Getting Chummy
Already the biggest media outlet in Canada, Bell Globemedia will soon appear before the Canadian Radio-television and Telecommunications Commission with another order to ìsuper-size me.î BGM owns CTV and the Globe and Mail, along with 17 TV specialty channels, including TSN, MTV and the Discovery Channel. On Wednesday, BGM announced it had agreed to pay $1.4 billion for control of national rival CHUM Ltd., which owns 33 radio stations and 12 TV stations, headed by the Citytv channels in Toronto, Vancouver, Calgary, Edmonton and Winnipeg. CHUM also owns 21 specialty TV channels and the Muzak background-music operation in Canada.
Will the CRTC approve the BGM acquisition? Industry observers believe so. It is widely assumed that Canadaís media gatekeeper is about to green-light Torstarís recently proposed 20 per cent purchase of BGM (price: $283 million). This means that very soon, the countryís largest city newspaper (the Toronto Star) and national newspaper (the Globe and Mail), along with Canadaís most-watched TV network (CTV), one of our biggest radio chains, 38 specialty TV channels, and even the guys who select the songs we hear on elevators will all be affiliated.
The proposed acquisition looks to be an excellent move for BGM. The Wall Street Journal recently confirmed a widely held industry belief that advertisers are moving from network television; as an example, General Motors halved its network advertising between 2002 and 2005, spreading promotion dollars to TV specialty channels and the internet. By reducing rival CanWest Global Communications ó which owns Global TV, the National Post and the Southam newspaper chain ó to a speck in its rear-view window, BGM has created, in the parlance of industry annual reports, ìa 21st-century multi-media platformî that can reasonably hope to lock up consumers and advertisers.
The BGM takeover of one of its biggest rivals may not turn out to be a chummy deal for Canadians, however. Wednesday’s announcement came with the grim news that 281 CHUM jobs were to be ìeliminated.î How will the TV channels survive with severely reduced staffs? One CHUM franchise, Ottawaís A-Channel, simultaneously announced the implementation of ìOverdrive Automation,î a system that would introduce wholesale robotic equipment to the newsroom. Thatís great news for the currently unemployed C-3PO and R2-D2, but a bad omen for the journalism industry and TV viewers across the country.
In addition to an inevitable lowering of performance standards for existing CHUM affiliates, the emergence of a super-sized multi-media platform like BGM sucks all the air out of the tank of rivals who simply canít compete with an automated conglomerate offering centrally generated programming. Some North American industry analysts believe that the money simply isnít there for local TV anymore. Indeed, in the United States, where network affiliates experienced a nine per cent loss of revenues in 2005, stations in many cities, including Tampa Bay, Cleveland and Denver, have taken to running dating services and charging guests to appear on morning talk shows.
Here in Canada, there is the added danger of news and programming coming from increasingly monolithic content providers. When approving media mergers, the CRTC inevitably introduces ìfirewallî regulations to make sure businesses keep financial and editorial departments separate. Still, compromises are inevitable within media conglomerates.
If nothing else, their emergence makes a lie out of the adage that bigger is better. Just ask anyone old enough to remember when Winnipeg and Ottawa had two daily newspapers, with Winnipeggers enjoying equal access to the Winnipeg Free Press and Winnipeg Tribune, and Ottawa readers able to choose between the Ottawa Citizen and Ottawa Journal. Then, in 1980, in a widely controversial move that prompted the Kent Commission investigation into media monopolies, the Thomson and Southam news chains simultaneously closed down the Journal and Tribune, allowing the respective chains to feast on the profits of non-competitive markets: Southam took Ottawa, Thomson grabbed Winnipeg. The two businesses were bigger and more profitable as a result of the alleged trade, but both cities seemed somehow diminished. The papers became less vigorous in serving their communities.
Today, it is an accepted wisdom that the Globe and Mail became a better product after the arrival of a second national newspaper, the National Post. As in most businesses, competition is good for the consumer in the news and entertainment industries.
BGMís acquisition of CHUM marks the disappearance of a major competitor in Canadaís shrinking media world. There could be more mergers in the near future. Allan Waters, the founder and chief of CHUM, died in December; the industry is rife with speculation that Canadaís aging, first-generation communication moguls ó including J.R. Shaw of Shaw Communications in Calgary, and, in Central Canada, Ted Rogers of Rogers Communications and the Greenberg family of Astral Media ó face similar estate pressures to put their radio and cable TV empires up for sale.
The manner in which CHUM gutted its operation to attract a buyer also represents a troubling sign for Canadian consumers. It seems apparent that truly local, commercial TV stations may be disappearing, with unique affiliates evolving into transfer points for content shaped elsewhere.
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