Objectors eyeing appeal of CanWest/Alliance decision

CanWest Media Works Inc. may have another battle on its hands for control of Alliance Atlantis Broadcasting Inc. The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) says it may appeal the CRTC's December 20 approval of CanWest's acquisition of Alliance Atlantis, which allowed US-based investment bank Goldman Sachs Capital Partners to retain a 65% equity stake."We feel that this is such a significant issue and significant decision that something must be done," says Stephen Waddell, ACTRA's national executive director. "We haven't yet made any decisions with what options we're going to use, but we're looking at various options including an appeal to the Cabinet, or alternately some sort of appeal to the courts of this decision." ACTRA is chiefly concerned with the size of the foreign investment needed for CanWest to complete the purchase. The industry association notes that the Broadcasting Act clearly states "the Canadian broadcasting system shall be effectively owned and controlled by Canadians." The commission concluded, however, that CanWest's 66.7% of the voting shares in the new entity compensated for its 35% overall ownership stake. To further guarantee Canadian control, CanWest responded to some of the commission's concerns by making changes to the proposed governance structure, including quorum requirements, veto rights and liquidity rights. In announcing its decision the CRTC noted it was "satisfied that these changes ensure the broadcasting companies will remain under Canadian control at all times." ACTRA is not so convinced, particularly due to the provision calling for CanWest to assume an investment of more than 50% of the broadcasting entity in 2011. If CanWest doesn't make positive financial headway by then, says Waddell, the broadcaster could fall under foreign ownership entirely. "They could forfeit the whole shooting match to Goldman Sachs," he says. "That's a huge concern not only for ACTRA but for all of us in the cultural industries."Waddell is also concerned about future impacts of this decision. "If this foreign ownership by the backdoor does go through it creates a whole new precedent in the industry for foreign takeover and certainly exceeds the 46% cap that's currently on foreign ownership of broadcasting undertakings," he adds. ACTRA is not alone in this fear. "How the CRTC can count a maybe-provision in 2011 speaks to a regulator prepared to make up the rules as it goes along to suit the wishes of big corporations," said Peter Murdoch, VP media for the Communications, Energy and Paperworkers Union of Canada (CEP), in a press release issued the day after the commission's decision. "Canadian audience and consumers are not being served."In early December a coalition of ACTRA, the CEP and Friends of Canadian Broadcasting released a Harris-Decima poll showing that 66% of Canadians believe the broadcasting and communications sectors are too important to our national security and cultural sovereignty to allow foreign control, and 82% of Canadians agree it is important that the Canadian government work to maintain and build a culture and identity distinct from the United States. "This kind of decision by the CRTC runs counter clearly to public opinion and certainly we are concerned about that and we will be arguing at the CRTC that they proceeded incorrectly," says Waddell. He adds ACTRA has not yet had time to determine whether it will appeal in concert with the CEP, Friends or any other groups. Given past precedent, the success of an appeal seems unlikely. ACTRA has appealed CRTC decisions to the government multiple times, but Cabinet has never returned the decision to the commission. However, last October the federal government did refer the decision to amend the licence of specialty channel Avis de Recherche back to the CRTC for re-examination. Regardless of precedent, Waddell says ACTRA will make its appeal and will continue to petition the commission at upcoming licence renewals. "Canada's private broadcasters should not continue to be let off the hook by the CRTC which is failing to regulate broadcasters and require them to be doing what they should be doing, which is showing at least a portion of Canadian programming in primetime," he says. "We'll be reminding them of the CRTC's obligation to act consistent with the Broadcasting Act."

Objectors eyeing appeal of CanWest/Alliance decision

News | 01/04/2008 4:57 pm EST

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