Independent producers emerge as winners in BCE’s successful bid to buy CTV

The CRTC has approved a $140-million gamble by BCE Inc that Canadian television programming can make money, without having to rely on cheap U.S. shows to help subsidize the cost. As part of its approval of BCE’s $2.3-billion purchase of CTV Inc on Dec. 7, the commission threw its support behind the telecom giant’s attempt to create a new economic model for Canadian English-language entertainment programming – one it contends will result in bigger domestic audiences and international sales for homegrown television. CTV and CFTPA to hammer out terms of trade agreementThe CRTC wants CTV Inc. to work with the Canadian Film and Television Production Association (CFTPA) to determine how funding will be doled out under a funding model put forward by BCE Inc., as part of its purchase of the national television network. The two sides are expected to begin drafting a terms of trade agreement early next year. CFTPA president and CEO Elizabeth McDonald says producers are particularly concerned about the possible bundling of Internet rights with broadcast rights over multiple platforms.The lion’s share of BCE’s $230-million benefits package – which the CRTC approved without any changes – is earmarked for television program production, through a combination of licence fees, equity investments and distribution advances. A total of $140 million will be allocated over seven years for 175 hours of new drama, documentary and variety programming, above and beyond what the broadcaster is required to spend as part of its licence commitments. Gary Toth, executive director of the Canadian Television Fund’s licence fee program, says the money will augment financing that is already in the system. "I think having that expanded pie with the BCE-CTV in there is a good thing for the industry. It’s the same as Global having their Western fund…Any funding targets where it would like to focus." The funding model also has the support of the Canadian Film and Television Production Association, the members of which will be the main beneficiaries. BCE had suggested that 80 per cent of the $140 million flow to independent producers. The CRTC upped this commitment to 95 per cent. It defined an independent producer as one in which BCE and any related company own, in aggregate, less than 30 per cent of the equity. "We’re very pleased. It is going to be interesting to see how it rolls out," says Elizabeth McDonald, the CFTPA’s president and CEO. "The CTV didn’t design this (funding proposal) in a vacuum," she adds. "They consulted quite extensively with producers across the country." The CRTC decided to support BCE’s funding model, although it agreed with the company that such a move is both daring and risky. "It is the applicant’s hope that, through this approach, it will be able to demonstrate to other broadcasters that Canadian entertainment programming can be successful and self-sustaining," the commission states in Decision 2000-747. It goes onto note that BCE also acknowledged that "the success it seeks may not be sustainable, but argued that the risk is one worth taking, given the potential return." Rather than direct its money to an independent production fund, as others have done in similar transactions, BCE will spend the money on original programming that will end up on its national network. During the September hearing to review the application, CTV executive VP Trina McQueen stated that setting up an independent production fund would have been the easier route to take. "It would have been very simple, no accusations of self-serving, no responsibility for guaranteeing that the programs will be come back to us to finance the eight hours of priority programming," she told the commission panel.

Independent producers emerge as winners in BCE’s successful bid to buy CTV

Broadcast | 12/21/2000 5:00 am EST

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us