Citytv cannot become national without Montreal anglophone market, Rogers tells CRTC

GATINEAU, Que.—Rogers Communications Inc.'s $10.3 million acquisition of Montreal ethnic TV station CJNT-DT and its conversion to an English-language station is necessary to the company's plan to grow its Citytv stations into Canada's third national broadcasting network, the company said. Keith Pelley, president of the company's Rogers Media division, said at a CRTC hearing Wednesday that Rogers' Citytv needs access to key national English-language markets such as Montreal, Que. The company has reached a deal to purchase CJNT-DT, or Metro 14 Montreal, from Channel Zero Inc. “To offer Canadians a third network choice, we need to expand and we need to expand quickly,” Pelley said. He said the acquisition would help Rogers tap into national advertising revenues, which are not accessible without a national market presence. Citytv’s “limited reach” has shut out Rogers from national network advertising buys, which total $1 billion or 50 per cent of conventional TV revenues in Canada, he said. “During Canada’s Got Talent, despite significant and innovative sales efforts, we simply could not generate enough revenues for a production of that size, because we were not in key markets,” Pelley said. He said “several” national advertising clients told Rogers they would not buy time on the program because it did not have national distribution. At the hearing, CRTC chair Jean-Pierre Blais said it is Rogers' responsibility to show the commission that the acquisition will benefit Canadians. “The commission has been quite clear with that,” Blais said, referring indirectly to the CRTC's decision last month to block BCE Inc.'s $3.38 billion acquisition of Astral Media Inc. Pelley told commissioners the acquisition would benefit Canadians by serving Montreal’s anglophone market, which is not currently served by a lifestyle television station. He said Citytv’s Breakfast Television would be the “only show of its kind” offering English-speaking Montreal audiences news, weather, and traffic content. Pelley said the acquisition would create 30 new jobs in Montreal, with 27 to 28 of them directly related to Breakfast Television. Pelley said Rogers would also launch Connected Montreal, a show covering professional, amateur, university, college and junior league sports in the area. Pending an approval of the acquisition, Rogers said it would build a new studio in downtown Montreal where Breakfast Television would broadcast five days a week. The studio would create 15.5 hours of original, local programming for anglophone viewers, he said. Scott Moore, president of Rogers Broadcasting, said the new station would give a voice to anglophone Montrealers who now only see themselves on local Montreal television “if they were involved in a car accident or a murder.” Rogers said it would not venture into an evening newscast with the station because the market is “saturated” and dominated by competitors like BCE's CTV and Shaw Communications Inc.'s Global Television. When asked by commissioner Lamarre whether Rogers would accept an evening newscast as a condition of licence, Pelley said: “Unfortunately, no.” With the new station in Montreal, Pelley said, Rogers would be fourth in the market in news but first in local, original programming. “We would be more inclined to create a daytime show like Cityline rather than enter a saturated market like evening news,” Pelley said. As part of the transaction, Rogers has proposed benefits of $1.03 million to support the Canadian broadcasting system, which would go to support Channel/Canal International (ICI), a new ethnic programming service in Montreal. In a separate application to the CRTC, numbered company 4517466 Canada Inc. submitted that ICI would fill the role of CJNT in the ethnic market. The company applied to provide programming on ICI in 15 languages serving 18 different communities, including Italian, Greek, Arabic, Chinese and Hindi-speaking communities in Montreal. Blais said Rogers appears to be taking a “back door” entry into the national conventional network market. The chair questioned why Rogers, rather than acquiring CJNT, did not apply for a new licence to enter the national conventional television market. In June, the CRTC approved Rogers’ $3-million acquisition of educational television service Saskatchewan Communications Network (SCN) from Bluepoint Investments Inc. The company will use the station to expand its Citytv network. The Citytv network currently has local stations in Toronto, Vancouver, Winnipeg, and Calgary. In response to Blais, Pelley said Rogers realized it could not generate the necessary revenues to support high-scale programs when it launched Canada’s Got Talent in March. It then sought to “quickly” move into the national conventional television market, he said. Pelley said speed is a factor in the company’s decision and that it could not wait for a full licence proceeding, which could take up to two years. “So, in a sense it’s not a back door entry,” Blais said. “It’s a side door entry and there’s nobody ringing a doorbell to come through the front.” Rogers said the acquisition would allow the company to become a national player with $17 million in new revenues, or an increase of five per cent. “This acquisition represents a key step in implementing our strategy to expand Citytv’s reach and establish a third competitive private network in Canada,” Pelley said. “Citytv cannot be a national television network without the Montreal market.” Rogers is seeking the same licence conditions for its Montreal station that it now holds for other Citytv stations. Pelley said if some licence conditions for CJNT are not lifted by the commission, Rogers would walk away from the deal. A CRTC official told reporters at the hearing Wednesday that a decision on the transaction can be expected within the next 35 days or before the end of the year. dgrenier@thewirereport.ca

Citytv cannot become national without Montreal anglophone market, Rogers tells CRTC

News | 11/07/2012 8:44 pm EST

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