With a new slate of commissioned series on the horizon and the need to compete on the same footing with CTV and Global to acquire programming, CHUM’s acquisition of Craig Media couldn’t have come at a better time for the Toronto-based media company.

CHUM announced April 12 that it has signed a definitive agreement, pending CRTC approval, to purchase all shares of Craig Media for $265 million. The deal establishes CHUM with four Western conventional stations – A Channels in Edmonton, Calgary, Winnipeg, plus CKX in Brandon – and gives the broadcaster a second local Toronto station, Toronto 1.

The deal also adds MTV Canada, MTV2 and TV Land digital specialty television channels to CHUM’s burgeoning specialty properties.

CHUM now has a presence in virtually every major center from Ottawa to Victoria. It has yet to establish a foothold in Quebec or the Maritimes.

But, despite appearances, CHUM president and CEO Jay Switzer maintains that CHUM is not out to become the next national network, but rather will expand its position as a series of local stations tied together by some common national programming and centralized back-office support.

What the new acquisition does is boost its ad revenue pool, allowing CHUM to further spread the risk involved with acquiring expensive U.S. programs and commissioning a growing slate of national programming ventures. ‘Critical mass does matter. It lets us take larger risks,’ says Switzer.

The broadcaster is set to announce a new lineup of commissioned series including Godivas, a 16-ep series out of Vancouver from Keatley Film. Pending CTF funding, Godivas will be CHUM’s first nationally produced indigenous series.

‘We have a full, 10-point Canadian, visibly Canadian, hyper-Canadian series – our first big one in production in Vancouver right now,’ says Switzer. ‘We have to pay the same licence fee to trigger Telefilm CTF that Global and CTV do, yet with less coverage. It’s frustrating for everyone.

‘Now we are able to ensure that [Godivas] is seen by more [viewers]. We can be more aggressive with Canadian producers and frankly get more back from revenues for the costs that we are already committing to. We don’t quite have one hand tied behind our back anymore.’

CHUM is also behind a pair of Detective Murdoch Mysteries MOWs from Shaftesbury Films and Original Pictures, plus the six-hour mini Outpost and 10-ep dramatic series Cancer: A Practical Application, both from Crescent Entertainment.

While Switzer says the Craig deal was in the works since before Christmas, the stakes were raised following a CRTC February decision to deny CHUM its application to launch stations in Calgary and Edmonton.

‘CHUM’s aspirations to grow in Western Canada are well known and this acquisition provides us with not only an opportunity to reach Alberta and Manitoba audiences on a conventional television platform, but provides additional digital channels to complement CHUM’s stable of specialty brands,’ says Switzer.

Switzer estimates that the Alberta stations will be able to generate up to $50 million per year in revenue for the broadcaster.

CHUM says it plans to file an application with the CTRC by mid-May to transfer ownership and control of Craig’s broadcasting assets. The regulator would demand the sale of Toronto 1 to a third party before giving the deal its blessing, and CHUM has indicated that it intends to do just that once the deal goes through.

As for the MTV properties, which some industry watchers believe CHUM might be asked to divest of because they compete directly with its music video-oriented MuchMusic stations, Switzer is adamant that the properties fit well in CHUM’s stable. ‘MTV is not a music service, it’s a youth service. It has very little music on it,’ he says.

‘These are important diginets. These are very small businesses right now, but, no, MTV, MTV2 are an important part of this. We think they fit well with our existing basket of channels.’

Craig, long established in Western Canada, won the licence for its Toronto 1 station in a controversial CRTC decision in 2002, beating competing bids from Torstar Corp., Alliance Atlantis Communications and CanWest Global. Those media companies are considered the likely front-runners to snap up Toronto 1 along with Quebecor.

Analysts believe it was the huge expense of launching the Toronto station, coupled with lower than expected ad revenues that forced Craig Media president and CEO Drew Craig to begin courting suitors for his family-owned company.

‘Certainly it impacted our decision-making process in terms of how long it was going to take us to get Toronto 1 turned around. So that was a factor,’ says Craig. ‘In terms of Toronto 1 itself, we were not meeting the business plan that we’d set out.’

Craig had expected to generate revenues of about $33 million at T1 in its first year. Media experts suggest Craig will be lucky to reach $15 million. The company has also been struggling with the aftereffects of a prolonged labor strike at A-Channel Edmonton.

While the $265-million price tag falls well below Craig’s reported asking price of $400 million, a sombre-sounding Craig says he believes the deal was on par with the company’s market value ‘under the circumstances, with Toronto 1 at the point it was in its life cycle.’

CHUM says it plans to finance the purchase with bank debt.

-www.chumlimited.com