Canadian journos slam Alliance deal
EmptyTORONTO -- Canada's largest journalist union plans to demonstrate Monday outside regulatory hearings in Ottawa that will consider a bid by Wall Street giant Goldman Sachs & Co. and Canadian partner CanWest Global to acquire 13 cable channels belonging to domestic broadcaster Alliance Atlantis Communications.
"This is foreign ownership through the back door," Peter Murdoch, vp media at the Communications, Energy and Paperworkers Union of Canada, said Friday.
The demonstration is timed to coincide with a public hearing by the Canadian Radio-television and Telecommunications Commision to consider the Alliance Atlantis takeover.
Under a complex ownership structure, Goldman Sachs proposes to hold a one-third voting stake in an Alliance Atlantis/CanWest Global broadcast joint venture, along with a 64% equity interest.
For its part, CanWest Global will emerge with the remaining 36% equity stake in rival AAC, while holding two-thirds of the voting shares in the joint venture to be established with Goldman Sachs.
CanWest Global hopes to convince the CRTC that it will retain effective control of Alliance Atlantis and conform to current foreign ownership restrictions on domestic broadcasters.
But Murdoch said that he expects the CRTC to say no to the takeover deal because Goldman Sachs, as the biggest equity investor in Alliance Atlantis, will be seen as holding the steering wheel.
"You can go through all kinds of investment mumble jumble. But if they (Goldman Sachs) have 64% of the pie, they control it," he argued.
Advocacy group the Council of Canadians agrees, and is urging the CRTC to reject the bid on grounds it will hand control of a major Canadian broadcaster to a U.S. company.
"On paper, the companies have gone to great lengths to meet the technical requirements of Canada's Broadcasting Act which restrict foreign ownership," said Garry Neil, a policy adviser with the Council of Canadians and a former general secretary of actor's union ACTRA. "But if the deal goes through, it will effectively allow a U.S. corporation to own and control two of Canada's largest media companies."
Another possible scenario would have the CRTC order CanWest Global to pony up more equity to get its stake in Alliance Atlantis to 51%, a move Goldman Sachs may not accept.
The CRTC hearings are expected to last two or three days, and a decision on whether to approve the takeover is expected by the end of the year.