Story and photo by Steve Faguy
MONTREAL – Maintaining the CRTC has no alternative but to "categorically refuse" Bell's purchase of Astral Media, Quebecor refused to provide the Commission with a list of assets that the combined company should be forced to divest if the transaction is approved.
"If approved, such a project would inevitably create prejudicial repercussions for consumers, the public interest, broadcasting policy, the Canadian broadcasting system and the Canadian companies that work in it," Quebecor CEO Robert Dépatie told the commissioners on Wednesday morning during its appearance as an intervener. Joined by TVA group president Pierre Dion and Vidéotron president Manon Brouillette (but not former CEO Pierre Karl Péladeau, who stepped down the day before at the company's AGM), Dépatie used very strong language to denounce the proposed acquisition, saying it was "nothing less than a sham whose goal is to throw sand in the eyes of the Commission," and that proposed divestitures are "falsely respectful of the public interest."
Quebecor's refusal to offer alternatives echoed the presentation of Cogeco a day earlier, which also refused to suggest safeguards to the Regulator because it felt there is no reasonable alternative but to shut the deal down entirely. "It's not sufficient to adopt a less arrogant tone and show a minimum of respect toward regulatory authority so that it will give its approval to a transfer of broadcasting assets whose value exceeds $2 billion and whose impact goes beyond all understanding," Dépatie continued.
Quebecor's presentation was rich with statistics: a combined Bell/Astral would have a 43.2% of French-language specialty TV audience (compared with 16.6% for Quebecor), 39.5% of all specialty subscriber revenue across Canada, and 64% of all subscriber revenue from Vidéotron to French-language specialty services. RDS's sports specialty channels and the Super Écran pay TV service alone represent 25% of Videotron's wholesale subscriber fees, the company said.
Much of Quebecor's data focused on specialty services, but when counting conventional television, where Quebecor's TVA network is, by far, the dominant player in Quebec, Bell/Astral and Quebecor would be on a more equal footing in terms of audience and ad revenue, is what Bell executives maintain. But Dion (left, with Depatie, in a good mood right before they presented their case) warned that this argument of Bell's is "trickery" ("supercherie" in French) because conventional television is in decline. Bell would get far more subscriber revenue from French-language services than Quebecor.
What's more, with Astral’s assets, Bell would be the only broadcaster dominant in both French and English Canada. This would allow it to engage in "dumping" of ad inventory, selling advertising on Astral's French-language specialty services at a heavy discount, or even throwing them in as a "bonus" in national contracts. Dion said more than half of ads that appear on TVA are "decided or influenced" from Toronto or outside the country.
Still, chairman Jean-Pierre Blais wasn't buying Quebecor as the underdog. Asked to consider the companies as a whole, he asked: "Are you trying to tell me you can't compete with (Bell)?"
Dépatie responded that the company’s print assets are in "flagrant" decline, its magazines as well, and that it was not as well established in the digital sphere as Bell. That prompted a sarcastic tweet from Astral vice-president Pierre Rodrigue saying Quebecor shareholders should sell their shares immediately.
Quebec regional commissioner Suzanne Lamarre took issue with Quebecor’s additional demand that Bell be prevented from acquiring a French-language conventional network in the future. Pointing out that acquisition requests are submitted to the CRTC by the company being purchased, not the purchaser, she thought it would be unfair to bind a third party. More importantly, she said, wouldn't it be against the "principles of natural justice" to pre-emptively deny even a hearing into a potential purchase? "They couldn't even ask, no matter when, no matter who, no matter what the circumstances."
In response, Quebecor fell back on its main point: The only proper solution is to deny the Bell-Astral purchase completely.
Bell gets its last chance to reply to all the negative interventions Friday morning, when it returns to face the panel. Cpac.ca is carrying it live.
