Paperworkers' union may appeal CRTC ruling on Alliance Atlantis by Steve Rennie
Source : Canadian Press
December 22, 2007
OTTAWA _ Canada's largest media union may appeal a ruling by the federal broadcast regulator that gave the go-ahead to a $2.3-billion takeover of one of the country's top entertainment companies by CanWest Global Communications (TSX:CGS), with a substantial investment from Wall Street.
The Communications, Energy and Paperworkers union of Canada said Friday the CRTC's decision on CanWest's acquisition of Alliance Atlantis Communications (TSX:ACC.B) skirts foreign ownership restrictions since Goldman Sachs (NYSE:GS) is putting up most of the money for the deal.
"I just don't know of any other companies where those people that are holding the equity aren't going to have any kind of serious influence on the direction of the company, particularly if the company finds itself in any sort of difficulty," said Peter Murdoch, the union's vice-president of media.
"Once you invest in something, you want to make sure that that company is going to return on your investment."
Murdoch said the union plans to decide early in the new year whether to appeal the decision.
The nationalist Council of Canadians also said Friday it's considering joining an appeal of the CRTC's ruling.
"The council normally doesn't get involved in that sort of thing, although it's a possibility for us this time because we feel so strongly about the issue," said council board member Garry Neil.
Two avenues of appeal could be the federal cabinet or the Federal Court of Canada. There is a 90-day window under the Broadcasting Act in which to launch a petition to cabinet.
Cabinet has in the past been open to appeals on CRTC rulings.
Cabinet instructed the CRTC in May 2006 to reconsider a controversial policy framework for voice-over-Internet-phone services. Although the federal regulator ended up sticking to its decision, it agreed to take another look at the broader issue of regulations that restrict former monopolies such as Bell Canada (TSX:BCE).
University of Ottawa law professor Philippa Lawson said there's nothing stopping anyone from petitioning cabinet to order the CRTC to reconsider its ruling.
"It's a political issue," she said. "You just have to make a policy argument."
Domestic control of Canadian broadcast companies is required under federal broadcasting rules.
Unions and special-interest groups had opposed the deal out of worry that Goldman Sachs would pull the strings since it put up 64 per cent of the money to finance the takeover by CanWest.
During a two-day hearing last month, the CRTC challenged CanWest to ensure it will retain control of Alliance Atlantis despite its minority stake.
The regulator said Thursday it was satisfied CanWest would still control Alliance Atlantis through a majority of the voting shares.
Goldman Sachs gets one-third of the voting shares and 64 per cent of the equity in the acquired broadcaster, including Alliance Atlantis's half-interest in the popular CSI television franchise.
CanWest acquires Alliance Atlantis's 13 specialty channels, which include Showcase and HGTV, and will likely result in more cross-promotions on the various TV properties and bulk buying of programs.
The CRTC decision reduces some of the uncertainty about CanWest's future.
CanWest CEO Leonard Asper told the commission during public hearings that the Winnipeg-based company needs the specialty channels to help offset a decline in advertising revenue at its Global conventional TV network.
CanWest shares gained ground Friday, rising 44 cents or 6.96 per cent to $6.76 on the Toronto Stock Exchange. They're still down sharply from a year ago when they closed at $11.12.
© Canadian Press
The Communications, Energy and Paperworkers union of Canada said Friday the CRTC's decision on CanWest's acquisition of Alliance Atlantis Communications (TSX:ACC.B) skirts foreign ownership restrictions since Goldman Sachs (NYSE:GS) is putting up most of the money for the deal.
"I just don't know of any other companies where those people that are holding the equity aren't going to have any kind of serious influence on the direction of the company, particularly if the company finds itself in any sort of difficulty," said Peter Murdoch, the union's vice-president of media.
"Once you invest in something, you want to make sure that that company is going to return on your investment."
Murdoch said the union plans to decide early in the new year whether to appeal the decision.
The nationalist Council of Canadians also said Friday it's considering joining an appeal of the CRTC's ruling.
"The council normally doesn't get involved in that sort of thing, although it's a possibility for us this time because we feel so strongly about the issue," said council board member Garry Neil.
Two avenues of appeal could be the federal cabinet or the Federal Court of Canada. There is a 90-day window under the Broadcasting Act in which to launch a petition to cabinet.
Cabinet has in the past been open to appeals on CRTC rulings.
Cabinet instructed the CRTC in May 2006 to reconsider a controversial policy framework for voice-over-Internet-phone services. Although the federal regulator ended up sticking to its decision, it agreed to take another look at the broader issue of regulations that restrict former monopolies such as Bell Canada (TSX:BCE).
University of Ottawa law professor Philippa Lawson said there's nothing stopping anyone from petitioning cabinet to order the CRTC to reconsider its ruling.
"It's a political issue," she said. "You just have to make a policy argument."
Domestic control of Canadian broadcast companies is required under federal broadcasting rules.
Unions and special-interest groups had opposed the deal out of worry that Goldman Sachs would pull the strings since it put up 64 per cent of the money to finance the takeover by CanWest.
During a two-day hearing last month, the CRTC challenged CanWest to ensure it will retain control of Alliance Atlantis despite its minority stake.
The regulator said Thursday it was satisfied CanWest would still control Alliance Atlantis through a majority of the voting shares.
Goldman Sachs gets one-third of the voting shares and 64 per cent of the equity in the acquired broadcaster, including Alliance Atlantis's half-interest in the popular CSI television franchise.
CanWest acquires Alliance Atlantis's 13 specialty channels, which include Showcase and HGTV, and will likely result in more cross-promotions on the various TV properties and bulk buying of programs.
The CRTC decision reduces some of the uncertainty about CanWest's future.
CanWest CEO Leonard Asper told the commission during public hearings that the Winnipeg-based company needs the specialty channels to help offset a decline in advertising revenue at its Global conventional TV network.
CanWest shares gained ground Friday, rising 44 cents or 6.96 per cent to $6.76 on the Toronto Stock Exchange. They're still down sharply from a year ago when they closed at $11.12.
© Canadian Press
Related Documents:
December 31, 2007 - Podcast - Keep it Canadian Event
Video presentation of an event in Calgary, AB on Dec 5, 2007 to keep the ownership of Canadian media in Canadian hands.
December 5, 2007 - News Release - National security & cultural sovereignty trump foreign ownership of Canadian media - Keep it Canadian
Poll results show that most voters believe broadcasting and communications are too important to national security and cultural sovereignty to allow foreign control of Canadian media companies.
December 5, 2007 - Opinion Poll - National security & cultural sovereignty trump foreign ownership of Canadian media - Keep it Canadian
Poll results show that most voters believe broadcasting and communications are too important to national security and cultural sovereignty to allow foreign control of Canadian media companies.
Video presentation of an event in Calgary, AB on Dec 5, 2007 to keep the ownership of Canadian media in Canadian hands.
December 5, 2007 - News Release - National security & cultural sovereignty trump foreign ownership of Canadian media - Keep it Canadian
Poll results show that most voters believe broadcasting and communications are too important to national security and cultural sovereignty to allow foreign control of Canadian media companies.
December 5, 2007 - Opinion Poll - National security & cultural sovereignty trump foreign ownership of Canadian media - Keep it Canadian
Poll results show that most voters believe broadcasting and communications are too important to national security and cultural sovereignty to allow foreign control of Canadian media companies.
