GATINEAU, QC — CRTC chair Konrad von Finckenstein expressed concerns Monday about veto powers granted to Goldman Sachs, as hearings got underway into the $2.3-billion acquisition of Alliance Atlantis by CanWest Global and its U.S. partner.

‘I’m not trying to be difficult. I’m supposed to determine who’s in control here,’ said von Finckenstein.

CanWest executives said a veto by GS would apply only to decisions ‘outside the normal course of business,’ such as spending, acquiring debt or selling TV channels worth more than $10 million. The question of which partner will be in charge has been a key but foggy point since the deal was struck.

If ‘something material happens, you know it when it happens,’ said CanWest general counsel Richard Leipsic.

‘That’s no comfort to me,’ responded the chair, who suggested in his questioning that the limits on GS were too low.

GS could block CanWest from moving into radio or buying new media properties, CanWest executives stated, but the American investment banker would have no say over such things as a big marketing push, programming buys or high-definition upgrades. Under the proposed deal, CanWest will hold indirectly 67% of the voting shares, and some 35% equity interest in the indirect subsidiary holding the combined broadcasting businesses. Goldman Sachs will hold indirectly 33% of the voting shares, and about 65% equity interest.

Goldman Sachs managing director Gerry Cardinale said his bank has no interest in running the TV assets.

‘We do not see ourselves as a strategic investor in the broadcast assets, but rather a financial backer, supporting CanWest,’ said Cardinale. ‘We understood the regulatory need for Canadian control.’

But several unions say the deal opens a ‘back door’ for American control of two Canadian broadcasters. About 50 members of CEP, ACTRA and CUPE protested outside. They appeared inside for the hearings later in the afternoon.

‘This deal effectively gives a U.S. company control over a Canadian broadcaster, which is a violation of the Broadcasting Act and Canadian public policy,’ said ACTRA national president Richard Hardacre. ‘Increased foreign control of broadcasting would damage our cultural sovereignty.’

CanWest says the deal is necessary for it to compete effectively in a rapidly changing media world. Adding Alliance Atlantis’ 13 specialty TV channels to its core business of over-the-air stations will enable it to tap into subscription revenues and more advertising dollars, which are increasingly shifting to the specialty TV sector.

It also means that the Alliance Atlantis specialty TV channels would have the promotional push of CanWest’s over-the-air TV, its web properties and its daily newspapers. The hearings will continue on Tuesday.