TORONTO, Dec. 6 /CNW Telbec/ – At its 2006 Annual General Meeting of Shareholders, Astral Media Inc. (TSX: ACM. A/ACM. B) announced an increase of 33% to its annual dividend, from 30 to 40 cents per share. The Company also announced a renewal of its normal course issuer bid to repurchase up to 5% of its Class A and Class B Shares.
"Fiscal 2006 was an excellent year for Astral Media and we are pleased to be announcing yet another increase to our dividend and a renewal of the Company’s normal course issuer bid," said Ian Greenberg, President and CEO.
"Our success is the result of the ongoing dedication and drive of our 1,800 employees, of a sound business model, and of our continued strategic discipline."
During the course of his presentation, Mr. Greenberg also described the company’s new business ambition: Using multiple media platforms, Astral Media will deliver to all Canadians choice of targeted content when they want it.
This new business ambition is an extension of the Company’s strategy and the strong Astral Media brand developed over time, while reflecting the current challenges and opportunities in our changing technological and business environment.
"The media industry is one of the most exciting and challenging there is," continued Mr. Greenberg. "And, over the past decades, Canada’s statesmen,public servants and entrepreneurs have designed a distinctive framework to meet the unique challenges that Canadians face as neighbours of the most powerful media industry in the world. I am proud that we at Astral Media have been, and still are, a significant part of that endeavour."
Mr. Greenberg also took the opportunity to review certain issues in the Canadian broadcasting system: Public Financing Framework for Canadian television programming Mr. Greenberg highlighted the need for consistent and reliable funding for Canadian independent producers with contributions from both private and public sources. He underlined the fact that the film and television industry contributes significantly to the overall Canadian economy, and that it is one of the fastest growing economic sectors in Canada. While private sector partners have steadily increased their contributions to the Canadian Television Fund, the federal government has been somewhat unpredictable in this regard. Mr. Greenberg called for a stable public financing framework that matches the long-term planning horizon of Canadian producers.
Foreign Ownership Rules
The recent Telecommunication policy report could allow for the liberalization of foreign ownership rules for Broadcast Distribution Undertakings (BDUs). Mr. Greenberg, in his speech, called for caution in this regard, recommending the need for structural separation and a ban on cross-ownership to prevent foreign controlling interests in a Canadian BDU from owning any interest in a Canadian programming company. Mr. Greenberg suggested that unchecked, liberalization of BDU foreign ownership has the potential of threatening billions of value-added dollars in the Canadian economy, as well as tens of thousands of jobs. He maintained that foreign ownership rules for BDUs should be liberalized only if additional rules of conduct are formulated to offset any potential impact on cultural content.
"Canada must not allow foreign ownership of BDUs to be the Trojan horse that will destroy the wealth of our culturally distinct broadcasting system that has taken decades to build," indicated Mr. Greenberg. Review of Regulatory Framework for OTA Lastly, Mr. Greenberg reviewed the Company’s stance on the current review of the regulatory framework for over-the-air (OTA) television. Mr. Greenberg argued that while the payment of a subscriber fee to OTAs was being requested as a way to increase their profitability and therefore OTA contributions to the production, acquisition and broadcast of high-quality Canadian programming, this could only occur if the amounts paid to the OTA broadcasters were additions to the present subscriber fees paid to BDUs and not at the expense of specialty services. He indicated that specialty broadcasters dedicated 37% of their revenues to Canadian programming in 2005, compared to 27% for Canadian OTA broadcasters. So for every $100 in revenue transferred from specialty to OTA broadcasters, the system as a whole would see a loss of $10 in spending devoted to Canadian programs.
"It is important that regulators take into account the potential impact of any changes to the subscription fee
structure on all broadcasters, including Canadian pay and specialty television services and radio operators. Robbing Peter to pay Paul is not going to benefit the Canadian broadcasting system as a whole. And in the end, it is not a recipe that will benefit the Canadian viewer," concluded Mr. Greenberg.
With regards to the normal course issuer bid, the Company intends to purchase for cancellation, through the facilities of the Toronto Stock Exchange, up to 2,486,062, Class A Shares and up to 154,741 Class B Shares.
This represents no more than 5% of the 49,721,247 issued and outstanding Class A Shares as at November 30, 2006 and no more than 5% of the 3,094,822 issued and outstanding Class B Shares as at November 30, 2006. The shares will be purchased for cancellation in accordance with applicable regulations of the Toronto Stock Exchange over a maximum period of 12 months beginning on December 13, 2006 and ending on December 12, 2007. The Company believes that the purchase of the Class A Shares and Class B Shares is an economically worthwhile use by the Company of its funds and is in the best interest of the Company and its shareholders. The Company has purchased 2,312,200 of its Class A Shares at an average price of $34.66 per share and none of its Class B Shares from December 13, 2005 to December 5, 2006 under the currently outstanding normal course issuer bid which expires on December 12, 2006.