just want to clarify. This share is of advertising revenues.
LISTNUM 1 \l 12554 MR. SCAPILLATI: Advertising revenue total conventionally.
LISTNUM 1 \l 12555 COMMISSIONER DEL VAL: Thank you.
LISTNUM 1 \l 12556 MR. STURSBERG: This is just conventional advertising revenues. It doesn't include the specialty revenues.
LISTNUM 1 \l 12557 MR. SCAPILLATI: The new share post acquisition, if we look at a 2 to 5 percent range for CTV‑CHUM combined, would be 54 to 57. CBC‑All Others would drop from 15 down to between 13 and 10.
LISTNUM 1 \l 12558 So let's look at that in real dollars and real percentage change.
LISTNUM 1 \l 12559 If they were to shift 2 percent, then total advertising revenues for the CTV and CHUM together would grow 3.8 percent. That coincides with CTV's response to deficiencies where they did say that they forecast it to grow 3 percent. So it is not too far out of the range. We believe the low end is accepted by CTV.
LISTNUM 1 \l 12560 The impact on CBC and the other smaller independents would be a much bigger impact because of our smaller base. It would be in the range of 13 to 33 percent; if you look at real dollar terms, between $38 million and $95 million.
LISTNUM 1 \l 12561 So even that small shift of 2 percent creating a $38 million shift in advertising revenues; very significant.
LISTNUM 1 \l 12562 MR. STURSBERG: Just to put it into perspective for you, right now CBC's total English language advertising revenues are about $200 million. So if it were to the high end with a $95 million loss, and even if it were split 50:50 between ourselves and the others, you can see that would wipe out almost 25 percent of our current advertising revenue.
LISTNUM 1 \l 12563 So it potentially has a very big impact on us, and we think the impact would be disproportional to the smallest players in the market; i.e., ourselves and others who are left.
LISTNUM 1 \l 12564 THE CHAIRPERSON: The second question is: You basically said we should stop this transaction. Let's not approve it and let the market speak and somebody else will come forward and pick up the assets, I gather.
LISTNUM 1 \l 12565 Yesterday, first Commissioner Langford and then I mentioned that we have trouble with this transaction because it doesn't really fit at all our two‑stick policy. The two‑stick policy is based on failing stations and I expressed the view that I didn't see that City stations fail. You could make the argument that the A stations are failing. They are certainly much unhealthier than the other.
LISTNUM 1 \l 12566 If you had a flip and in effect City chose to buy the A station and divest the City stations, will your opposition still remain the same?
LISTNUM 1 \l 12567 MR. STURSBERG: We would be much more comfortable with that.
LISTNUM 1 \l 12568 THE CHAIRPERSON: And third, on the CTF, you seem to be one of the rare people who seems to think the CTF works fine and is an example to be emulated.
LISTNUM 1 \l 12569 Do you mean to basically restructure CTF or just the CTF as right now; that all the benefits should go there?
LISTNUM 1 \l 12570 MR. STURSBERG: I think the CTF actually has come a long way. I used to have the pleasure of chairing the CTF in conceivably its darkest days, and I think they have made a lot of progress.
LISTNUM 1 \l 12571 Having said that, could the CTF operate better? Absolutely.
LISTNUM 1 \l 12572 We met Michel Arpin the other day and we gave him a series of suggestions as to how we thought the CTF could operate better. But my general feeling would be that as between letting CTV keep all the benefits money and discharge it itself versus putting the benefits money into the CTF, even as it stands now, we are much better off doing the latter.
LISTNUM 1 \l 12573 THE CHAIRPERSON: Are there any other examples where the CTV suggestion of self‑administered funds like this is in existence? You suggest the benefits should be public and not CTV‑owned. That's why they should go to the CTF or another mechanism like that rather than being administered by themselves.
LISTNUM 1 \l 12574 Is CTV ploughing new grounds?
LISTNUM 1 \l 12575 MR. STURSBERG: No. There are other benefits packages that have been put into other independent funds, but the independent funds have never been to allocate the money uniquely to the people who established the funds. Indeed, they have had requirements that they had to have boards of directors and so on and so forth.
LISTNUM 1 \l 12576 As far as I know, this is the same general structure that they proposed in 1999 and that was accepted by the Commission at the time. Indeed, I remember I was then the Chairman of the Television Fund and they had come to ask me whether I thought this was a good idea, and I said at the time I thought it was probably not a bad idea.
LISTNUM 1 \l 12577 But as I said in my oral remarks, that is now eight years ago and times have changed substantially. I think what they say has merit; that it was a good idea to have a situation where there was one stop shopping. I think it is a good idea that people can make more than 13 episodes of a show exactly along the lines that Linda Schuyler was saying earlier on today. Those are good things and we have made exactly the same points to Michel Arpin. So we agree with all that.
LISTNUM 1 \l 12578 But right now the situation is that since there is an uninvolved structure within the CTF ‑‑ and what that means is that each broadcaster is essentially handed a certain amount of cash out of the CTF and said here, go ahead make your deals with producers ‑‑ every broadcaster can now have a one stop shopping relationship with the producers.
LISTNUM 1 \l 12579 So it is in that sense that we say 1999, that was one time; 2007 it's another time. You put the money into the CTF. You can also have one stop shopping.
LISTNUM 1 \l 12580 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12581 Elizabeth, please.
LISTNUM 1 \l 12582 COMMISSIONER DUNCAN: Mr. Stursberg, I would like to start reviewing the transaction because there are more aspects to it than just the over the air television.
LISTNUM 1 \l 12583 Are you opposed to the sale of the radio portion?
LISTNUM 1 \l 12584 MR. STURSBERG: No.
LISTNUM 1 \l 12585 COMMISSIONER DUNCAN: And are you opposed to the sale of the specialty?
LISTNUM 1 \l 12586 MR. STURSBERG: No.
LISTNUM 1 \l 12587 COMMISSIONER DUNCAN: So your issue is only with conventional television.
LISTNUM 1 \l 12588 MR. STURSBERG: Our issue is with the conventional television and with the structure of the benefits.
LISTNUM 1 \l 12589 COMMISSIONER DUNCAN: On the fact that you have just said that you would be more comfortable with the A Channels, it seems to me, listening to your arguments earlier, that the issue would be the same. They would still have the advertising clout. They would still be able to force people to buy.
LISTNUM 1 \l 12590 I don't understand why you would be more agreeable to the A Channels than you would be to the CHUM channels.
LISTNUM 1 \l 12591 MR. STURSBERG: I think what I said was I would be less disagreeable on the subject. It would give me less concern but it would still give me concern.
LISTNUM 1 \l 12592 The plain fact of the matter is that the A Channels are not doing very well compared to the CHUM conventional channels. So to the extent that they are doing poorly, to that extent does alleviate my concerns. But my concerns, as you say, would still continue.
LISTNUM 1 \l 12593 COMMISSIONER DUNCAN: With the over the air television review, of course, we learned that all of the television broadcasters are sort of falling on hard times as advertising is being redirected.
LISTNUM 1 \l 12594 I think the evidence that we got yesterday from CTV was that CHUM's results are on the decline. So it seems to me that they do need to be bolstered. I didn't get the impression that they were as financially sound as you maybe thought.
LISTNUM 1 \l 12595 MR. STURSBERG: Well, I don't know. I don't have any particular insight into the CHUM numbers.
LISTNUM 1 \l 12596 What I do know is that if you were to look at the analysts' views as to the situation with respect to the performance of these assets ‑‑ this is, for example, Scotia Capital's review of the Bell Globemedia offer for CHUM in which they attempt to assess whether fair market value is being paid and the pros and cons of the transaction, et cetera. This is the August 2006 Scotia Capital piece.
LISTNUM 1 \l 12597 In their model summary of CHUM Limited, what they do is they calculate what was known in 2003, 2004 and 2005. These are actuals and then they estimate 2006, 2007 and 2008.
LISTNUM 1 \l 12598 Their estimate is that EBITDA would grow from $79.9 million in 2003 ‑‑ this is just CHUM alone ‑‑ to $137.6 million, which would mean in fact that the gross margin would improve from 15 to 20 percent. This is the view of Scotia Capital. This is not my view. But that doesn't sound to me like a distressed asset. That sounds to me like an asset which is in reasonably good shape.
LISTNUM 1 \l 12599 COMMISSIONER DUNCAN: I guess it's hard for us to comment really. They are projecting those numbers, Scotia Capital. We are relying on the folks from CHUM and CTV to give us the information they have given us.
LISTNUM 1 \l 12600 MR. STURSBERG: As I say, I have no insight into the numbers that they have produced for you. I can't comment on those. All I know is the numbers that we read from the financial analysts and the investment banking community.
LISTNUM 1 \l 12601 COMMISSIONER DUNCAN: And the fact that Astral was only below the bid by 5 percent, they must have been all in the same ballpark as far as valuing the transaction.
LISTNUM 1 \l 12602 MR. STURSBERG: Yes. Well, clearly if there had been a gigantic difference as between Astral and what it was CTV was prepared to pay, then you could say that there was something odd going on in the market.
LISTNUM 1 \l 12603 But I think the fact that Astral was only 5 percent below, what it shows is that in fact (a) there are other buyers and (b) that the other buyers will pay a substantial amount of money and a substantial premium over market for the CHUM assets.
LISTNUM 1 \l 12604 COMMISSIONER DUNCAN: And so you think that we have a concern I think about delaying the transaction. You don't think there is any concern or that we should be concerned?
LISTNUM 1 \l 12605 MR. STURSBERG: We are not proposing that you delay your decisions in any way. We understand ‑‑
LISTNUM 1 \l 12606 COMMISSIONER DUNCAN: Not to delay the decision but ‑‑ well, I guess that's what I understood you to be saying. If we don't approve it, the sale will be delayed because they will have to find another buyer.
LISTNUM 1 \l 12607 MR. STURSBERG: Or you could approve it subject to their disposing of the City TV assets. That's another way to do it.
LISTNUM 1 \l 12608 COMMISSIONER DUNCAN: What about if the funds ‑‑ and we heard a lot of support and got a lot of written interventions in support of the self‑directed fund, as we talked about.
LISTNUM 1 \l 12609 If the fund goes to the CTF fund, CBC gets 37 percent of that number. Is that correct? That's what I understood.
LISTNUM 1 \l 12610 MR. STURSBERG: That's correct.
LISTNUM 1 \l 12611 COMMISSIONER DUNCAN: So that means the money wouldn't be going directly, as I understand it, to these independent producers and writers. It would go to broadcasters, including the CBC.
LISTNUM 1 \l 12612 MR. STURSBERG: No, that's not right.
LISTNUM 1 \l 12613 The way it works in the Fund is that all the money within the Fund has to be spent on independent producers. So the 37 percent that the CBC has, that money is spent in fact licensing programs from independent producers. But the independent producers continue to own the copyright in all the programs.
LISTNUM 1 \l 12614 COMMISSIONER DUNCAN: Does the money come to CBC first?
LISTNUM 1 \l 12615 MR. STURSBERG: Well, it's not that it comes to the CBC first. The money is earmarked in such a way that the CBC can spend it with independent producers. It would be exactly the same way as CHUM is proposing to do it, as I understand it. The money would be spent on productions that would be commissioned from independent producers, which is exactly the way the CTF works right now.
LISTNUM 1 \l 12616 COMMISSIONER DUNCAN: So from your point of view there is no advantage, one system over the other.
LISTNUM 1 \l 12617 MR. STURSBERG: Yes, there's a huge advantage. The huge advantage is that if you put it into ‑‑
LISTNUM 1 \l 12618 COMMISSIONER DUNCAN: From the producers' point of view, the creative people's point of view.
LISTNUM 1 \l 12619 MR. STURSBERG: No, I don't think there will be any significant advantage. In fact, I think it will be better for the producers. I think that the producers will find themselves in a situation where they have more doors to knock on and that they will not be wholly dependent on CTV in the kind of way that they would be were the merger to go through and were CTV's proposal with respect to benefits to be agreed.
LISTNUM 1 \l 12620 Just on this point, if you don't mind, I might ask Kirsten to comment on it because we are very concerned about what this would imply about the relationship to producers.
LISTNUM 1 \l 12621 MS LAYFIELD: I think we have heard today from some producers who have had great relationships with CTV and we are not going to disavow that. In fact, CTV has done a great job in the community, and that's what makes us have a great industry.
LISTNUM 1 \l 12622 I think the concern that we have is with the self‑directed benefits package. Again, as Richard was saying, was the fact that it really pigeonholes or directs those funds to those two broadcasters.
LISTNUM 1 \l 12623 We would much prefer a system that would allow the funds to float throughout the system and actually support a broader industry.
LISTNUM 1 \l 12624 It would support program producers who produce programming that might not necessarily fit into either CTV or CHUM's programming strategy. We'd like to have a variety and keep the industry stronger.
LISTNUM 1 \l 12625 MR. STURSBERG: You know, it's not just cash. It's talent.
LISTNUM 1 \l 12626 And what worries us is that if this were to go ahead, CTV could also start to, you know, monopolize talent. Talent is rare.
LISTNUM 1 \l 12627 And the way in which this can happen is it can happen formally or it could happen informally. That essentially they'd set up a series of first‑look deals with the most gifted people.
LISTNUM 1 \l 12628 So they would say, "You come around and see us first. And, if we like it, we'll buy it. But you don't go and see anybody else until we've passed."
LISTNUM 1 \l 12629 And we think that would be destructive, not just to us, but it would be destructive to the other broadcasters in the system.
LISTNUM 1 \l 12630 COMMISSIONER DUNCAN: The CTV has proposed a number of checks and balances. I take it that you don't think that those are adequate?
LISTNUM 1 \l 12631 MR. STURSBERG: We think they're unnecessary. We think that the better ‑‑ as I was saying in our opening remarks, the ‑‑ this transaction creates a series of problems.
LISTNUM 1 \l 12632 We don't understand why the transaction is in the public interest or what the benefits would be for the public.
LISTNUM 1 \l 12633 So our view is rather than create a series of safeguards to deal with the problems created by the transaction, where there's no public interest in the transaction in the first instance, it's better simply to decline the transaction, and you don't have to get into all the safeguards.
LISTNUM 1 \l 12634 COMMISSIONER DUNCAN: And what about potential checks on ‑‑ if it were approved, what type of checks could be put in place as far ‑‑ to control them controlling the advertising? Can you think of any?
LISTNUM 1 \l 12635 MR. STURSBERG: I think it would be ‑‑
LISTNUM 1 \l 12636 COMMISSIONER DUNCAN: If it was approved. If the deal was approved.
LISTNUM 1 \l 12637 MR. STURSBERG: No, I think it would be exceptionally difficult to do that. I think that they would be exceptionally powerful in the advertising market.
LISTNUM 1 \l 12638 But, you know, you want to ‑‑ may speak to this, too, David. You're closer than I am.
LISTNUM 1 \l 12639 MR. SCAPILLATI: Well, the bundling/packaging strategy goes on today. And, you know, they're a big company and they've made all the competitors better.
LISTNUM 1 \l 12640 So I have no ‑‑ no problem at all going against a large competitor when they can make ‑‑ advertisers can make a decision on where to put their dollars when there's a somewhat level playing field.
LISTNUM 1 \l 12641 What I am resisting is where advertisers have to make decisions because they're being forced to. And it's just simply wrong. And that makes it uncompetitive for us.
LISTNUM 1 \l 12642 I don't mind going against a good competitor. I embrace that. And today they're a formidable competitor. 40 percent of the market. 52, it swings the balance.
LISTNUM 1 \l 12643 MR. STURSBERG: I'd just like to make my little point. Sometimes people think that the price of advertising inventory is just a function of how many eyeballs that you bring in. So the cost per thousand is going to be the cost per thousand. But that's not the case.
LISTNUM 1 \l 12644 That many kinds of programs command very substantial premiums in the market because they're exceptionally desirable to advertisers because the programs have such tremendous reach or cache or bang within the market.
LISTNUM 1 \l 12645 And the programs that command the greatest premiums are, in fact, the top 20 American shows.
LISTNUM 1 \l 12646 Those are the shows where you can get very big premiums.
LISTNUM 1 \l 12647 Now, if you want to pursue a bundling strategy along the lines that Dave is talking about, then what you do is you take all your low‑value inventory. And the lowest value inventory I have to tell you, sadly, is Canadian programs.
LISTNUM 1 \l 12648 And you say to the advertiser, "You want to buy the stuff you really like? Do you want to buy these terrific American shows that carry the big premiums? Fine, you have to take this as well."
LISTNUM 1 \l 12649 So that what it does is it gives them a capacity to be able to take the low‑value inventory, and the CHUM inventory by and large is very like ours. It's relatively lower value. It doesn't command the same premiums as the big U.S. shows.
LISTNUM 1 \l 12650 And they'll say, "You must take that inventory from CHUM if you want to get the top U.S. shows."
LISTNUM 1 \l 12651 Obviously we can't do that, and so suddenly we find ourselves at a very significant competitive disadvantage. As of to Dave's point, what's happening then is he's not competing on a level playing field. He's competing on one that's heavily tilted because they can engage in those kinds of bundling strategies.
LISTNUM 1 \l 12652 COMMISSIONER DUNCAN: I think I understand your point there.
LISTNUM 1 \l 12653 Could you just ‑‑ just refresh my memory on the percentage of U.S. programming that you have?
LISTNUM 1 \l 12654 MR. STURSBERG: We have essentially no U.S. programming except a couple of strips in the afternoon.
LISTNUM 1 \l 12655 You want to talk to it?
LISTNUM 1 \l 12656 MS LAYFIELD: Yes. We have a foreign programming allotment of 20 percent of the schedule.
LISTNUM 1 \l 12657 COMMISSIONER DUNCAN: All foreign.
LISTNUM 1 \l 12658 MS LAYFIELD: Yes, all foreign.
LISTNUM 1 \l 12659 COMMISSIONER DUNCAN: Yes. Okay.
LISTNUM 1 \l 12660 MR. STURSBERG: But what we have is we have, correct me if I'm wrong, Catherine, two strips in the afternoon. One is "Arrested Development", the other is "Seinfeld". Sorry, "Simpsons". We wish we had "Seinfeld".
LISTNUM 1 \l 12661 No. The "Simpsons" and then we have "Coronation Street". We'll have occasional American movies on, and that's pretty much it.
LISTNUM 1 \l 12662 But I would say this, which is why this links to the public policy issue, the deeper public policy issue, is that the CBC is the only big conventional broadcaster that puts Canadian programs on in deep prime time.
LISTNUM 1 \l 12663 The CRTC defines prime time as 7:00 to 11:00, you know, seven days a week. But the truth is, when Canadians come to watch television, they watch from 8:00 to 11:00 and the deepest part of that is Monday to Thursday.
LISTNUM 1 \l 12664 Where we try to put Canadian programs on is when Canadians are actually watching.
LISTNUM 1 \l 12665 That block of time for Global or CTV is totally taken up with their American shows. That's when they put them on. And they put them on then for good reason.
LISTNUM 1 \l 12666 So the Canadian shows fall into the sort of lower part. So it's Saturday evening, it's 7:00 to 7:30, it's 7:30 to 8:00, whatever it happens to be.
LISTNUM 1 \l 12667 But if the goal of the Commission is ultimately to ensure that the system can allow Canadian programs to get made, that are watched by Canadians, then to the extent that you damage the CBC in that respect, to that extent you damage the goals of the Commission as a whole.
LISTNUM 1 \l 12668 COMMISSIONER DUNCAN: Thank you, Mr. Stursberg.
LISTNUM 1 \l 12669 THE CHAIRPERSON: Rita?
LISTNUM 1 \l 12670 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 12671 You talk about CanWest does not own two stations in any local market as defined by the Commission, and therefore there's no structural imbalance that needs to be remedied.
LISTNUM 1 \l 12672 Do I take that to mean that you do not ‑‑ you don't recognize Toronto and Hamilton as one market?
LISTNUM 1 \l 12673 MR. STURSBERG: That's correct.
LISTNUM 1 \l 12674 COMMISSIONER CUGINI: If I live in Oakville, and we're going to use Toronto/Hamilton because it just happens to be the city I know best.
LISTNUM 1 \l 12675 But if I live in Oakville and at eight o'clock I tune to channel 3 and I'm watching "House", and then at nine o'clock I go to channel 11 and I'm watching "Raines", I may have the nights mixed up, and then at ten o'clock I go back to channel 3 and I'm watching "Brothers and Sisters."
LISTNUM 1 \l 12676 Isn't that what CTV is talking about? Because if I'm living in Oakville, I have no idea, nor probably do I care, that any ‑‑ that one of those shows or two of those shows are coming from Toronto, and the third one was coming from Hamilton.
LISTNUM 1 \l 12677 MS LAYFIELD: I live in Oakville, so I can answer that question.
LISTNUM 1 \l 12678 I think in terms of programming, you know, you're right. There is a huge amount of variety of programming on the air at any given time.
LISTNUM 1 \l 12679 I think given that we're now in a digital world, there's actually hundreds of channels. I can also watch something coming from the Atlantic CTV feed at eight o'clock at night at the same time.
LISTNUM 1 \l 12680 So I think, in terms of programming, that's probably not as much of the point we're trying to make. I think it's more in terms of the advertising markets that we see them to be a little more distinctive.
LISTNUM 1 \l 12681 COMMISSIONER CUGINI: But isn't that also the point that CTV is trying to make, in that those two Global stations, whether I'm watching them on cable or over the air, can potentially dominate the viewer's prime time schedule. Because they're watching in that one market, like I say, both signals, either over the air or on cable.
LISTNUM 1 \l 12682 And that's the structure imbalance, therefore, that CTV is addressing when it says that it wants to correct.
LISTNUM 1 \l 12683 MR. STURSBERG: Well, I've just got to say, I think there's two or three things we should bear in mind.
LISTNUM 1 \l 12684 First of all, that the local markets that we're talking about are the local markets as defined by the Commission. And, in that sense, you know, Hamilton and Toronto remain distinct local markets.
LISTNUM 1 \l 12685 Second point is that in both of those markets what has to happen is they have to continue to put up a local news cast in Hamilton, as they would put a local news cast for a locally‑licensed station in Toronto.
LISTNUM 1 \l 12686 So these are ‑‑ these are complet‑‑ and indeed their ability to be able sell across these two in advertising terms is defined by the Commission.
LISTNUM 1 \l 12687 But the other point I would make, which I think is a very important point, is that when you look at the markets where Global actually has these kinds of extension arrangements through the CH network into Hamilton or into Victoria and so on, these are minor markets.
LISTNUM 1 \l 12688 What CTV is proposing is actually to have two stations in the most important markets in the entire country. In fact, overwhelmingly the richest advertising markets in the entire country.
LISTNUM 1 \l 12689 COMMISSIONER CUGINI: Thank you. Thank you, Mr. Chairman.
LISTNUM 1 \l 12690 THE CHAIRPERSON: You speak about public interest, but you, strangely enough, do not mention at all diversity of voices.
LISTNUM 1 \l 12691 For us this is probably the biggest concern. As you know, the whole two stick policy is there to assure diversity. And we've heard from lots of people very strong views one way or another.
LISTNUM 1 \l 12692 I'd be very interested to hear what your view is on this part.
LISTNUM 1 \l 12693 MR. STURSBERG: Well, we focus on diversity issues in our written ‑‑ in our written brief, and we certainly would take the view that the greatest guarantor of diversity is, in fact, separate ownership.
LISTNUM 1 \l 12694 You've heard a lot about that in the course of the testimony over the last little while, and we would accept that in general terms that is an accurate description of what happens.
LISTNUM 1 \l 12695 Common ownership leads inevitably to a kind of cultural uniformity within the organizations that are commonly owned.
LISTNUM 1 \l 12696 We take that view. We chose to focus here rather than on the issue of concentration, rather than on the issue of diversity, but we would not distance ourselves from anything that you've already heard from people who are concerned about exactly that point.
LISTNUM 1 \l 12697 THE CHAIRPERSON: No, but you say this transaction is not in the public interest, and you only have mentioned concentration and not diversity of voices. That's why I'm raising it.
LISTNUM 1 \l 12698 MR. STURSBERG: No, I agree with you. I think we would be equally concerned about diversity, that's why we cover it in our written brief, but just in the interests of brevity, I thought we would talk about concentration, because I wanted to focus on those areas that were most particularly damaging to the CBC as an organization, rather than the areas of broader public policy.
LISTNUM 1 \l 12699 But, absolutely, with respect to general concerns about diversity, we share those concerns.
LISTNUM 1 \l 12700 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 12701 Any other questions? Stuart?
LISTNUM 1 \l 12702 COMMISSIONER LA