Thursday, September 17, 2009

For the price of a cup of coffee

So who's covering the big picture on what's happening with local TV, including the fire sale of a series of small-market TV stations across Canada over the last six months by conglomerates Canwest and CTVglobemedia? Who suggests the shuttering of the Red Deer station, which found no bargain-basement buyer, and the resulting loss of local news in rich Alberta's third largest city, is like Sherbrooke, Quebec, suddenly losing its local news coverage?

Le Devoir. It happens to be one of the only large-city daily newspapers in Canada that is not owned by a media conglomerate.

The "local TV matters" campaign - run by the major networks who have been using their local stations, including the ill-fated one in Red Deer, as bargaining chips to get access to cable fee revenues - is only mentioned toward the end of the article.

Meanwhile, the networks' "campaign" was the story earlier this week in many of the country's major daily newspapers. The ones that are connected through their media conglomerate owners to the those same campaigning networks.

Friday, September 11, 2009

Celebrating the survival of CHEK in Victoria

A big note of congratulations to employees of CHEK in Victoria for surviving Week One after leading the effort to buy the station and rescue it from closure.

CHEK’s story of survival against all odds is another glaring example of how the media is doing a lousy job of covering its own crisis. And this one needs to be told, because there are lessons in it for many of us.

CHEK is one of five E! stations that Canwest put up for sale in February. By July, Canwest claimed it couldn’t find a buyer and CHEK would go off the air by the end of August.

While Canada’s media owners spent the spring and summer complaining that local news was no longer viable, we know a lot of prospective buyers weren’t listening. They knew they could improve on the E! model for local TV, which we know is deadly. For example, the E! station in Hamilton, CHCH, was charged more than $51M by Canwest for airing a package of mostly American shows. Compare that to the $8M spent on local news and sports. Revenue for 2009 was projected to be $44M. That’s respectable but not if you’re footing the bill for expensive Hollywood stuff. (Those figures were gleaned from Channel Zero’s successful application to the CRTC to buy CHCH.)

You can bet the figures for CHEK were similarly onerous.

Investors who thought they could improve on the model couldn’t get negotiations going with Canwest, and the competing groups of U.S. bondholders that appear to be running it. Things looked like they were going to stall.

So a group of employees dug in and began their rescue. Station manager John Pollard was the first to get the ball rolling and work on an employee purchase. “If he had put the Canwest corporate interest in front of the station’s interest, we would not be here today,” says assignment editor Richard Konwick who’s also president of CEP local 815M. Lesson #1.

“Virtually all” of CHEK’s 45 employees bought shares worth $15K each. CEP put up $105K in interest-free loans which worked out to $3,500 per employee to offset their cost of buying the shares.

Strings were pulled – by local MP Gary Lunn, who happens to be Sports Minister in the Harper cabinet. Levi Sampson, president of the Harmac pulp mill in Nanaimo, which was saved from closing by a similar model, helped rally local investors raise more money. Lesson #2. It's good to have friends in high places.

Many twists and turns later, the deal got done a week ago today. The employee group and local investors raised about $2.5 million to cover the first bit of operating costs and Canwest announced it was selling the station for $2.

The employees make up the 2nd largest single investor group and while the corporate structure of the new station hasn’t been worked out, Konwick says the intent is to have an employee representative on the Board of Directors.

Further, he says the deal would have been impossible if the station had not been unionized, because “you need some kind of structure to be able to pull this off”. Lesson #3.

Who says local news is dead? CHEK is a proof that people in communities know there’s real value in local news – as long as it’s freed from conglomerate structures that make no sense.

Tuesday, September 1, 2009

Hope is still alive for Victoria’s oldest TV station

The group bidding to take over CHEK-TV in Victoria is still negotiating with Canwest to keep the station open. It was slated to be closed last night by the debt-hobbled media conglomerate – along with the Red Deer’s CHCA-TV, which unfortunately did go dark. However, CHEK stayed on the air today and was to take it day by day until a deal can be reached.

CHEK-TV employees and local investors launched a campaign this summer to keep the station on the air, reportedly raising $2.5 million. On the weekend, Canwest turned down an offer from the group, claiming it didn’t want to be on the hook for operating losses until the sale was granted the necessary CRTC approval.

Late Monday, on what they thought was the last newscast, CHEK reported that the deadline had been extended. Canwest reportedly hopes a deal can be made by Friday.

Given the local interest in the station, it would have been an outrage if CHEK had been allowed to close yesterday. We’ll keep our fingers crossed this week for the employees and the local viewers.

Meanwhile, Channel Zero’s purchase of two other Canwest stations – CHCH-TV in Hamilton and CJNT-TV in Montreal – was approved last Friday. The new owners got everything they were looking for from the CRTC: a seven-year licence, no requirements to show Canadian priority programming in prime time and no requirement to spend on tangible benefits from the deal. They will be called to a public hearing in 2012 to review their approach to programming.