Canadian TV Industry Consolidation Unleashes a Wall Of Money

7:21 AM PST 07/10/2012 by Etan Vlessing
ABC

A report indicates local producers are receiving a big payout after the CRTC ordered acquisitive networks to invest in homegrown dramas to improve the broadcast system.

TORONTO – The money is flowing in Canada after a recent spate of media consolidation.

A report by Ottawa consultant Boon Dog Professional Services on Tuesday said Canadian broadcasters spent a combined $51 million on so-called tangible public benefits in the year to August 31, 2011, with much of that going into new indie production.

That financial backing for local TV producers came courtesy of the CRTC, the country’s TV watchdog, which orders broadcasters to pay 10% of transaction costs associated with an acquisition to improve the Canadian broadcast system.

And there’s been a lot of transactions of late, including Shaw Communications’s 2010 purchase of Canwest Global Communications Corp, which produced a $180 million benefits package, and Bell Canada’s acquisition of CTV Globemedia in 2011 and its $239 million benefits package.

And Bell Canada more recently purchased Astral Media for $3.38 billion, heralding another $300 million-plus benefit package to come after the CRTC approves the deal.

In all, Boon Dog is tracking 18 benefits packages amounting to around $965 million in spending commitments, of which around $397 million was spent by August 31, 2011.

That leaves another $569 million to be spent by August 31, 2019, with much of that wall of money going towards local primetime TV production.

Before the current wave of industry consolidation, spending on homegrown dramas by domestic broadcasters was down, in response to the 2008-09 economic recession and its impact on TV ad revenue.

But CRTC spending obligations after a series of industry mergers and acquisitions has pushed up investment in indie production expected over the next seven years, or over the life of the current broadcast license terms.

And much of that TV programming output will find its way into the international market, where popular Canadian-made TV shows like Rookie Blue and Flashpoint are sold widely.

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