Out with the old and in with the new, media that is.

This June, the Canadian Television Fund will hold its last 17-member board meeting, and the Canada Media Fund will hold its first seven-member one, according to the CTF, which is now officially ‘transitioning’.

That means the Canada Media Fund merger announced by Heritage on March 9 (of the current CTF and the existing Canada New Media Fund, for April 1, 2010) will already have its board (which includes the chair) in place at the Banff Television Festival.

The seven new CMF board members will include two independent representatives for Canadian Heritage and five for the BDUs, subject to approval or rejection by Heritage, which kicks in

$134.7 million of the total

$310-million CMF over two years.

Meanwhile, each of the five big BDUs – Rogers, Shaw, Bell TV, Cogeco and Quebecor’s Videotron – will be allowed to make recommendations to Heritage on the five new board members in question. And although no definition of ‘independent’ has yet been supplied by Heritage, the idea is that the board members will not be direct or indirect recipients of Fund coin, therefore avoiding any potential conflict of interest.

Who those CMF board members will be remains a mystery, and even broadcast insiders are baffled about the nomination process or what the new guidelines might look like.

‘We don’t know what we don’t know,’ says one muzzled broadcast exec. ‘Now there are more questions than answers. The new board will set the criteria.’ And the new board has until April 1, 2010 to make new guidelines.

Shaw Communications’ outspoken CEO Jim Shaw – who lobbied hard to have the CTF guidelines and rules overhauled – calls the ‘sweeping changes’ both ‘bold and comprehensive.’ He says they are ‘long overdue’ decisions that are ‘supported by the private sector.’

Quebecor Media is also ‘very happy’ about the new CMF, according to Isabelle Dessureault, VP corporate affairs. ‘We’ve been talking about the fund’s management problems for the last two years,’ she says of the existing CTF.

‘Now there will only be seven people on the board, and five will be nominated by the satellite and cable providers,’ Dessureault continues. ‘Therefore, those who contribute the most money will have an advantage.’

Videotron and the other BDUs pay a levied ‘tax’ to such funds as part of their licence agreements with the CRTC. And Videotron and Shaw reportedly contribute the ‘most money’ – approximately $14.3 million and $56 million, respectively, annually – since contributions are based on a complex equation that includes percentages of revenue and subscriber fees.

What broadcasters and producers do know is that Heritage wants to ‘get governance and accountability right; reward success and require innovation; focus the investment on what Canadians want; and level the playing field.’

Canwest’s Christine Shipton, senior VP drama and factual content, says the new CMF principles look good at first glance, although it’s too soon to know what the long-term ramifications will be.

‘The devil will be in the details, but top line, the intentions are excellent – the two platforms, audience success, high definition – this is totally on track with what we are doing,’ Shipton continues.

But ‘we need to know what kind of consultation mechanism will be put in place – and there is no question there will be one – so we will have a chance to speak our mind. Because the overriding intent of the fund is to generate and support popular programming – which we commission – the board needs to talk to us. We are in this together, so I am not too concerned [that the board is dominated by cable companies].’

Aside from governance, the other major change expected in the new CMF guidelines will address the touchy subject of in-house productions, which effectively means that broadcasters will no longer be considered in conflict of interest if they produce their own shows with fund money.

Nonetheless, that about-face in regulations may mean big changes for both broadcasters and independent producers.

For instance, Canwest has ‘pulled all in-house production way back,’ Shipton says. But ‘this [new] fund won’t kick in for another year, so it is something we will take into account because it is available, but it sure isn’t in our business plan right now.’

Producers are concerned that allowing in-house productions by broadcasters will diminish independent voices; however, vertically integrated companies such as Quebecor applaud the idea as they say it will allow creators to concentrate on content instead of finance.

‘In the past, the rules were so complex that private producers became financial specialists – experts at obtaining money from the fund – instead of concentrating on making original programming,’ says Quebecor’s Dessureault, adding: ‘Yes, private-sector producers are still important. We work with a number of them.’

CBC/Radio-Canada executives were unavailable for comment. However, a spokesman said that ‘overall, our official view of the media fund is that they’ve done this the right way. The changes are very positive.’

At a glance, that may seem like a strange comment when the CBC will have its ‘guaranteed envelope’ – or a fixed 37% of the CTF pie – cancelled when the new CMF begins, but there may be method in the madness.

Broadcasters as a whole didn’t favor elimination of the 37% envelope for CBC, says one insider. Being nearly exclusively in the Cancon business, CBC has the capacity to put up the most licence fees for Canadian shows, and therefore can claim an even bigger chunk of the CMF pot. This is why the privates wanted the two-stream system – to keep public dollars separate from private ones. The government rejected that recommendation. Some feel that, in the long run, this is actually a golden opportunity for the Ceeb.

With files from Patricia Bailey, Cheryl Binning and Mark Dillon