VANCOUVER – Like members of the Hogwarts School of Witchcraft and Wizardry, Tuesday’s group of financial analysts dared not speak the name of the biggest incomplete deal in the room.
Just like Harry Potter’s friends don’t like to say "Voldemort", the financial analyst members of the panel session at the Canadian Association of Broadcasters convention entitled "The Word from the Street" were asked in advance not to talk about the Bell Globemedia deal to purchase CHUM Ltd., which has not yet been ruled upon by the Commission.
Last we checked, BGM hadn’t yet even submitted an application to the CRTC to approve the purchase. And during the convention, only CTV president Rick Brace was permitted to speak on any panel.
All that aside, five analysts who cover the industry were generally bullish on the industry’s future, agreeing that broadcasters have the size and abilities which make them uniquely positioned to be the primary content aggregators for consumers in our new, on demand world. They had these things to say about the media climate in Canada.
On mergers and acquisitions:
David McFadgen, Sprott Securities: "We all know there are lots of buyers and very few sellers."
Andrea Horan, Genuity Capital Markets: "There are no more large all-cash, significant premium deals out there… Mergers are more likely."
On foreign content purchasing for the fall TV season:
Horan: "(Broadcasters) are now competing with their distribution channels for programming, and that’s dangerous. You need to stay in the middle of that as much as possible."
On new technology and content consumption:
Scott Cuthbertson: TD Newcrest: "(Ubiquitous) wireless Internet could be terribly damaging for radio."
Lee Westerfield, BMO Capital Markets: "Video, editorial and music consumption have all increased. But that’s different than saying TV, newspaper and radio consumption has increased, because it hasn’t."
On regulation:
Drew McReynolds, RBC Capital Markets: "Acceptable profitability from a market point of view may not be the same as how the Regulator sees that level."
On satellite radio:
Cuthbertson: "We have to wait and see what the conversion rate is for those (who got sat rad for free when they bought their car)."
Westerfield: "(Sat rad share prices) will fall to the earth. By 2010-to-15, you will be able to get music through dashboard broadband (without a monthly subscription fee). I have a price target of zero."
On changing the foreign investment rules:
McFadgen: "I don’t think the CRTC would do it."
