Do digital channels count? That’s one of the questions now on the minds of CRTC commissioners following two days of hearings in Gatineau, QC – where stakeholders debated the finer points of CHUM Television’s proposed buyout of its stricken, western rival Craig Media.

CHUM says if the deal goes through, it will put up $21 million to help independent production in Manitoba and Alberta, in keeping with CRTC regs that require a benefits package equal to 10% of the $210-million Craig purchase price.

‘Upon approval of this application, CHUM will reinforce Craig’s long-standing commitment to the communities it serves in Alberta and Manitoba,’ said CHUM president and CEO Jay Switzer in his opening remarks. ‘We will ensure that Craig’s over-the-air television stations offer these communities high-quality, locally relevant programming.’

The $21 million, to be invested over seven years, includes:

* $10 million for priority programming mainly from Manitoba and Alberta

* $1 million in new script development

* $500,000 in bridge financing for small producers

* $4.2 million to establish news bureaus in Red Deer and Lethbridge

* $2.6 million for a cross-cultural program set in the Prairies.

But reps from the CFTPA and ACTRA argued that the Toronto station group should pay more, noting that Craig Media is worth $219 million.

CHUM did not include the value of Craig’s three digital outlets – TV Land, MTV Canada and MTV2, which are worth a combined $900,000 – arguing that the rules governing benefits packages, which were laid down in the ’90s, should not apply to the more recent rules for Category 2 digital channels.

‘Digitals came after the 1999 Television Policy,’ says CHUM VP of planning Peter Miller, speaking after the hearings.

The purchase price also does not include Toronto 1, which sold for $46 million in August to two subsidiaries of the Quebecor Media group. CHUM had originally proposed a benefits package of $34.8 million but knocked that figure down when the struggling Craig station sold for less than expected. Its sticker price was $64 million. The sale of T1 must also be approved by the feds, but hearings have not yet been set.

Other groups were generally supportive of the proposed deal, with some conditions. The Directors Guild of Canada and the Writers Guild of Canada also argued that CHUM should pay a higher percentage on the purchase price, 12%, because of the deal’s significance, and that it should earmark more funds for drama and long-form documentaries, for example.

Absorbing Craig will make CHUM one of the largest multi-station groups in the country, adding four conventional stations and the digis to its current roster of eight stations and 18 specialty channels. Over the air, CHUM will reach 85% of English-speaking Canadians.

‘Historically, CHUM has been allowed to underperform in the area of drama because it has not yet attained largest multi-station ownership group status,’ said DGC president Alan Goluboff. ‘Now that CHUM proposed to achieve such status, it should significantly modify its past behavior.’

The CRTC is expected to rule on CHUM’s math and the Craig purchase by the end of the year.

CHUM recently won a new licence for its New VI station in Victoria, BC, which had its licence renewed through August 2009.

-www.chumlimited.com