CRTC weighs in on Shaw-Canwest deal

CRTC chair Konrad von Finckenstein called it a "pleasant" conversation and told top Shaw Communications executives to re-file a sweetened tangible benefits package. Otherwise, Shaw Communications looks on track for a quick approval of its $2 billion takeover of Canwest Global Communications' TV assets once they emerge from creditor protection.
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CRTC chair Konrad von Finckenstein called it a “pleasant” conversation and told top Shaw Communications executives to re-file a sweetened tangible benefits package.

Otherwise, Shaw Communications looks on track for a quick approval of its $2 billion takeover of Canwest Global Communications’ TV assets once they emerge from creditor protection.

“I don’t understand why we wouldn’t ask you for the total ten percent,” von Finckenstein said Tuesday of Shaw’s proposed tangible benefits package at the end of a presentation and Q&A session with Shaw and Canwest Global executives.

The CRTC chair allowed a possible benefits package discount from Canwest Global being purchased out of bankruptcy, but likely not as large as Shaw’s total proposed $203 million tangible benefits package that includes Canwest Global’s outstanding benefits and so-called “intangible” benefits.

“You made a long issue about the intangible benefits, that you’re keeping Canwest alive. We have this major player in the broadcast industry, and a full commitment to tangible benefits that they [Canwest] assumed when they bought Alliance Atlantis,” von Finckenstein told Shaw execs.

“That is clearly a solid argument. The question is what’s the price on that. Here we need some clarification,” he added.

Von Finckenstein also let Shaw know it could hope for, at most, a seven-year broadcast license for Global Television, not ten years as earlier floated.

Those initial rulings from the CRTC followed a morning presentation by Shaw executives that pitched the Canwest Global takeover as a way to save the national network, and ready it for competition from U.S. Internet giants like Apple TV and Google.

“This is critical to maintain our competitive position,” Jim Shaw Jr., Shaw’s CEO, told the CRTC commissioners, who probed the takeover deal all morning for the risk of a market monopoly by a cable and wireless phone giant acquiring a substantial new source of programming content.

Jim Shaw, dismissing opposition from western Canadian phone giant Telus Corp., told the CRTC that his deal had the support of rivals Rogers Communications and Quebecor Media, and should not end up rewriting the rule book for the Canadian broadcast system.

Here von Finckenstein came the closest to appearing testy with Shaw, when he injected: “Mr. Shaw, this is a momentous transaction. It really does reshape the Canadian broadcast system. So as we allow you to prosper, we need to ensure it doesn’t give you an undue weight.”

To secure CRTC approval, Shaw outlined plans to spend $43 million on new morning TV news shows in Toronto, Regina, Saskatoon, Winnipeg, Montreal and Halifax, and create 100 new full-time jobs in the process.

Canwest Global last year canceled a number of morning TV news shows to cut costs while it passed through court-directed creditor protection.

Ken Stein, senior vice president of corporate and regulatory affairs at Shaw, also pitched the “intangible” benefit of Canwest Global’s TV assets being saved from the scrapheap by the acquisition.

“This is the greatest benefit of Shaw’s acquisition, the commitment to the ongoing benefits, and the new benefits. Some benefits have obvious price tags, and some do not,” he argued.

At the same time, Stein said allowing Global Television to restructure and emerge from bankruptcy protection would preserve around $100 million in independent production expenditures still on the cards.

To guard against anti-competitive behavior, Shaw also made a commitment to the CRTC to allow its rivals access to content generated by its growing media empire, and not make it exclusive to the Shaw, Corus Entertainment or Canwest Global platforms.

“This is obviously the elephant, whatever the expression is. The big fear that the preferential mode of distribution, of viewing things, will be new media,” von Finckenstein said Tuesday.

“People are very much afraid that you are going to use your enormous purchase power to buy exclusivity,” he added.

“We’re for diversity of products. Denying access or taking control for a personal issue is not even on our agenda,” Jim Shaw Jr. replied.

Shaw executives instead told the CRTC that the Canwest Global takeover aimed to supply the cable and wireless phone giant with added content that subscribers might pay for, but which would distinguish Shaw and its varied content offerings from Apple TV, Google TV and other pending competitors in the Canadian market.

The CRTC has promised to rule on the Shaw/Canwest takeover within 35 days.