MONTREAL – It's rare to witness tempers flare in the public forum that is a CRTC hearing, but observers saw Cogeco Inc. CEO Louis Audet at his passionate best Wednesday afternoon, ripping a deal he says should be wholly quashed, whatever the consequences.
A combined Bell-Astral would have too much power in TV, too much power in radio and that level of ownership of concentration must be denied because it is not in the public interest, the CEO said, many times, when he faced the panel of commissioners. “We’ve arrived at a crossroads at this hearing you are holding this week,” Audet told commissioners, and if the CRTC does not say no to Bell this time, “you’ll find yourself with an ungovernable market where there will just be a few big players,” where there will be “no room for creativity and innovation.”
But what about Bell’s argument that in an era of global video distribution, global brands and the desire by consumers to have connectivity and content everywhere always, big companies with many resources are a must in order to compete, asked CRTC chair Jean-Pierre Blais.
“We think this is a false debate to try and divert your attention away from other things,” said Audet. “It’s an exaggerated, false statement.” Audet then pointed to the CRTC’s recently released Communications Monitoring Report which showed that just 10% of Canadians subscribe to Netflix, viewing about six hours per week each. Comparatively, noted Audet, Canadians collectively consume “730 million TV hours per week in English Canada,” making Netflix’s overall impact “pretty small,” he said.
Turning to radio, Audet called it “absolutely grotesque” that a combined Bell-Astral would own 45% of all radio listening hours in Canada. “That is certainly absurd,” he added. “Forty-five percent listenership to one single company doesn’t make sense.”
When the panel of commissioners asked Audet about how the market might react to a full-on denial of this transaction, as Cogeco and others have asked for, that seemed to really get the CEO’s back up. In a nutshell, the CRTC needs to look out for the public interest. Period. As for the financial markets and other consequences of a denial? “That’s not our problem and it’s not your problem either. You are there to protect the public interest… and not worry about what the market thinks… That is not your problem,” he told chairman Blais.
The fact that the Commission’s new vertical integration regulations are have not been working, says Audet, adds further fuel to his fire that this transaction is off side. Cogeco and others recently took Bell to final offer arbitration over Bell Media’s contract for its specialty services and lost, but clearly Audet still feels wronged. He added the fact Bell will not make multiplatform rights to Bell Media content available to Cogeco, at all, shows the VI regs don’t work and the "megatransaction" has to be turned down
Those content rights, “are not available, period,” he told reporters after his presentation. “Not on the table. I’m talking about a concrete negotiation, not about a statement,” he added, re-iterating, “at any price, the multiple platform rights are not available. Period.”
Audet also noted in his opening statement that the way Astral was sold was also questionable. “(D)espite the knowledge of offers from parties other than Bell, the management and the controlling shareholder of Astral chose to deal exclusively with Bell and to cause their preferred purchaser to bear entirely the financial risk of obtaining the required regulatory approvals.”
This (and Bell Canada CEO George Cope’s characterization on Monday of Cogeco as a “failed bidder” for Astral) made vice-chair broadcasting Tom Pentefountas ask Audet – as did this reporter after Cogeco’s presentation- whether or not he had bid for Astral.
Audet gave both of us the same answer: “We are a public company, so we manage ourselves according to stock exchange rules… we have made no such announcement. Therefore I have nothing more to add.”
But if the deal was quashed by the Commission and Astral came back on the market, would Cogeco be interested? “We have made no such statement,” Audet added.
Cartt.ca has learned, however, from two well-placed sources who spoke on condition of anonymity, that Cogeco and Corus Entertainment partnered to try to purchase Astral together in a deal that would have seen those two companies divide the media assets. In the end, however, Astral chose to lockup with Bell.
Audet was perturbed by the questioning both in – and outside of the hearing room. “The question is really off-side,” he told Pentefountas. “You are there to protect the public interest, nothing more.”
It was a strong, focused, fiery appearance by Audet.
