Greg O’Brien
MONTREAL – There will be more consolidation in our industry, Corus Entertainment CEO John Cassaday told a group of investors on Wednesday at CIBC’s Annual Eastern Institutional Investor Conference.
When asked about the potential for more merger and acquisition activity, Cassaday said it’s just a matter of when. “We think there’s going to be considerably more consolidation in Canada on the distribution and programming side,” he explained.
However, this is a small market – complete with foreign ownership restrictions – that largely tie M&A moves to the funds that can (or can’t) be raised in Canada. So, the Corus CEO said he is keeping an eye on a CRTC telecom hearing that began today – into the ownership of new wireless player Globalive. (Cartt.ca covered the hearing here.)
The incumbent telcos have complained to the Commission that there is simply too much foreign control of Globalive because so much of the company’s financial backing is from Egyptian wireless powerhouse Orascom Telecom.
“I’m watching with interest this Globalive case,” said Cassaday. “The issue here, I think, comes down to ‘how do we feel about foreign ownership here in Canada?’ And I think one very likely scenario is we’re going to say, in some sectors, foreign ownership is good for competition so let’s create a more open skies environment.
“That could cause a tremendous amount of M&A in the distribution platform, whether it’s cable or telephony.”
When it comes to other regs, Cassaday confirmed Corus’ rejection of fee-for-carriage for conventional television (“I don’t see how the consumer could look at it as anything but a tax,” he said) and suggested changes to radio rules, specifically the multiple license ownership restrictions, which limit companies to owning two AM stations and two FM stations in any given market.
With radio owners petitioning the Commission to switch their AM stations to FM wherever they can (and with no one applying for new AM licenses), it doesn’t make sense any more to limit companies to owning two such stations in a market, when they really don’t want any in than band.
“We believe it’s time to move from two AMs and two FMs in a market to four FMs and an unlimited number of AMs,” said Cassaday. “No one has applied for an AM station in some time, so why are we putting a fence around that particular area?”
Cassaday said he would switch popular Corus news stations in Vancouver (CKNW), Edmonton (CHED) and Winnipeg (CJOB) to FM if he could. But they remain on AM because the company already has a pair of FM stations in each of those markets.
“You want to migrate those to the FM band because that’s where the younger audiences are,” he said. “It’s in the public interest.”
And when TV finally goes digital, there will simply be more room for more stations in large markets where the FM frequencies are already spoken for.
“There are two channels, five and six, which will free up low end of the FM dial – under 88.7 FM,” he added. “There’s probably room for 10 to 15 more radio stations down there and hopefully those will go to the incumbent AM stations to convert to FM.”
