Posted: Fri., Jun. 13, 2008, 1:59pm PT

Canadian watchdog bites Remstar

Acquisition of TQS network derailed by CRTC

MONTREAL These are trying times for Maxime and Julien Remillard.

The brothers spent two days in early June at Canadian Radio-Television and Telecommunications Commission hearings into the proposed acquisition of Canuck TV network TQS by their film production company, Remstar.

Their plans for the French-language network were trashed by everyone from provincial politicians to the mayor of Quebec City, and the CRTC commissioners weren't much kinder.

"Let's be frank and honest, we have a lot of problems with your proposal," said CRTC head Konrad von Finckenstein, and that set the tone for the hearing.

In April, Remstar announced it would cut 270 TQS staffers, roughly 60% of the workforce, and virtually eliminate news coverage at the Montreal-based channel.

Not surprisingly, this isn't going over well with the CRTC, given that every general-interest TV network in Canada is forced by CRTC rules to broadcast a minimum amount of local news programming.

The Remillards want the CRTC to make an exception for TQS because -- they claim -- cutting the news department to its bare bones is the only way Remstar can make the network work as a business.

TQS was placed under bankruptcy protection late last year by its previous owner, cabler Cogeco, and it has racked-up a deficit of C$225 million ($221 million) since it began broadcasting in 1986. It lost $18 million last year.

TQS -- whose slogan is Le Mouton Noir (The Black Sheep) -- specializes in low-brow populist fare like the "Big Brother"-esque reality show "Loft Story." But despite of the audience-friendly approach, the network has always finished third in the ratings battle between the three main French-language webs.

Even Quebec's Culture Minister Christine St. Pierre entered the fray, going to the hearings to tell the CRTC commissioners that TQS served an essential newsgathering function for francophone Canadians.

The CRTC also gave the Remillards a tongue-lashing for not being prepared for the hearings. They wondered aloud why the Remstar execs had not done a proper market survey to back up their plan and, worse, had not provided the regulator with full financial information about Remstar itself.

Remstar is one of Canada's leading film producers, with credits including "Battle for Seattle," "Head in the Clouds" and "The Five of Us."

But TQS' fate won't be decided for a few months. The CRTC will have to determine if it will force the network to retain its news programming, which would not be surprising, or if it will take away its license, something few observers expect to see happen.

In other words, stay tuned for next week's episode.


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