After turning the deal down once, the Canadian Radio-television and Communication Commission approved telecommunications giant Bell‘s retooled $3.2-billion bid for Astral Media, Montreal-based owner of TV specialty channels and radio stations, as well as a growing out-of-home/digital out-of-home division.
CRTC’s decision also grants Bell an exception to the commission’s common ownership policy, allowing it to keep radio station TSN 690 as it acquires the three English-language Astral stations in Montreal: CJAD, CHOM and Virgin Radio 96. As part of that deal, Bell is required to keep TSN 690 running as an English-language all-sports station for a minimum of seven years.
Bell has long coveted Astral’s specialty channels and radio stations. While little has been said of the OOH properties, it’s expected that, with them, sales staffs will have an even better package to sell in terms of advertising campaigns wanting a media mix. On the other hand, perhaps Bell will want to sell that operation. Neither company has mentioned the OOH in their official press statements.
Up until now, the only telecommunications company involved in digital out-of-home has been TELUS, which quietly has been developing DOOH networks and displays for a wide range of clients. Astral hasn’t been in that sector, but does offer its own OOH properties as well as a growing assortment of DOOH, including spectacular billboards.
Bell’s original bid for Astral was rejected by the CRTC last fall on the grounds that it wasn’t in the best interests of Canadians. But the regulator said that the revised bid, in which Bell agreed to sell some of Astral’s specialty TV channels and radio stations, satisfied its concerns that the company would be too dominant in the market.
Bell’s parent company, BCE Inc., has said it wanted to buy Astral to put its content across traditional TV, computers, smartphones and tablets. Bell is trying to compete with the online streaming service Netflix as well as YouTube, which launched its pay channels last month.
Bell’s competitors (Rogers Communications, TELUS, Quebecor, Cogeco Cable and Eastlink) spoke of their concerns during CRTC hearings about getting deals for content on digital platforms if the Bell-Astral deal went ahead. Rogers also wanted the CRTC to force Bell to sell The Movie Network as a condition of approving the revised deal. But Bell threatened to drop its offer if forced to sell The Movie Network because that would cripple the strategy behind its bid.
Bell Media will add eight Astral pay and specialty TV services to its roster, including HBO Canada and Canal Vie, as well as 77 radio stations like NRJ and Virgin Radio. However, other conditions of the deal include that Bell must sell certain Astral’s English and French specialty TV channels, and some English-language radio stations. It must also keep a number of English-language TV stations in operation for at least four more years. Jim Pattison Broadcast Group and Corus are buying some radio stations and Corus is buying several specialty TV stations. Other Specialty TV stations are being sold under an auction process now underway.
When the deal is finalized, Bell’s share of the English-language market will grow to 35.8%, and its share of the French-language market will be 22.6%.
The CRTC is also requiring Bell to spend $246.9 million on ‘tangible benefits’ over the next seven years – $72 million more than Bell had proposed. This includes initiatives in the radio and television sectors meant to create more Canadian programming, and spending on Canadian films and festivals to promote them.
The combined company will be led by a team of senior Astral and Bell Media executives. Ian Greenberg, Astral president and CEO, will also join the BCE board of directors.
The deal is expected to close on July 5.