Source : Globe & Mail

President tells CRTC hearing viewers would have more varied coverage, even with both operating under same roof

by Mark MacKinnon

Hull – Allowing a CTV Inc. takeover of NetStar Communications Inc. would lead to more choice for viewers, even though it would bring both national sports networks under the same broadcasting roof, the Canadian Radio-television and Telecommunications Commission was told yesterday.

CTV president and chief executive officer Ivan Fecan told the CRTC that the mandates of NetStar's flagship – The Sports Network (TSN) – and CTV's Sportsnet are complementary and the two can work in tandem to provide more varied coverage rather than competing for each other's viewers.

TSN's mandate is to be a national network; Sportsnet has a four-region focus. If the two networks were to co-ordinate their programming schedules, sports fans would benefit, Mr. Fecan said.

"We feel it is in the best interests of viewers to focus the channels more nationally and regionally," he said. "You want to sit at a table and maximize what you offer viewers and not play demolition derby."

CTV is pushing hard for CRTC approval of the deal after buying a 68-per-cent share of NetStar worth roughly $465-million earlier this year. That share has been placed in trust pending the hearing's outcome.

The other 32 per cent is owned by U.S. sports network ESPN, a subsidiary of Walt Disney Co. of Burbank, Calif.

The CRTC, if it finds fault with the deal, could block it or impose tough conditions. CTV's worst fear is that it would be forced to sell the jewel of the deal – TSN – to a rival.

The hearing is scheduled to wrap up today after presentations from interveners – many of whom oppose the takeover for competitive reasons. Nine groups, some as disparate as the Friends of Canadian Broadcasting, the commissioner of Major League Baseball and the Directors Guild of Canada, have made written submissions opposing the deal.

Many of the groups are concerned that if it is allowed to go through unfettered, it would create a monopoly in English-language sports television. The new entity, they fear, would use its increased market clout to force sellers of sports programming – including struggling Canadian-based National Hockey League clubs – to lower their prices.

That, Mr. Fecan said, wouldn't be a smart business practice. Artificially low prices would only make the coverage more attractive to other networks contemplating buying sports programming.

"We have a huge amount to lose if we don't offer fair prices for sports packages and if we don't get them," Mr. Fecan said.

CTV, which said yesterday that it may be willing to agree to stringent Canadian content regulations to ensure the deal's success, pointed out that the CRTC has allowed other companies to own two similar but complementary stations. One example given was MuchMusic and MuchMoreMusic, both owned by CHUM Ltd. of Toronto.

During the most recent cable ratings period (April 1, 1998, to May 1, 1999), TSN had a 6.6-per-cent market share of its target demographic – men 18 and older – compared with Sportsnet's 1.7 per cent.

If the two networks work together, there will be fewer prospective buyers for many of those television hours, CTV executive vice-president Trina McQueen acknowledged.

However, the big networks still have the edge when it comes to landing the most lucrative sporting events because of the larger audiences they can reach, she said. What the cable sports networks fight over are often lesser events or regular-season games that the major networks don't want.

"No matter what happens to CTV-NetStar, there will be competition for the Olympics, competition for the Super Bowl, for the Grey Cup, for the Stanley Cup," she said.

Andrée Wylie, the CRTC's vice-chairwoman of broadcasting, said she is concerned the new company will use its new muscle to wrest premier sporting events from the CBC and other networks, and put them on the main CTV network.

The federal Competition Bureau ruled last week that the proposed deal will not adversely affect distributors or advertisers. However, the bureau is concerned the deal may lessen competition for cable rights to sporting events, and is withholding a final decision pending the end of the CRTC hearing.

One unknown on this front is Headline Sports, an all-sports news channel. Headline, owned by Sportscope Television Network Ltd. of Toronto, has applied for an amended CRTC licence that would allow it to carry live programming. If that application is granted, it would guarantee the competition that Canadian sports clubs desire.

The CRTC also questioned CTV executives about their plan to rebrand TSN as ESPN Canada, wondering how much control of the station that will give the U.S. network.

© Globe Information Services