Source : Brandon Sun

by Rod Nickel

The Craig family's Prairie TV empire is at a crossroads which could see it become part of a major new network or swallowed by a rival, industry observers say.

Craig Broadcast Systems, which owns Brandon's CKX was out-bid by CHUM Ltd. for Vancouver TV station CKVU last week.  It was Craig's third thwarted attempt in just over a year to expand from its strongholds in Manitoba and Alberta, following CRTC refusal to allow it control of a Hamilton station or to launch a new one in Victoria.

Now some say CHUM, with bookend stations in Ontario and B.C., will make a play for Craig.

"It makes a lot of sense," says Arthur Siegel, a mass communications professor at York University and author of several books on the broadcast industry.

CHUM, whose stations include CityTV and specialty channels MuchMusic and Bravo, could instantly become a major network by acquiring Craig or simply become more attractive for take-over by a larger player, Siegel says.

"In either case, CHUM comes out a big winner," he says. "(Buying Craig) would make CHUM the crown jewel in potential takeovers."

CHUM Television Jay Switzer is coy about whether the Craig stations are in his company's future plans.

"We pride ourselves on not being a network .... Our strength and specialty is strong local TV."

Switzer likens CHUM's programming to that offered by A-Channel, which Craig owns.

Drew Craig, chief executive officer of Craig Broadcast Systems, says the company is currently expanding its line-up of specialty channels but sees opportunities for more conventional channels, too.

"It would have been nice to expand into the Vancouver market but it's not really necessary to maintain the level of service we're currently providing.

" ... It's not our plan at this point to talk about (selling stations or aligning with CHUM).  We're exploring other options."

Growing will be key for Craig, Siegel says.

"In this type of situation, if you're not growing, you're in trouble," Siegel says.  "Consolidation has gone so far you have to have some sort of (national) linkage."

Craig is a family-owned company, so CHUM can't simply acquire it by offering high value for shares.

Buying Craig would give CHUM access to 80 per cent of the English Canada TV market, says Ian Morrison, spokesman for Friends of Canadian Broadcasting."

But Craig has options other than selling, he says.  It could try to swallow CHUM, although the Ontario-based network is worth an estimated three times as much as Craig.  Or it could opt for a strategic alliance with CHUM, which already supplies Craig much of its U.S. programming.

"If they're content (with the status quo) there's not much CHUM can do other than starve them for programs," Morrison says.

He says any sale of Craig properties wouldn't likely threaten a small-market station like Brandon's.

The CRTC must approve any licence transfer and usually protects existing stations, he says.

Craig's dilemma is part of a national trend in media consolidation, Morrison says, adding it's possible the number of Canadian broadcasters could shrink from eight to four within three years, leaving CanWest Global, BCE, Rogers and Shaw.

"It is troubling for the diversity of the broadcasting system.  Viewers and listeners aren't well served when their choices disappear."

Michael McEwan, secretary-general of the North American Broadcasters Association, says it's becoming increasingly difficult for regional players like Craig to thrive.

"The bigger you are the more you can lay off your costs when you buy program rights, for example."

CHUM's acquisition of CKVU is subject to CRTC approval.

© Brandon Sun