Historia, Series+ sale blocked in surprise move

The Competition Bureau has blocked the $200 million sale of the Historia and Series+ channels from Corus Entertainment Inc. to BCE Inc., saying that the reasons that led the bureau to force Bell to divest the channels in the first place were still valid. “The Bureau’s review determined that it would not be appropriate for the Commissioner to approve the transaction since the competitive circumstances that led to the consent agreement have not materially changed to the point where the remedy is no longer required,” said Competition Bureau spokesman Jayme Albert in an emailed statement. The bureau informed the companies of its decision Friday, which Corus announced Monday. Bell was originally ordered to divest the specialty channels as one of the conditions imposed by the Competition Bureau to address concerns about Bell's market power as part of its purchase of Astral Media Inc. in 2013. Bell moved to reacquire the channels in October last year, arguing that the competitive space had changed enough with the growth of over-the-top (OTT) services. In a consultation with the CRTC earlier this month, Bell pointed to not only American OTT giant Netflix Inc., but also Quebecor Inc.’s Videotron OTT service Club Illico, as “disrupting the overall subscriber market." In 2013, Bell was told it could not acquire the channels again within the next 10 years without written approval. In addition to the Competition Bureau approval, the current deal would also have needed the approval of the CRTC. Corus told The Wire Report in an emailed comment that it was working with Bell to determine further course of action. It couldn’t say if it was going to appeal the determination until after that internal review wrapped up, according to Jaclyn Atwood-Powell, the director of publicity at Corus. Analysts had anticipated the deal would be to be approved when it was announced last year. “This news comes as a bit of a surprise, as we expected that a changing media landscape would see the regulators approve the deal and allow it to close by mid-summer,” wrote National Bank analyst Adam Shine in a Monday note. Barclays analyst Phillip Huang also found the Competition Bureau’s decision to not “consider including non-linear viewers in the determination of market share” unexpected, he said in his note Monday. The two companies have a couple of options to proceed, said the analysts. While they could turn to a tribunal to hash out a deal more in line with the Bureau’s expectations, Corus could also look to sell the channels to another operator. Although that would be “perhaps at a potentially slightly reduced price,” wrote Shine. Aravinda Galappatthige, analyst for Canaccord Genuity, wrote in a note that he felt it was unlikely Corus would find many other suitors for the channels. According to Carleton University professor Dwayne Winseck, the competition regulator made the right call. “With only a few years having passed, the attempt to reacquire two services had been recently required to divest was another example of its hubris,” Winseck told The Wire Report in an email. “If Corus wants to dispose of the services, that's its choice but if so, the opportunity presents itself for smaller entities to acquire Series+ and Historia.” — With reporting by Bryson Masse at bmasse@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Historia, Series+ sale blocked in surprise move

Broadcast | May 28, 2018

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Historia, Series+ sale blocked in surprise move

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