There’s been a whole ‘lotta shakin’ goin’ on in the communications industry this year. Mega players like CanWest/Hollinger and bce/ctv burst on the scene, and billions of dollars were spent – and borrowed – to create them. Along the way, broadcasting industry regulator the crtc has been forced to rethink its role in the convulsing communications sector.

As tumultuous 2000 rumbles to a close, it’s time to divvy up the media scorecard and see who owns what, and just how closely linked Canada’s major media players really are.

Way back in 1995, CanWest Global made a play for WIC Western International Communications, the broadcast jewel of the West Coast. Five years later, on July 6, 2000, CanWest and Shaw, wic’s two principal shareholders, got the crtc’s approval to carve up the company like a holiday turkey, but not before Shaw, in a move to calm the regulator’s undue preference jitters, spun off Corus Entertainment (in Sept. ’99) as a separately traded company to hold all the cabler’s specialty tv assets.

CanWest’s plate acquired 50% of wic’s meaty assets, including eight television stations (chch Hamilton, chek Victoria, bctv Vancouver, cbc affiliates chbc Kelowna and ckrd Red Deer, plus Alberta stations citv Edmonton, cict Calgary and cisa Lethbridge). That made CanWest a national tv network, the second largest private broadcaster after ctv, and the third largest overall including cbc.

CanWest also scooped up 50% of the specialty business channel robtv. This made it a partner with The Globe and Mail, which owned the other half.

Shaw came away with a healthy serving of its own with wic’s 54.1% interest in Cancom, which includes Star Choice. Back in April, it traded some of its southern Ontario and New Brunswick cable operations for some of Rogers Communications’ b.c. cable assets, which basically split Canada’s cable operations between the two companies.

Corus Entertainment got wic’s specialty channel interests, including 50% of Family Channel which owns 40% of Teletoon, plus MovieMax!, Superchannel and Viewers Choice. Corus also got 12 radio stations including Q107 (cilq) in Toronto and Rock 101 (cfmi) in Vancouver.

crtc approval of the wic deal was, however, conditional on CanWest divesting itself of tv stations ckvu Vancouver, and cfcf Montreal (a ctv affiliate), and Corus giving up its 50% interest in Family.

At press time, none of these conditions had been met. Corus, whose focus is children’s television and music, is in no hurry to sell Family by the crtc’s deadline of January 2001. However, Astral Media is a likely buyer since it already owns 50% of the channel, and therefore has the right of first refusal. Family would also fit nicely with Alliance Atlantis Communications’ lifestyle programming.

Meanwhile, over at CanWest, cfcf lies in trust until a buyer can be found, and CanWest has until Dec. 29 to sell its 70% interest in ckvu, whose approximate street value has been pegged at $150 million. CanWest’s original deadline was Nov. 6, but the broadcaster asked, unsuccessfully, that the crtc extend the deadline to May 2001. That’s because the crtc overturned an earlier decision, and may now grant licence approval for a Vancouver multicultural tv station in February 2001.

If so, prospective buyers of ckvu like Rogers, chum and Craig Communications, may pass on acquiring the station in favor of the less costly gamble of winning the licence application in February. In fact, Rogers has applied for a multicultural licence in Vancouver before, and chum recently won a licence for a new station in Victoria. Whoever buys ckvu will likely do so after CanWest’s Dec. 29 deadline, placing the ckvu property in trust.

That means CanWest may not have the ckvu money to help pay for its $3.2-billion acquisition of up to 200 of Conrad Black’s Hollinger newspapers, including 50% of The National Post (and dailies like the Ottawa Citizen, Calgary Herald and Montreal Gazette), plus Hollinger’s Internet interests like Canada.com and CareerClick.com. The deal closed Nov. 15, making CanWest a huge player with significant holdings in broadcasting, newspapers and the Internet.

However, the transaction is financed heavily by debt, and is nearing closure in the midst of an uncertain financial market.

‘The market, especially in the States, is so margin influenced, and the margin debt is as high as it’s ever been, ‘says Rob Harwood of Lafferty Harwood & Partners. ‘If that starts to come down the other way, you’re going to have a pretty bad downward move in the market. If that happens, the seller will be the beneficiary; the buyer will have paid too much for his takeovers.’

At press time, CanWest had scaled back its original offer of $3.5 billion to $3.2 billion, and had decided not to purchase Hollinger’s Southam Magazine and Information Group, a weekly real estate publication and two unidentified Ontario papers.

The deal will be a combination of a $2.8 billion secured loan from the banking consortium headed by cibc (as noted in the story) and CanWest Media will issue $660 million in senior subordinated notes.

Adding to CanWest’s challenges is the fact that according to the crtc, its acquisition of 50% of The National Post puts it in a conflict of interest position with regard to rob tv. CanWest can’t own half of the Post and share ownership of rob tv with The Post’s key rival, The Globe and Mail.

At press time, CanWest was in talks with prospective rob tv buyers, but had publicly stated it hoped to buy out The Globe and Mail’s share. Izzy Asper even suggested to one reporter that should CanWest retain rob tv, the channel could be reborn as Financial Post tv.

Were it not for the crtc’s ruling on rob tv, CanWest might have become a partner of bce. The telecom giant just spent $4 billion for control of Thomson Corporation’s The Globe and Mail, plus its website holdings, and doled out $2.3 billion to acquire Canada’s largest private broadcaster, ctv.

In 1999, before it was acquired by bce, ctv bought NetStar (owner of Discovery Channel, rds and Canada’s largest sports channel, tsn). But it already had a 40% controlling interest in regional specialty network Sportsnet, so the crtc ordered ctv to divest itself of the specialty channel by March 24, 2001.

Rogers recently purchased an 80% stake in the Toronto Blue Jays baseball team for us$112 million, and is keen to complement that buy with ctv’s Sportsnet (of which it already owns 29%). Other interested parties include CanWest, Corus, Astral and aac, whose Headline Sports would fit nicely with Sportsnet.

Rogers, meantime, has its own challenges. Some investors think the cable company paid too much for the Jays, and for its star player Carlos Delgado, who got a four-year, $68-million contract, making him baseball’s highest paid player.

‘He [Ted Rogers] is paying a lot for it [Toronto Blue Jays] and now they’ve hired a prime player at a very substantial salary,’ says Harwood. ‘I think he’s in trouble with that.’ The cable company is also having problems with its high-speed Internet service, Rogers@home.

But Rogers still has the country’s biggest wireless phone and cable operation, plus major broadcasting and publishing assets. And it collected a handsome kill fee of $241 million, after failing in its bid to purchase Groupe Videotron earlier this year. Quebecor picked up the cable company for $4.9 billion.

Rogers bounced back to buy Cable Atlantic for $232 million and is reportedly interested in properties such as Torstar (which also lost out to Quebecor in its 1998 attempt to buy Sun Media). If Rogers purchases Torstar, it would still end up associated with bce and The Globe and Mail, since they are partners with Torstar in the Web ventures Toronto.com and Workopolis.com.

At press time, bce, Canada’s number one telecom company, was still awaiting crtc approval on its ctv/Globe and Mail deal, which would make it the first telecom company to own both a national tv network and a national newspaper.

Like Shaw, bce will also create a standalone media company. Helmed by ctv’s president and ceo Ivan Fecan, the organization will include such assets as ctv, The Globe and Mail and Bell’s Sympatico-Lycos, and has been valued at approximately $4 billion. bce holds 70.1%, The Thomson Corporation has a 20% stake and the Thomson family holds 9.9% of the stock.

The bce/ctv deal is being closely watched by many players, including Corus. If the crtc allows telecommunications giant bce to swallow up both ctv and The Globe and Mail, it may be only a matter of time before it relaxes or even withdraws its ruling that a cable company can only own up to 20% of an analogue specialty channel.

That would be great news for Corus, which with every acquisition is getting more and more pieces of the Teletoon pie. Corus entered the wic deal with 20% ownership of the kids channel. Then, it picked up animation house Nelvana for $554 million in September (a deal which is expected to close this month) and got another 20% of Teletoon. As it stands, its 50% interest in Family Channel (which owns 40% of Teletoon) is being held in trust, but if the crtc rules change, Corus could ultimately own 80% of Teletoon.

Corus has also partnered this fall with singer Anne Murray’s Balmur Entertainment to create bcm (Balmur Corus Music), which will produce, distribute and market country music, and with Torstar on COOLeh.com, an online retail market. It may also be interested in Astral Media, Torstar, chum and Alliance Atlantis.

Meanwhile, Telus, Canada’s second largest telephone company, bought wireless provider Clearnet for $6.6 billion this fall, and is steadily building its core telecom and Internet protocol businesses across the country. To finance the expansion, Telus has sold off some key real estate, including its Vancouver headquarters and the twin-tower Telus Plaza in Edmonton for a reported total of $192.25 million. On the block right now are the Telus Tower in Calgary and the Calgary Mobility building.

Though it says it’s not interested in gobbling up media companies, Telus has made a subtle foray into the tv and film production business, partnering with the National Screen Institute Canada to create the online database www.screentradecanada.com. And now that CanWest has the content, Telus could be the one to carry it to consumers by partnering with the network.

Izzy Asper has talked about the value of building alliances, particularly where content carriers are concerned, and Telus says it prefers them to takeovers. Quebecor’s Pierre Karl Peladeau has also noticed Telus’ preference, and seems open to the possibilities. If Telus doesn’t become the pipeline for either CanWest or Quebecor, Rogers might, since it hasn’t ruled out future dealings with its Videotron rival.

With industries and properties cross-pollinating at warpspeed, the crtc has a huge challenge ahead to monitor and rule on the proceedings. More significantly, it may soon need to expand its limited jurisdiction of the broadcasting arena, or risk becoming obsolete.

In the meantime, a feast of luscious properties awaits. There is the Winnipeg Free Press and the Hamilton Spectator, being eyed by CanWest to complement the tv stations it holds in those markets. And there is Winnipeg cabler Moffat Communications (CanWest owns 11.5%), which owns specialty channel wtn and cky-tv, the ctv affiliate in Manitoba. Many players would love a bite of chum, Astral or aac. All three see themselves as buyers, but their excellent product makes them tempting takeover targets. Stay tuned. *