On the morning of March 16, telecom giant Bell announced it would buy Astral Media for $3.38 billion. The deal would offer more content and control to Bell, which has plans to expand its multi-platform media department.
The deal will see Bell pay $50 per-share for the company (that’s 40% premium over Astral’s Thursday-night close price of $36.25). It will now own the rights to HBO Canada, the Movie Network and a network of billboards across the country. Not only does the deal offer Bell new avenues for income, but it will also soften the blow of rising content expenditures (especially in French-language media). Bell has overcome a significant drain on the books with this buy, since it says that Astral products “currently represent Bell’s largest single content cost.”
Advantages for Bell abound, but it didn’t take long for the word “monopoly” to spring up in blog posts and tweets, and many questioned whether the deal would get Canadian Radio-television and Telecommunications Commission’s (CRTC) clearance due to regulations dictating how many radio stations a company can own in any one areas. The CRTC must approve the transaction before the deal can be completed and Bell could theoretically be forced to sell off assets if the regulator decides the deal could harm competition. (Bell has agreed to pay $150-million to Astral if the CRTC does not approve the sale.) But Cope tried several times to dismiss those concerns in a press conference that followed the announcement. Monopolization is a “yesterday’s world” phenomenon, he said. “We compete everyday in the marketplace.”
Still, concerns (particularly surround radio) continued to swirl online. Astral currently controls 22 English-language specialty TV channels, 13 French channels and 84 radio stations in 50 markets. Many of these are successful thanks to their brands like Virgin Radio, EZ Rock and Boom, and in some regions Bell was really the only significant competitor Astral had. The acquisition would give Bell both anglo-commercial AM stations in Montreal, for example. And in areas like Vancouver and Toronto where Bell will now own many radio stations it will likely have to relinquish some to meet the CRTC limit of just four stations.
But while Cope fielded a few questions about CRTC regulation at the conference, he seemed confident the company had performed a thorough review of regulator rules. He said that while in some markets Bell might have to review their stations and control options, the company would happily comply with the CRTC rules. In Quebec, he said, their competitor Quebecor Media, was still a larger entity, so Bell believes the CRTC will view the move as quite positive in terms of improving competition in the province. As for questions that pressed whether Bell believed it could pass the CRTC’s requirements, Cope was firm: “we’ve obviously looked at it carefully.”