Shaw warns CRTC about Google, Apple TV

Seeking regulatory approval to acquire Canwest

TORONTO -- The new bogeymen in Canadian TV are Google and Apple TV and other U.S. Internet behemoths apparently barrelling north, Canadian cable giant Shaw Communications warned Tuesday.
 
"As we see Google and Apple, the world's not falling, but it's changing fast," Brad Shaw, senior vp of operations at Shaw Communications told the CRTC, Canada's TV watchdog, as he sought regulatory approval Monday for an overall $2 billion deal for Shaw to acquire the TV assets of Canwest Global Communications Corp.
 
Calgary-based Shaw is looking to take Canwest Global's TV business out of creditor protection, but also purchase Goldman Sachs and Co.'s stake in 13 lucrative cable channels for around $700 million.
 
Shaw last February first proposed to secure a controlling stake in Canwest Global to help recapitalize the media group, but opted for an outright acquisition after it faced a knock-down legal battle with Goldman Sachs.
 
And Shaw is also looking to pay another $440 million to U.S. bondholders that, along with Goldman Sachs, have controlled Canwest Global through its voluntary bankruptcy proceedings and will exit the Canadian market if the CRTC approves the transaction.
 
To secure that greenlight, Shaw executives raised the spectre of Google and Apple, and restoring 100% Canadian control of Canwest Global, to convince the CRTC to ignore the risk of anti-competitive behavior should the takeover of the domestic TV assets by the cable giant go through.
 
"Industry changes are dramatic and happening at breakneck speed. This (transaction) is critical to maintaining our competitive position," Jim Shaw Jr., CEO of Shaw Communications, told the CRTC hearings.
 
Shaw's play for Canwest Global's TV assets comes as the wider Canadian TV industry faces increased competition from Netflix, Apple TV and other emerging digital platforms.
 
Netflix topper Reed Hastings will be in Toronto on Wednesday to launch Netflix Canada, the online video/DVD distributor's first foray outside of the U.S. Market (HR, Sept 20).
 
Canwest Global interim president Peter Viner urged the CRTC to approve the takeover deal and end a court-directed creditor protection process that has severely hand-cuffed the domestic TV network.
 
Viner said major U.S. studios demanded stand-by letters of credit to enable Canwest Global to continue receiving U.S. network series for its primetime schedule, local productions have been put on hold and employee morale plunged.
 
"Our emergence from creditor protection is a matter of national interest," Viner said.
 
The CRTC will rule on the Shaw/Canwest Global deal in around 35 days.
 
The regulator also faces a separate $3.2 billion deal by phone giant BCE Inc. for domestic network CTV as the Internet and other emerging digital platforms continues to reshape the Canadian broadcast system.
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