Source : National Post

CHUM Ltd. is negotiating a deal that would see the broadcaster launch three television channels in major urban centres in Britain by the end of next year.

Kevin Byles, vice-president and general manager of CHUM Television International, said yesterday he and other executives are in talks with between two and six potential media partners in the U.K. about launching a streetfront, Citytv clone in London, Manchester and Birmingham.

He cautioned that the talks have been going on for more than a year with no guarantee of a deal.

But he said the British market is enticing to CHUM, which would offer its expertise in attracting young, local audiences and untapped advertising dollars.

"I don't think anybody's done a thorough look at the local advertising market. It's a new revenue stream," he said, adding that ITV and other conventional British television broadcasters tend to focus on national advertising.

"It would be not unlike what Citytv did [in Toronto] when it launched back in the 1970s," Mr. Byles said.

CHUM has had mixed success internationally. Its streetfront, urban Citytv and video-driven MuchMusic formats have been adopted in Argentina, Finland, Colombia, Spain and Mexico through licensing agreements.

But in the one place it had a significant ownership stake -- its partnership in MuchMusic USA -- CHUM missed an opportunity by selling out early at what is now considered a low price, company watchers say.

MuchUSA was launched in 1994 in partnership with Rainbow Media Holdings, a division of Cablevision.

CHUM sold its 50% stake to Rainbow in 2000, and, at the end of May of this year, cancelled the remaining licence agreement.

MuchUSA, now rebranded Fuse, was available in more than 46 million homes when the relationship ended, according to CHUM's Web site.

Mr. Byles said CHUM is anxious to forge a new partnership in the United States, and he insisted that partial ownership is an option despite the maturity of both the American and U.K. markets.

"I would hedge to think if it was a market as important as the U.S. or the U.K. -- and it was the right deal -- we might want to have something more significant [than a licensing agreement]," he said.

The ideal partner would be a media company with an existing broadcasting licence or the ability to apply for one from the regulator, he said, adding that some of CHUM's foreign partners in other countries operate newspaper companies.

A radio company would also be a suitable partner, Mr. Byles added.

CHUM owns and operates eight local TV stations in Ontario and British Columbia, which reach more than 60% of English-speaking Canadians, and 29 radio stations across the country.

It has applied for two new conventional stations in Alberta, and also has 17 niche specialty channels including MuchMusic, Bravo, Space and Star.

But CHUM is about to face one of the biggest challenges in recent years on its home turf. On Sept. 19, Craig Media will launch Toronto One, the first over-the-air TV channel to be introduced in Ontario's capital since CHUM launched Citytv 32 years ago.

Toronto One has built up a roster of local, multicultural on-air talent -- one of Citytv's trademarks -- and, like Citytv, Toronto One aims to capitalize on showing hit movies rather than drama or comedy series in prime time.

Although Craig executives have said their advertising will come from small retailers and others that do not traditionally advertise on television, industry watchers expect CHUM will be hurt by the new entrant.

CHUM's class B shares closed at $48 yesterday on the Toronto Stock Exchange, up 75 cents.

The stock, which has traded as low as $36.03 in the past year, reached a 52-week high of $55 on May 2.

© National Post