After facing a slew of opposition, CanWest Global president and CEO Leonard Asper must now wait for the CRTC to decide on his company’s fate in its $1.5-billion bid to acquire Alliance Atlantis Communications (not including the CSI television franchise and film distribution), with the backing of U.S. investment company Goldman Sachs. A decision isn’t expected until early next year.

At CRTC hearings in November, Asper faced intense scrutiny over the potential American control of the Canadian broadcast assets in the deal.

CRTC chair Konrad von Finckenstein questioned the veto powers granted to Goldman Sachs and the structure of the loose reporting committee between CanWest and GS. Von Finckenstein expressed concern that the reporting committee would become a de facto executive committee that would exert too much influence over company decisions.

Several unions also attacked the deal, saying it opens a ‘back door’ for American control of two Canadian broadcasters.

‘This deal effectively gives a U.S. company control over a Canadian broadcaster, which is a violation of the Broadcasting Act and Canadian policy,’ said ACTRA national president Richard Hardacre.

Under the proposed deal, CanWest would indirectly hold 67% of the voting shares, and some 35% of equity interest, while GS would hold the balance.

GS has already scooped Alliance Atlantis’ 50% interest in the CSI franchise, as well as AA’s Motion Picture Distribution LLP division (since renamed Alliance Films), and brought aboard Canadian partner EdgeStone to operate it. This part of the deal has yet to be approved by Canadian Heritage.

The deal also calls for CanWest to fold its existing TV properties into a new company that would also include Alliance Atlantis’ 13 specialty TV channels in 2011. The ownership stake at that time would be based on a formula that considers the earnings of all of the broadcasting properties. CanWest will have the option of buying out GS then, but GS could acquire majority ownership of the combined properties if CanWest falls short of its debt, cash-flow and rate-of-return benchmarks.

Asper assured the CRTC that CanWest had also looked for Canadian investors but found none, and said his company wasn’t in a position to put up another $110 million to up its equity stake to more than 50%.

‘We structured this transaction so as not to bet the farm,’ he stated.

CanWest’s $136.9-million benefits package accompanying the transaction was also attacked by unions and other groups for its length of payout – CanWest wants 10 rather than the standard seven years – and the admissibility of some of the initiatives. For example, the Writers Guild of Canada questioned the $10 million earmarked for additional news bureaus and $5 million for digitizing CanWest news footage as it does little for Alliance Atlantis, which has no news division.

CanWest made several concessions to address the CRTC concerns, but did not alter the proposed 10-year payout period for the benefits package, and company execs also noted they had no intention of having separate structures between the specialty and conventional TV assets.

In his wrap-up comments to the commission, Asper pledged to make the operation of the reporting committee more transparent. He also filed paperwork with the CRTC modifying the structure of the company’s five-member board, made up of three CanWest representatives and two GS-appointed directors. Decisions no longer require the approval of both GS-appointed directors, but only a majority of the board and one GS director.

CanWest also clarified that GS would have no veto power over program production, acquisition, program sales, affiliation agreements, advertising contracts and capital spending on the TV assets. The Winnipeg-based broadcaster also put in writing that its programming committee would be composed only of CanWest employees, all nominated by CanWest.

‘You have moved along well and we will endeavor to render a decision as soon as possible,’ stated von Finckenstein as the CRTC public hearing on the acquisition wrapped in late November.