French-language TV network V a logical acquisition for Bell, experts say

French-language TV network V Interactions Inc. would be a logical acquisition for BCE Inc., experts say. “Considering that over 50 per cent of their market share is probably in Quebec. They're going to need French-language content,” Richard Paradis, president of consulting firm Groupe CIC and an instructor in the Université de Montréal's communications department, said in an interview. In mid-February, several news reports emerged in the Quebec media saying that Bell is interested in acquiring the V Interactions network. The network is comprised of six television stations in Montreal, Quebec City, Saguenay, Trois-Rivières, the Estrie region of Quebec, and Toronto. It is a division of Remstar Corp., which also operates film division Remstar Films. On Feb. 15, the Argent news service, owned by Bell rival Quebecor Media Inc., reported that Bell and V had entered discussions but that no agreement had been reached. Denis Durand, a partner at investment counselling firm Jarislowsky Fraser Ltd., told Argent at the time that it would be “illusory” to believe Bell wouldn't be interested in the network, arguing that owning V would help Bell compete against Quebecor in the Quebec market. Paradis said Bell has already shown it's seeking to expand its content portfolio with its acquisition of CTVglobemedia Inc. As part of the CTV acquisition, Bell will be acquiring control of French-language sports station RDS. Paradis said that given Bell's stake in the Quebec market, it will be important for the company to have content to offer its French-language customer base. Maher Yaghi, an industry analyst with Desjardins Securities, said by phone that he could not comment on news reports that Bell was courting V. But strategically, he said, the purchase would make sense at the right price. Yaghi said the French-language market is important for Bell but acquiring V may not be a differentiating factor for the company, which is in the process of expanding its content portfolio with its acquisition of CTV. Paradis said Bell could acquire V for “pocket change” compared to what it is paying for CTV. “It could be a French-language network that they could get for a very small injection of money, and in many ways they could influence the orientation of the network to meet their needs,” he said. “They've got deep enough pockets that they could do a fairly good job at repositioning V in the French-language market.” Remstar purchased the V network in 2008 from Cogeco Inc. and CTV. At the time, the network, then called TQS, was bankrupt and owed its creditors about $60 million. It was reported the network was losing $20 million a year. TQS had been in a precarious financial situation since the early 1990s, and the Quebec Superior Court granted it creditor protection under the Companies' Creditors Arrangement Act in late 2007. According to the CRTC's aggregate annual returns for 2010, V lost about $4.4 million in the 2009-2010 broadcast year. Paradis said the network is now spending about $20 million a year on programming to try to turn things around. “But obviously they'd be in a better position if they had a bigger financial backer, like BCE,” he said. Paradis said V could also be an attractive acquisition for Bell because the network is eyeing specialty television services. In April 2010, the CRTC approved a V specialty station called Génération V that would almost entirely be devoted to user-generated content. The commission followed the decision up in February by approving a service called Pure TV that would be devoted to health-related programming. The company is also waiting for approval of licence applications for two more channels called Bella and V-MAX. The former would resemble specialty service W; the latter would target a male audience with comedy, sports, action, suspense and mystery content. Although Bell has not confirmed reports that it is interested in V, Mirko Bibic, Bell's senior vice-president of government and regulatory affairs, told Argent in December that it is interested in expanding its French-language content and would not make any purchases until the CTVglobemedia acquisition is finalized. V spokesman Tim Ringuette told Argent that the network was not for sale at that time. Ringuette added that the network plans to be profitable later this year. Jacqueline Michelis, a spokeswoman for Bell, said by email Thursday that the company does not comment on rumours. “We offer lots of French content and are certainly interested in offering more, as we’ve shown with our content deals with SRC , Astral and others,” she said. V did not comment Thursday. Some observers have suggested that Bell may be interested in V in part to acquire a platform to broadcast hockey games from a new Quebec NHL team. Pierre Karl Péladeau, president and CEO of Quebecor, has said he intends to try to draw an NHL hockey team to Quebec City. On March 1, Quebecor confirmed that it will be a private partner in and help manage a future stadium in Quebec City, to which it will have the naming rights. In mid-February, several news reports in the French-language media suggested that Bell had also expressed an interest in managing the stadium, arguing that move would give Bell more influence in the French-language market. But Paradis said acquiring the stadium would have been an unnecessary purchase for Bell. The company already has the naming rights to the Bell Centre in Montreal, which attracts provincial attention thanks to the Montreal Canadiens. Bell is also a major investor in the team. “It would have been stretching themselves to be more or less in the same market and try to get two major forums and also own two national hockey teams,” he said. “If you look at it from a financial point of view, there isn't much interest for it.” kfournier@thewirereport.ca

French-language TV network V a logical acquisition for Bell, experts say

Broadcast | March 3, 2011

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

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

French-language TV network V a logical acquisition for Bell, experts say

Broadcast | March 3, 2011

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

FREE TRIAL

SUBSCRIBE

Q&A: National Film Board chair wants her organization’s productions to air on CBC

Profitability rises despite revenue decline as Corus navigates advertising slump

LeBlanc ‘reassured’ audiovisual groups that cultural exemption won’t be part of CUSMA review: sources

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us