Broadcaster Magazine

CRTC Approves Sale of Bold to Blue Ant

The CRTC has approved the application by Blue Ant Media Inc., on behalf of Blue Ant Multimedia Inc. and 8182493 Canada Inc., partners in a general partnership carrying on business as Blue Ant Media Partnership, for authority to acquire from the Canadian Broadcasting Corporation the assets of the national, English-language specialty Category A service known as bold and for a new broadcasting licence to continue the operation  under the same terms and conditions as those in effect under the current licence.

After examining the public record for this application in light of applicable regulations and policies, the Commission considers that it must address the following issues:

the assessment of the value of the transaction; and

the assessment of the proposed tangible benefits package.

Because the Commission does not solicit competing applications for authority to transfer the ownership or control of radio, television and other programming undertakings, the onus is on the applicant to demonstrate that the benefits proposed in the application are commensurate with the size and nature of the transaction (see Public Notice 1999-97).

  Pursuant to the terms of the Asset Purchase Agreement, the purchase price for the transaction is $8 million. Upon closing of the transaction, the applicant will acquire the undertaking’s programming inventory for $2 million.

The Commission has reviewed the proposed value of the transaction and is satisfied that $10 million is the correct valuation for this transaction.

The applicant proposed a tangible benefits package representing a financial contribution of 10% of the value of the transaction ($10 million) to be allocated over a seven-year period.

The applicant also proposed that $950,000 in benefits (95% of total benefits) be allocated to the self-administered Blue Ant Multiscreen Fund (BAMF), none of which will be used to fund administrative costs. Moreover, the applicant indicated that, in light of this significant new funding within the BAMF, this funding will now finance content that reflects Canada’s rural and non-urban regions.

The applicant proposed that 50% of the benefits contributed to the BAMF be directed to independent productions, with the remainder spent on in-house productions. The applicant also indicated that this is consistent with the Commission’s determination set out in Broadcasting Decision 2012-381. Notwithstanding the CMPA’s request that at least 75% of the benefits directed to the BAMF be made available to independent producers, the Commission is satisfied that the proposed 50% level is appropriate in the context of this application. Further, the Commission is of the view that it is consistent with both the Commission’s policy that tangible benefits generally flow to independent production and with its determination set out in the above-noted decision.

The applicant further proposed that the remaining benefits ($50,000, representing 5% of total benefits) be allocated to social benefits and, in this case, directed to the National Screen Institute (NSI).[1] The applicant will direct this portion of its benefits package to the NSI to support the creation of training or mentorship programs related to transmedia content creation.

Finally, the Partnership proposed that the benefits allocated to both the BAMF and NSI be paid over seven consecutive years in equal payments. It also confirmed that no more than 10% of the benefits would be spent on stand-alone digital media content.

 The applicant confirmed that it would accept the standard conditions of licence for specialty Category A services set out in Broadcasting Regulatory Policy 2011-443. Accordingly, the service known as bold is hereby designated a Category A service.

The Commission notes that bold’s licence will expire 31 August 2013.[2] The Commission also notes that the Partnership indicated that it intended to file a renewal application for bold’s licence in the event that the Commission approved the application. The Commission considers that it is now incumbent on the Partnership to file a renewal application for bold’s licence. As a result, the Commission will not deal with the CBC’s application  to renew the licence of bold.

  The Commission also reminds the Partnership and the CBC that further approval of the Governor in Council.