Source : Edmonton Journal

Toronto's CHUM keen to enter Alberta market

EDMONTON - Edmonton's A-Channel, in the middle of a strike and newscast ratings slump, may soon get new owners.

The TV station's parent company, Calgary-based Craig Media, is for sale for a reported $400 million after over-extending itself with the launch of a TV station in the super-competitive Toronto market.

Toronto's CHUM Ltd., still waiting for a CRTC decision in its application to launch channels in Calgary and Edmonton, could be at the front of the line in a bidding war. CHUM president Jay Switzer wouldn't confirm his company's interest in the A-Channel stations Tuesday, but said his company wants into Alberta.

"It's one of the most buoyant markets in the entire country. We think that Calgary and Edmonton are the most underserved markets in Canada, and we've had an interest there for a very long time."

Mario Mota, president of Decima Publishing, said CHUM could go ahead and establish new stations in Calgary and Edmonton if it gets the licences.

The CRTC has already made a decision on the applications, but it is still tied up in the agency's bureaucracy, said Mota, whose Ottawa company publishes newsletters on the media industry.

But it's more likely CHUM would prefer the easier route of buying existing stations, as it did to get into the Vancouver market, he said.Craig Media is Canada's largest private broadcaster, with A-Channels in Edmonton, Calgary and Manitoba, TV stations in Brandon and Toronto, and digital specialty services.

But it was no secret that the company needed access to more capital if it wanted to grow, Mota said.

You need to look at the long-term to get over the lean years, especially when you are starting new channels, he said.

"It was losing money with Toronto 1 and its new digital channels, and I think the Craig family decided they didn't want to be in it for the long haul."

Another media company analyst said Craig Media didn't have the critical mass to pull off the Toronto 1 launch.

"It was kind of a bridge too far," said the analyst, who did not want to be named. "Sometimes you overextend yourself and that's what happened here."

He also said the CRTC made a mistake in awarding the new Toronto station to Craig Media. "They should have either not awarded one at all, or given it to a stronger player. It's fine to ... give the little guy a chance. But when it results in something like this, it's pretty ugly."

It's not a bad time to sell a broadcast company, as the markets are reasonably good, the analyst said.

But Craig Media is worth only $200 million to $250 million "on a good day," he added. "It's hard to imagine them getting $400 million, but you never know."

A-Channel Edmonton's supper hour newscast, which had seen substantial ratings gains in previous Bureau of Broadcast Measurement surveys, dropped to 8,300 viewers from 22,600 last fall. It tied with CBC for the least-watched news show among the key 18-plus age group.

The union representing A-Channel's striking workers said the numbers, released Jan. 7, prove its strike is affecting the station's popularity.

But A-Channel's news director Chris Duncan dismissed that notion at the time. Members of the Communication, Energy and Paperworkers Union Local 1900 have been on strike since Sept. 17.

Drew Craig, CEO of the tightly held family company, did not immediately return calls from The Journal Tuesday.

Providence Equity Partners, the U.S. company that owns 19.9 per cent of Craig Media, has also declined comment.

© Edmonton Journal