Quebecor convergence cross
Publishing group faces conditions to TVA purchase
In addition to demanding as a condition for the greenlight that the company sell some assets and keep its print and TV management structures and newsrooms separate and independent, the Canadian Radio-Television and Telecommunications Commission (CRTC) has also demanded that Quebecor agree that the "tangible benefits" of the package are worth C$48.9 million ($32.3 million), not $23.1 million, as the company proposed. The "tangible benefit" rate is the blood money a company must contribute to the community in return for the deals.
In his report to TVA investors after the decision was issued, CIBC Wood Gundy analyst Adam Shine classified the figure as "a rather overzealous assessment." "It doesn't come as a surprise that the tangible benefits came in higher than was proposed," Shine told Daily Variety, "but they came in materially higher, which from an investment perspective on TVA doesn't necessarily substantiate a significant change to our valuation."
One industry observer noted that the high value of the deal could indicate the CRTC's belief that media cross-ownership commands a premium over and above the value of the transaction; and as such, it needs to be acknowledged -- and perhaps regulated.
Late last week Canada's broadcast regulator approved Quebecor's purchase of broadcaster TVA Group with conditions imposed to protect "a diversity of voices" in the increasingly converged Canadian media. They include the acceptance of a voluntary code of conduct proposed by Quebecor that would keep the print and broadcast divisions separate.
The decision will be watched closely by CanWest Global and Bell Globemedia, two other Canadian heavy hitters that have undergone major cross-media mergers and are awaiting CRTC decisions on their own network licenses for Global Television Network and the CTV Network. Both have said that the cornerstone of their mergers is cooperation and synergies between their news divisions.
