CTVglobemedia: Size key to competition in future

Defends Chum buy at CRTC hearing

OTTAWA -- Canadian media group CTVglobemedia on Monday faced harsh questioning from Canada's TV watchdog as it seeks approval for a CAN$1.4 billion ($1.23 billion) friendly takeover of rival broadcaster Chum Ltd.

"We believe that in order to compete and survive we must achieve scale," CTVglobemedia CEO Ivan Fecan told Canada's TV regulator, explaining the logic for allowing Chum's stable of terrestial and cable channels to be swallowed by Canada's top-rated broadcaster as both battle YouTube, Facebook.com and other new digital competition for young eyeballs.

But Canadian Radio-television and Telecommunications Commission chairman Konrad Von Finckenstein took aim at CTV's contention that Chum can no longer withstand competition in the emerging digital universe on its own.

"Let's be honest, the Citytv stations are not failing stations. They may not be doing as well as they can, but they are not failing," von Finckenstein said during morning questioning.

CRTC commissioners also questioned CTVglobemedia executives on why they were considered the only worthy buyer by Chum's former owner and why they proposed keeping Chum's Citytv stations, while spinning off Chum's A-Channels to Canadian cablecaster Rogers Communications as part of a separate deal.

"If you kept the A-Channels, you'd have a safer demographic, less of a regulatory hurdle and could off-load programming," CRTC Stuart Langford said.

CTVglobemedia is seeking regulatory approval to keep Chum's Citytv stations in Vancouver, Toronto, Calgary, Edmonton and Winnipeg, which skew toward a younger demographic than the A-Channels.

But to keep the Citytv TV stations, CTVglobemedia requires an exemption from the CRTC to own more than one TV station in any given market.

CTV already has that exemption in Vancouver and Toronto/Hamilton. "You are asking for five," von Finckenstein said, alluding to the three additional major market exemptions CTVglobmedia is requesting.

Responding, Fecan said rival broadcaster CanWest MediaWorks already buys American series for two parallel national TV networks and CTVglobemedia needs to match that competitive threat.

"Unlike CanWest, we don't have the second network to air those shows. The extra programming we buy goes to waste. Thus it doesn't earn money for us or for the Canadian system. This is a lost opportunity," Fecan argued.

The public hearing continues Tuesday with the appearance of interested parties making comment on the acquisition.