Ladies and gentlemen, start your analogies

How many ways can you say a foreign majority owner will inevitably exert control over the operation of a Canadian broadcasting entity? At this week's CRTC hearing into CanWest MediaWorks Inc.'s acquisition of Alliance Atlantis Communications Inc., commissioners and interveners got creative - no one more so than omnipresent Fasken Martineau DuMoulin lawyer Robert Buchan. Leonard Katz, CRTC vice-chairman, telecommunications: It's always easy when you are first getting married...my wife may not agree with me. You always want to contemplate what happens if you have to get to the divorce stage as well when you get involved with another partner. So I think it's important to understand these issues beforehand as well. Grey areas sound great. Two partners feel the same way about things as well until the rubber meets the road... Richard Leipsic, CanWest's senior VP and general counsel: ...I think the notion of huge changes that are going to make the definition of ordinary course difficult to comprehend or interpret in a span of three or four years are not going to be difficult ones. I would agree with you that ordinary course over the span of a marriage of 20 to 30 years might be more difficult. But I don't think in this context, with all due regard, the analogy is necessarily completely appropriate.Buchan, on Monday as legal counsel for the Directors Guild of Canada: We have looked to an analogy...and I don't know, it's not maybe a very clever analogy, but the cleverest one that I can think of is an ocean liner leaving New York and coming out of the Hudson River and the captain being told "You have to get to Southampton. You have to get there in four days, and you have to get there with the tanks half full. You can go whatever way you want to go to get across there, but if you go down to Bermuda or you go over to the Azores you are not going to get there in four days and your tanks aren't going to be half full. So you can tick or tack or whatever you have to do depending on the winds in the short term, but you better be there in four days." That is basically the situation that we think CanWest is in now with Goldman Sachs and reliance on foreign capital at 64%.Buchan, on Tuesday as legal counsel for the Alliance of Canadian Cinema, Television and Radio Artists: ...these complex arrangements have been put in place and they're not complex just for the sake of being complex, they're complex because you're dealing with the most successful, sophisticated investment bank in the world, you know, 20,000 employees, they know what they're doing and they're assured that in 2011 they're going to get their guaranteed rate of return....We feel it's a bit like Gulliver in the Land of the Lilliputians, that CanWest is tied down and they can maybe blink their eyes and move around if that's operational control in the short term, but to get to where they want to be in 2011, to get themselves back to 50% or more of the issued equity of the company, they've got very little room for manoeuvre.Maureen Parker, executive director of the Writers Guild of Canada: Because CanWest needed this deal very badly, it agreed to onerous conditions as the price of the Goldman Sachs financing....The way we see it is like this. I have a partner who loves to shop. In order to stop bickering about this, we need a deal. At the end of the year, if he saved $10,000 and had not increased his line of credit, I would agree to buy him an HD flat-screen TV. However, he still has household responsibilities, one of which is paying for groceries. The only way he can get his flat screen and meet his obligations is if he stops buying his suits at Hugo Boss and feeds us spaghetti every night instead of filet mignon. So you can see that while I am not specifically dictating what he can buy, I am influencing what he can buy, and there's the rub.

Ladies and gentlemen, start your analogies

Broadcast | November 23, 2007

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