television - edmonton television news archives - bgm-chum merger
On July 12th, 2006 Bell Globemedia (BGM) made a friendly takeover bid worth $1.7 billion to buy the Toronto-based radio and TV broadcaster CHUM Ltd., Citytv's owner. Bell Globemedia owns the CTV Network.
In 1954, Allan Waters bought 1050 CHUM radio in Toronto and built the CHUM brand into a major force in Canadian media, owning 33 radio stations, 12 television stations and 21 specialty channels.
Waters died December 3rd, 2005 at the age of 84.
Waters' sons did not share their father's passion for the business and left CHUM operations to Jay Switzer (whose mother was one of the founders of Canada’s first rock-and-roll TV station Citytv, along with Moses Znaimer). Citytv was purchased by CHUM in 1978.
It was Switzer who brought BGM's offer to CHUM's Board of Directors and the estate of Allan Waters agreed to support the bid.
"In Bell Globemedia's offer, we not only found value for shareholders, but confidence that we would be placing CHUM in the hands of an owner with the financial resources and track record to continue to grow and build on our collective legacy," said Jim Waters.
The Waters estate owned 88.6 per cent of the CHUM's common shares and could see a $450M cut of the purchase price. The deal is subject to regulatory approval, including the Canadian Radio-television and Telecommunications Commission.
CHUM operated Citytv outlets in Toronto, Vancouver, Calgary and Winnipeg.
CHUM also operated A-Channel stations in Barrie, Ottawa, London, Windsor, Victoria and Vancouver.
"With regulatory approval, we intend to serve Canadian audiences with both CTV and Citytv stations," said Ivan Fecan, the CEO of BGM and CTV.
"We will maintain separate and independent news divisions in order to ensure a continued diversity and competition in news coverage."
BGM said it expects to sell CHUM's A-Channel and Access Alberta television stations.
Possible buyers may include Alliance-Atlantis Canada (adding another "A" to their name), Rogers Media and TorStar (owners of the Toronto Star newspaper).
After the sale it was learned that Astral Media Inc. was also in the hunt for the CHUM properties.
Montreal-based Astral has 17 subscriber TV channels in Canada boasting more than 1.5 million viewers and 29 radio stations. Astral and business partner Corus Entertainment recently purchased the Teletoon cartoon network.
Corus is owned by the Calgary-based Shaw family and operates 2 TV stations, over 50 radio stations and 9 specialty networks.
Working together or independently Astral and Corus said they may be interested in some of CHUM media properties that BGM is likely to shed.
CHUM's specialty channel assets include Much Music, Musique Plus, Much More Music, Bravo, Space, Canadian Learning Television, Star TV, Fashion Television, Book Television and Sex TV.
BGM holds the 21-station CTV television network, 17 specialty television channels, the Globe and Mail newspaper, and several digital TV channels and internet web sites.
A graphic illustrating the impact of the Bell-CHUM merger was created by the Toronto Star and can be viewed here.
The merger of BGM and CHUM brings the issue of concentrated media ownership back into the foreground.
Media ownership has been officially debated, studied and scrutinized in Canada since the 1969 Royal Commission on Newspapers. Highlights of debates over the years can be found at the Canadian Broadcasting Corporation Archives site.
Should the BGM/CHUM merger proceed, Canada would be left with only two other media voices: public broadcaster CBC and the CanWest Global Communications Group.
ACTRA, a national organisation of performers representing the interests of 21,000 members across the country, called the proposed merger of BGM and CHUM "alarming" and called on the CRTC and the Prime Minister to intervene.
"Prime Minister Stephen Harper has to act on this issue and stop this growing media monopoly," said Stephen Waddell, ACTRA’s National Executive Director.
Waddell said at stake is Canadian culture, diversity and openness.
In June 2006 a Senate report recommended Ottawa create new mechanisms to review media deals that concentrate print and broadcasting interests in a few hands.
Conservative Heritage Minister Bev Oda refused to comment on the merger and the layoffs, but her office issued a statement saying that "we are not saying we won't ever comment, but we are not commenting at this time."
NDP heritage critic Charlie Angus called the plan for Bell Globemedia to buy CHUM a cause for great alarm.
"It's time for the Conservative government to get serious about the negative effects media concentration is having on Canadian culture and industry competition," he said.
University of Alberta media analyst Dr. Marco Adria said, "We're seeing a new era ... (new owners) really have a different view of the connection between culture and media."
"Most of the action in the Canadian TV industry has been on the industry side, as opposed to on the creative side, and that's what we're partly talking about here," said culture and media commentator Liss Jeffrey, a professor at the University of Toronto and a former CHUM producer.
"On the ground, that local touch into your community, it's very difficult to see it being fostered by this big mega-network. With this sale, we see less of the local opportunity."
Edmonton Sun columnist Graham Hicks pointed out how the merger may reflect program positioning in the local market in his July 13th, 2006 column.
CBC.ca Arts writer Stephen Cole reflected on how the Bell Globemedia-CHUM merger could be bad news for Canadians.