GATINEAU – The CRTC this week called for comments on amending its benefits policy when it comes to transactions involving regulated media companies.
Set out in 1989, the existing policy generally says 10% of the value of any business transaction involving television companies must be set aside for “benefits”, i.e. something the acquiring company might not normally spend on. So, if a broadcaster is purchased for $100 million, the rule of thumb has said that $10 million must go towards Canadian television production or other industry-related initiatives like internships, scholarships or local expression.
“(T)he benefits policy stipulates that a percentage of the value of the transaction must be allocated to incremental spending (i.e., not part of the normal responsibilities of the existing licensee) that will benefit audiences in the market(s) served and the Canadian broadcasting system as a whole,” explains the CRTC.
In the past 12 months or so, a number of proceedings have addressed or attempted to address the benefits policy, including the public process examining the Canadian Television Fund itself and the CRTC’s decision to approve the change in control of BCE and its minority ownership in CTVglobemedia. That decision saw the benefits portion of the deal doubled and stipulated $10.5 million of the $21.91 million in benefits be directed to an interest-generating fund that would be transferred every August to the Canadian New Media fund administered by Telefilm.
Given these and other issues and questions, the CRTC now wants to officially alter its benefits policy so that a percentage of the benefits is always directed to the CTF – and that the buyer sending the cash could request the money be used on new media – or television, or both.
The Commission has called for comments on the proceeding and the deadline is September 8.
