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.


  1. It's great to see CHEK still on the air. I do receive the station from Toronto on Rogers Cable.

    I do think that if CHEK puts more emphasis on local programming that includes the news, feature shows about people and places on the island, and local entertainment, the station will gain an audience. CHEK could also produce programs for syndication on other stations. I remember watching locally produced programs when I was young such as CJOH Ottawa's "You Cant Do That on Television" and CHCH's "Tiny Talent Time." I'm not suggesting a repeat of the exact same programs. I do think that if each station could produce one non-news hour program, then Canadians will have great local programming across the country.

  2. Survival? Because all the employees just pissed away 15k to keep the lights on? That hardly means it's going to survive.

    Too bad it didn't get taken over by the porn channel folks who bought CHCH. What a snorefest that station is now. How many hours can one person watch their dopey morning hosts re-read the same newscast? And who's waiting around for that big payoff- the evening movies. HD? They look like they're running old VHS tapes from my basement. And why do I want to watch a 25 year old movie when there are new shows or live sports on every other channel?

  3. Tch! I'd call it "entrepreneurial spirit and community spirit in partnership" here.

    And if CHEK wants to take a shot at some homegrown comedy or drama production along with the news content, let'em take their best shot!


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