Bell acquiring 100% of CTV
KJ Mullins: Today BCE Inc. (Bell) announced that it has agreed to acquire 100 percent of CTV. The transaction gives Bell full ownership of television, digital media, conventional TV and radio broadcasting operation.
Currently Bell owns 15 percent equity in CTV. The transaction for the additional 85 percent will cost the company $1.3 billion in equity value from The Woodbridge Company Limited, the Toronto-based holding company of the Thomson family; Ontario Teachers Pension Plan; and Torstar Corporation. Together with $1.7 billion in proportionate debt, the total transaction value is $3.2 billion. The purchase price represents a multiple of 10x proportionate EBITDA, comparable with similar recent media-industry transactions. In a separate transaction, Woodbridge will acquire ownership of the Globe and Mail, in which Bell will continue to retain a 15% equity position.
“Acquiring CTV’s range of premier video content enhances Bell’s execution of our strategic imperatives by leveraging our significant broadband network investments, accelerating Bell’s video growth across all three screens – mobile, online and TV – and achieving a competitive cost structure. 100% ownership of CTV enables Bell to maximize strategic and operating synergies with CTV, including the efficiency of our content and advertising spend,” said George Cope, President and CEO of Bell Canada and BCE. “Our industry is changing rapidly. Increasing vertical integration across the communications landscape, ongoing technological advancement and key regulatory developments introduce new opportunities with the ownership of high-demand content by Bell. Our acquisition of CTV more than levels the playing field in our increasingly competitive industry.”
CEO of CTV Ivan Fecan said that this is the “right deal at the right time.”
Cope said that his company is looking forward to welcoming CTV’s more than 5,000 employees to Bell.
CTV operates 27 stations in Canada, 30 specialty channels, including TSN and RDS, the top English and French specialty channels; premium online video programming and properties such as CTV.ca, TSN.ca, RDS.ca, MuchMusic.com, MTV.ca and TheComedyNetwork.ca; and CHUM Radio, which operates 34 radio stations throughout Canada.
“The transaction purchase price represents an attractive standalone valuation for Canada’s leading media provider even before upside opportunities from monetizing CTV’s programming across all of Bell’s broadband wireless and wireline platforms. This acquisition is entirely consistent with Bell’s shareholder value objectives and dividend growth model,” said Siim Vanaselja, Chief Financial Officer for Bell Canada and BCE.
According to Peter Murdoch, , Vice-President, Media, for the Communications, Energy and Paperworkers Union. CEP represents employees at both CTV and The Globe the public will benefit from the transaction.
“In the emerging days of online broadcasting, there was a certain inevitability that these two media giants would set up a media box store. “The CRTC must now ensure, on behalf of consumers, that such massive media power will be used to benefit all Canadians in their news and entertainment programming,” says Murdoch.
Murdoch added that two companies are now in control of about two-thirds of all broadcasting revenues in English Canada. Canwest was recently brought by Shaw.
“This is enormous power and influence which has to be balanced by a more activist CRTC, as the publicly-minded regulator,” adds Murdoch.
Because of the purchases Murdoch says that the fee-for-carriage controversy, part of a Federal Court of Appeal case “has almost become moot because broadcasting carriers and content providers are on the same team.”
The critical issue is now about quality local news Murdoch concluded in a press release, “Will Canadians continue to see quality local news and information on their hometown stations? The CRTC has to muscle up in Canadians’ interest to balance the profit-maximizing, cost-cutting corporate interests of big media.”
It must be noted that BCE Inc. does not yet own the additional 85 percent of CTV. The closing date has yet to be announced and because of that forward-looking statements,, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements.