Craig contemplates national expansion in bid to remain competitive with CHUM

Craig Media Inc. president and CEO Drew Craig says that the Canadian market is large enough to sustain four private national broadcasters - Global Television, CTV Inc., CHUM Ltd., and Craig - along with the Canadian Broadcasting Corp. "Absolutely, there is room in the market," he says, as his company prepares for possible expansion. "When you look at the American example, they have five or six networks. Even though Canada has a smaller population base, on a relative basis, the size of the country is irrelevant because you’re still serving large robust markets, and there is definitely room within the Canadian system for that number of players." Craig says that he is willing to put his money where his mouth is and pony up to evolve into a national broadcaster. That’s a strategy that appears CHUM is also embracing, given that it has applied for conventional stations in Edmonton and Calgary with a retransmitter in Red Deer, and two years ago bought Global’s station in Vancouver for $125 million (CCR, April 26/01). When and how Craig Media will expand will depend upon whether CHUM gets new broadcast licences in Edmonton and Calgary. Public hearings on those Alberta markets were held in the summer, and the CRTC decision was made in the middle of October (CCR, June 20/03). But by the time the decision gets written and translated, it probably won’t be made public until January. Craig hints that Vancouver would be the most likely market to tackle first, although there have been rumours that the Calgary-based broadcaster is also eying Montreal and Halifax. "When you look at our grid (compared to CHUM’s), our hole is Vancouver. In the event that they do get licensed (in Alberta), we are going to need to be competitive. We’re going to need to be on a level playing field," Craig tells Canadian Communications Reports. "Because effectively CHUM would have 100% reach of Canada and we would have 40%." Craig notes that with 650,000 Anglophones in Montreal, the market there is still significant and could likely support a new entrant. He is less sure of Halifax, noting, "I don’t think we mentioned Halifax. All we said was that we would need to be competitive with CHUM in terms of reach." Craig also leaves open the possibility of going for some smaller markets, possibly through acquisitions. "We still think there’s a role for small-market television," he says. "If we get a national grid, I think there are some smaller markets we would enter as well. Because once you’ve got the programming and a schedule, relatively speaking it’s cheaper to enter. And all these small markets in Canada are having a tough time making ends meet." Asked if Craig would be able to financially weather entering more markets, given that it has just launched a conventional station in Toronto, is supporting several diginets, and would have a fight in Alberta if CHUM entered, he replies, "absolutely." During the licence hearings in June, Craig was less optimistic, telling the CRTC that it was counting on its revenues from its Alberta channels to subsidize its digital specialty TV channels and its diginets and to a lesser extent its Brandon MB operations. If CHUM is licensed in the Alberta market, Craig hopes to extend its reach into more markets. "We don’t have any definite plans to tell you about. But obviously those are markets (Vancouver and Montreal) that we would like to be in at some point in time," Craig says. He would give no timelines for the possible expansion. "I’m not trying to be evasive, but until we see what the landscape looks like with this impending decision, I can’t give anything definitive," he adds.

Craig contemplates national expansion in bid to remain competitive with CHUM

Broadcast | November 14, 2003

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