Muting a bitter TV battle

BCE and now CTV boss George Cope


Investors barely batted an eyelash last week when phone giant BCE revealed it had struck a $1.3-billion deal to buy CTV, the country’s top television network—a deal that continues a significant reorientation of the media landscape that began with Shaw Communication’s purchase of Global TV earlier this year. The reason? There are no immediate winners or losers. No one has figured out a way to benefit from owning both TV content and the “pipes” that deliver it to consumers—at least, not yet.

In fact, the only one that appears poised to come out ahead in the near-term is the Canadian Radio-television and Telecommunications Commission. The country’s broadcast watchdog has spent the past few years at the centre of an ugly fight between Canada’s ailing broadcast networks—CTV, CBC and Global, among others—and satellite and cable firms like Bell, Shaw and Rogers Communications (which own Maclean’s magazine) over the concept of “fee for carriage.” Dubbed a “TV tax” by Bell, Shaw and Rogers, the idea is that cable and satellite firms should be forced to pay for carrying the networks’ over-the-air signals on their services—an argument that’s now been rendered moot by the recent takeovers. “Fee for carriage doesn’t mean anything when the content owners and the content distributors are one and the same,” says Carmi Levy, an independent analyst.

Suffice to say, it probably wasn’t the market-based solution that CRTC chairman Konrad von Finckenstein had in mind earlier this year when he ordered both sides to find a negotiated solution to the industry’s internecine feud.

As for the BCE deal itself, Levy says the decision to buy back the rest of the network (BCE purchased CTV in 2000, but gradually sold off all but a 15 per cent stake) should be viewed as a long-term strategic bet on the importance of owning content like TV shows and movies so it can be offered up more easily on a variety of platforms, including computers, smartphones and TV sets. “Consumers won’t wake up tomorrow to a suddenly changed media landscape because of these deals,” says Levy. They will, however, be spared having to once again sit through the lengthy TV ads that were employed by both sides in the fee-for-carriage dispute.

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