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Front Page, Industry News
Shaw’s purchase of CTV stations for $1 each a strategic political move: observers
Monday May 04th 2009TORONTO — A decision by Shaw Communications Inc. to pluck three local TV stations out of the hands of CTV for $1 each has industry observers calling it a strategic political manoeuvre designed to embarrass Canada’s biggest broadcasters.
The move, if it works, will help Shaw persuade the CRTC that the country’s biggest broadcasters are overestimating their financial problems, and that they shouldn’t be given the right to charge special fees to cable companies and other distributors for carrying their TV programs.
The pocket-change purchase will give clout to Shaw’s insistence that the regulator shouldn’t introduce fee-for-carriage charges – a fee which Shaw adamantly opposes – which broadcasters say would keep them from falling deeper into financial strife.
The cable companies say they would likely pass on such fees to consumers, raising the costs of Canadians’ monthly cable TV bills.
And that’s just the start of it.
“The cost to Shaw of doing this is low and the potential benefits are many,” said Duncan Stewart, director of research and analysis at DSam Consulting in Toronto.
If everything goes according to Shaw’s plan, the company will also turn these stations into profitable operations, and appear heroic to the local communities.
The three stations, in Windsor, Wingham, Ont. and Brandon, Man., would join Shaw’s other TV operation, based in Kenora, Ont., which it has said turns out small profits each year.
Of course, that would merely be a bonus, observers say.
“I don’t believe the primary motivation … is that (chief executive Jim Shaw) really wants to run these three TV stations,” Stewart said
“I think he is doing this to embarrass the broadcasters, weaken their argument and put pressure on the CRTC and politicians.”
Shaw Communications, and other cable operators, have been urging the CRTC to ignore pleas from broadcasters like CTV, Canwest and CBC to collect subscriber fees from cable and satellite companies.
The broadcasters say their local TV stations have been slammed by the recession, and that advertising revenues have plummeted to the point that some stations are losing money.
They say if the CRTC lets them charge fees to cable companies, it will help finance the struggling local operations. They argue that’s only fair, given that specialty channels have been allowed to collect fees and have stronger operations because of it.
However, cable companies have said they’ll shuffle that 50 cent monthly fee onto subscriber bills if the CRTC lets it go ahead.
“There’s been this tension between the two,” said Carmi Levy, an analyst at consulting firm AR Communications Inc.
“Now it’s cable’s opportunity to prove that it can make a go of it where conventional television has thus far failed.”
The dispute heated up this week when CTV told the CRTC that it was willing to sell its TV stations in Ontario and a third in Manitoba to the Calgary-based cable operator for $1 each.
CTVglobemedia president Ivan Fecan also said that the time might be right to start regulating cable rates again.
On Friday, Shaw Communications shot back by running a full-page advertisement in the Globe and Mail taking CTV up on the $1 offer.
“We believe television has a bright future,” said Canada’s second-largest cable TV operator, which spun off its former radio and TV assets into a separate company, Corus Entertainment, (TSX:CJR.B) several years ago.
The ad was addressed in letter form to Canadians and drove home the cable operator’s view on fee-for-carriage.
“These broadcasters are threatening to cut local newscasts, cut jobs and close television stations,” Shaw wrote in the letter.
“They are holding you hostage demanding a tax on subscribers as a ransom.”
CTV ran a half-page ad on the opposite page thanking Shaw for “stepping up” to make the purchase.
Canwest is selling its five E! channels which it says are losing money.
However on Friday a representative for Canwest said that a deal hadn’t materialized.
‘We have not heard from them,” said Canwest spokesman John Douglas.
‘It’s interesting that we’ve had a public process to sell our stations – Shaw expressed no interest. But if now they’re prepared to do that, we look forward to receiving an offer from them.”
Jim Shaw and other representatives for the Calgary company didn’t return calls for comment.
The upside of Shaw’s move far outweighs the downside, even if Shaw can’t turn CTV’s three stations into profitable entities, suggested Stewart.
At the worst, if Shaw fails at turning the stations around it could still buy several years of time from the CRTC where it wouldn’t be paying the additional subscriber fees, he said.
Analysts familiar with Shaw also noted that company, with about 10,000 employees, is known for running lean operations, and will probably find a way to turn the small stations into moderately profitable entities.
The deal with CTV is likely subject to due diligence before it can be finalized.
The battle of the broadcasters versus the cable companies is happening as more Canadians shift to watching video on the Internet rather than television, said Kaan Yigit, an analyst at Solutions Research Group.
“Local TV is in such dire straits that they give it away for next to nothing,” he said in an email.
Yigit said the proof can be seen by looking south of the border where major network ABC signed a deal with Internet video provider Hulu to stream its TV content online.
CTV, Global and CBC all stream some of their programs online.
“It’s time to take a closer look at the writing on the wall – smaller over-the-air stations are products of a different era,” he said.
Source: The Canadian Press
Front Page, Industry News
Shaw’s purchase of CTV stations for $1 each a strategic political move: observers
Monday May 04th 2009TORONTO — A decision by Shaw Communications Inc. to pluck three local TV stations out of the hands of CTV for $1 each has industry observers calling it a strategic political manoeuvre designed to embarrass Canada’s biggest broadcasters.
The move, if it works, will help Shaw persuade the CRTC that the country’s biggest broadcasters are overestimating their financial problems, and that they shouldn’t be given the right to charge special fees to cable companies and other distributors for carrying their TV programs.
The pocket-change purchase will give clout to Shaw’s insistence that the regulator shouldn’t introduce fee-for-carriage charges – a fee which Shaw adamantly opposes – which broadcasters say would keep them from falling deeper into financial strife.
The cable companies say they would likely pass on such fees to consumers, raising the costs of Canadians’ monthly cable TV bills.
And that’s just the start of it.
“The cost to Shaw of doing this is low and the potential benefits are many,” said Duncan Stewart, director of research and analysis at DSam Consulting in Toronto.
If everything goes according to Shaw’s plan, the company will also turn these stations into profitable operations, and appear heroic to the local communities.
The three stations, in Windsor, Wingham, Ont. and Brandon, Man., would join Shaw’s other TV operation, based in Kenora, Ont., which it has said turns out small profits each year.
Of course, that would merely be a bonus, observers say.
“I don’t believe the primary motivation … is that (chief executive Jim Shaw) really wants to run these three TV stations,” Stewart said
“I think he is doing this to embarrass the broadcasters, weaken their argument and put pressure on the CRTC and politicians.”
Shaw Communications, and other cable operators, have been urging the CRTC to ignore pleas from broadcasters like CTV, Canwest and CBC to collect subscriber fees from cable and satellite companies.
The broadcasters say their local TV stations have been slammed by the recession, and that advertising revenues have plummeted to the point that some stations are losing money.
They say if the CRTC lets them charge fees to cable companies, it will help finance the struggling local operations. They argue that’s only fair, given that specialty channels have been allowed to collect fees and have stronger operations because of it.
However, cable companies have said they’ll shuffle that 50 cent monthly fee onto subscriber bills if the CRTC lets it go ahead.
“There’s been this tension between the two,” said Carmi Levy, an analyst at consulting firm AR Communications Inc.
“Now it’s cable’s opportunity to prove that it can make a go of it where conventional television has thus far failed.”
The dispute heated up this week when CTV told the CRTC that it was willing to sell its TV stations in Ontario and a third in Manitoba to the Calgary-based cable operator for $1 each.
CTVglobemedia president Ivan Fecan also said that the time might be right to start regulating cable rates again.
On Friday, Shaw Communications shot back by running a full-page advertisement in the Globe and Mail taking CTV up on the $1 offer.
“We believe television has a bright future,” said Canada’s second-largest cable TV operator, which spun off its former radio and TV assets into a separate company, Corus Entertainment, (TSX:CJR.B) several years ago.
The ad was addressed in letter form to Canadians and drove home the cable operator’s view on fee-for-carriage.
“These broadcasters are threatening to cut local newscasts, cut jobs and close television stations,” Shaw wrote in the letter.
“They are holding you hostage demanding a tax on subscribers as a ransom.”
CTV ran a half-page ad on the opposite page thanking Shaw for “stepping up” to make the purchase.
Canwest is selling its five E! channels which it says are losing money.
However on Friday a representative for Canwest said that a deal hadn’t materialized.
‘We have not heard from them,” said Canwest spokesman John Douglas.
‘It’s interesting that we’ve had a public process to sell our stations – Shaw expressed no interest. But if now they’re prepared to do that, we look forward to receiving an offer from them.”
Jim Shaw and other representatives for the Calgary company didn’t return calls for comment.
The upside of Shaw’s move far outweighs the downside, even if Shaw can’t turn CTV’s three stations into profitable entities, suggested Stewart.
At the worst, if Shaw fails at turning the stations around it could still buy several years of time from the CRTC where it wouldn’t be paying the additional subscriber fees, he said.
Analysts familiar with Shaw also noted that company, with about 10,000 employees, is known for running lean operations, and will probably find a way to turn the small stations into moderately profitable entities.
The deal with CTV is likely subject to due diligence before it can be finalized.
The battle of the broadcasters versus the cable companies is happening as more Canadians shift to watching video on the Internet rather than television, said Kaan Yigit, an analyst at Solutions Research Group.
“Local TV is in such dire straits that they give it away for next to nothing,” he said in an email.
Yigit said the proof can be seen by looking south of the border where major network ABC signed a deal with Internet video provider Hulu to stream its TV content online.
CTV, Global and CBC all stream some of their programs online.
“It’s time to take a closer look at the writing on the wall – smaller over-the-air stations are products of a different era,” he said.
Source: The Canadian Press
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Front Page, Industry News
Shaw’s purchase of CTV stations for $1 each a strategic political move: observers
Monday May 04th 2009TORONTO — A decision by Shaw Communications Inc. to pluck three local TV stations out of the hands of CTV for $1 each has industry observers calling it a strategic political manoeuvre designed to embarrass Canada’s biggest broadcasters.
The move, if it works, will help Shaw persuade the CRTC that the country’s biggest broadcasters are overestimating their financial problems, and that they shouldn’t be given the right to charge special fees to cable companies and other distributors for carrying their TV programs.
The pocket-change purchase will give clout to Shaw’s insistence that the regulator shouldn’t introduce fee-for-carriage charges – a fee which Shaw adamantly opposes – which broadcasters say would keep them from falling deeper into financial strife.
The cable companies say they would likely pass on such fees to consumers, raising the costs of Canadians’ monthly cable TV bills.
And that’s just the start of it.
“The cost to Shaw of doing this is low and the potential benefits are many,” said Duncan Stewart, director of research and analysis at DSam Consulting in Toronto.
If everything goes according to Shaw’s plan, the company will also turn these stations into profitable operations, and appear heroic to the local communities.
The three stations, in Windsor, Wingham, Ont. and Brandon, Man., would join Shaw’s other TV operation, based in Kenora, Ont., which it has said turns out small profits each year.
Of course, that would merely be a bonus, observers say.
“I don’t believe the primary motivation … is that (chief executive Jim Shaw) really wants to run these three TV stations,” Stewart said
“I think he is doing this to embarrass the broadcasters, weaken their argument and put pressure on the CRTC and politicians.”
Shaw Communications, and other cable operators, have been urging the CRTC to ignore pleas from broadcasters like CTV, Canwest and CBC to collect subscriber fees from cable and satellite companies.
The broadcasters say their local TV stations have been slammed by the recession, and that advertising revenues have plummeted to the point that some stations are losing money.
They say if the CRTC lets them charge fees to cable companies, it will help finance the struggling local operations. They argue that’s only fair, given that specialty channels have been allowed to collect fees and have stronger operations because of it.
However, cable companies have said they’ll shuffle that 50 cent monthly fee onto subscriber bills if the CRTC lets it go ahead.
“There’s been this tension between the two,” said Carmi Levy, an analyst at consulting firm AR Communications Inc.
“Now it’s cable’s opportunity to prove that it can make a go of it where conventional television has thus far failed.”
The dispute heated up this week when CTV told the CRTC that it was willing to sell its TV stations in Ontario and a third in Manitoba to the Calgary-based cable operator for $1 each.
CTVglobemedia president Ivan Fecan also said that the time might be right to start regulating cable rates again.
On Friday, Shaw Communications shot back by running a full-page advertisement in the Globe and Mail taking CTV up on the $1 offer.
“We believe television has a bright future,” said Canada’s second-largest cable TV operator, which spun off its former radio and TV assets into a separate company, Corus Entertainment, (TSX:CJR.B) several years ago.
The ad was addressed in letter form to Canadians and drove home the cable operator’s view on fee-for-carriage.
“These broadcasters are threatening to cut local newscasts, cut jobs and close television stations,” Shaw wrote in the letter.
“They are holding you hostage demanding a tax on subscribers as a ransom.”
CTV ran a half-page ad on the opposite page thanking Shaw for “stepping up” to make the purchase.
Canwest is selling its five E! channels which it says are losing money.
However on Friday a representative for Canwest said that a deal hadn’t materialized.
‘We have not heard from them,” said Canwest spokesman John Douglas.
‘It’s interesting that we’ve had a public process to sell our stations – Shaw expressed no interest. But if now they’re prepared to do that, we look forward to receiving an offer from them.”
Jim Shaw and other representatives for the Calgary company didn’t return calls for comment.
The upside of Shaw’s move far outweighs the downside, even if Shaw can’t turn CTV’s three stations into profitable entities, suggested Stewart.
At the worst, if Shaw fails at turning the stations around it could still buy several years of time from the CRTC where it wouldn’t be paying the additional subscriber fees, he said.
Analysts familiar with Shaw also noted that company, with about 10,000 employees, is known for running lean operations, and will probably find a way to turn the small stations into moderately profitable entities.
The deal with CTV is likely subject to due diligence before it can be finalized.
The battle of the broadcasters versus the cable companies is happening as more Canadians shift to watching video on the Internet rather than television, said Kaan Yigit, an analyst at Solutions Research Group.
“Local TV is in such dire straits that they give it away for next to nothing,” he said in an email.
Yigit said the proof can be seen by looking south of the border where major network ABC signed a deal with Internet video provider Hulu to stream its TV content online.
CTV, Global and CBC all stream some of their programs online.
“It’s time to take a closer look at the writing on the wall – smaller over-the-air stations are products of a different era,” he said.
Source: The Canadian Press
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