CRTC clears MLSE deal, orders increased benefits to sports programming

The CRTC has ordered BCE Inc. and Rogers Communications Inc. to spend $7.5 million over the next seven years to help finance independent sports-related programming, nearly doubling the value of tangible benefits the two companies proposed in their $1.32 billion acquisition of Maple Leaf Sports and Entertainment (MLSE). In December, the two rival telecommunications companies announced a joint bid to purchase a 75 per cent controlling stake in MLSE, which owns the Toronto Maple Leafs and its minor-league affiliate the Toronto Marlies, as well as the Toronto Raptors and Major League Soccer's Toronto FC. Before they could complete that deal, Bell and Rogers were required to obtain the CRTC’s permission to transfer control of the broadcasting licences to operate specialty channels Leafs TV, NBA TV and Gol TV, which are owned by MLSE. In a decision announcing the commission’s approval of the sale Thursday, the CRTC said Bell and Rogers must commit a combined $7.5 million to a new “Sports Production Initiative” the two companies will run that will be “devoted to the development of Canadian sports-themed programming” such as documentaries. The CRTC requires companies purchasing broadcast assets to spend about 10 per cent of the value of those assets on projects and programming that benefit the Canadian broadcasting system. In documents filed with the commission earlier this year, Rogers and Bell said MLSE’s stake in those channels amounted to $51.1 million. At the time, the companies proposed a tangible benefits payout of $3.8 million. In its decision, the CRTC said it recalculated the total value of the broadcasting assets to include debt and outstanding leases, and found their total value to equal $75.6 million. The commission said it adjusted the companies’ tangible benefits requirements to reflect 10 per cent of the recalculated total. “The benefits would be pooled into a single fund to create a critical mass for this initiative and provide a ‘one-stop shopping’ opportunity for the production of high-quality sports-themed programming,” the decision said. “Proposals would be welcomed from producers across Canada, to ensure regional reflection … The entire benefits package would flow to third-party independent Canadian producers.” In their joint-application, Bell and Rogers said they would use the sports production initiative to create programming that the two broadcasters would then acquire the rights to air on the MLSE-owned channels, and on their other programming services. Those other services could include, among others, the Bell-owned CTV network and TSN and RDS sports specialty channels, as well as Rogers’ Citytv network and Sportsnet specialty channel. Scott Henderson, vice-president of communications for Bell Media, said Thursday that the tangible benefits package approved by the commission would be a great benefit to independent Canadian sports programming. Henderson pointed to a similar program the commission approved as part of Bell’s tangible benefits package when it purchased CTVglobemedia in 2011, which he said dedicated “millions” of dollars to producing documentaries about Canadian football in advance of the 100th anniversary of the Grey Cup this fall. He said he was not aware of any other funding initiatives that specifically supported independent sports-related programming. “As far as documentary programming or documentary filmmaking in Canada , this is a huge investment,” he said. Anne Trueman, director of communications for the Canadian Media Production Association (CMPA), said in an emailed statement that her organization was “very pleased” to see the commission increase the value of the tangible benefits package associated with the MLSE sale. “We also are grateful that the applicants realized the need to help finance documentary programming related to sports—and that all of that support will go to independent producers,” she said. In a press release accompanying the commission’s decision, CRTC chairman Jean-Pierre Blais said the commission approved the deal because it was “convinced” it would benefit Canadians by leading to “the creation of new home-grown sports programming.” That release also reminded the two vertically integrated broadcasters that they would have to be prepared to share any sports-themed content developed through the sports production initiative. “he CRTC is committed to ensuring that Canadians have access to a wide choice of programming on different platforms,” the release said. “In 2011, the CRTC prohibited companies from offering television programs on an exclusive basis to their mobile or Internet subscribers. Any program broadcast on television must be made available to competitors under fair and commercially reasonable terms.” The MLSE deal has now received approval from CRTC, the federal Competition Bureau, the NHL, the NBA, the American Hockey League and Major League Soccer. In an emailed statement Thursday, Rogers’ spokeswoman Patricia Trott said the company expects the deal to close “shortly.” nkyonka@thewirereport.ca

CRTC clears MLSE deal, orders increased benefits to sports programming

Broadcast | August 16, 2012

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CRTC clears MLSE deal, orders increased benefits to sports programming

Broadcast | August 16, 2012

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