CHCH likely to survive: analyst
More than just a small player
February 07, 2009
Lisa Grace Marr
The Hamilton Spectator
http://www.thespec.com/News/Business/article/509117
While Hamilton may consider CHCH as its own TV station, it is not just a little player, says the spokesperson of a Canadian media watchdog group.
"It's not the smallest and weakest TV station in Canada," said Ian Morrison of Friends of Canadian Broadcasting. "Hamilton has the extra advantage of having about seven million people in its line of sight."
In addition, he said, CHCH is broadcast through cable and satellite stations throughout the province, bolstering its value.
He spoke following the announcement this week by parent company Canwest Global that it would explore the idea of selling CHCH, and four sister stations.
Canwest made the announcement as bankers moved to limit the company's borrowing power due to its massive $3.6-billion debt.
Shares in Canwest Global Communications went up eight cents yesterday to 50 cents on the news. Analysts say it's unlikely the company will find a buyer in the current recession and a money-saving closure is more likely.
But Morrison suggested there are several plausible outcomes for the station aside from closure:
* Astral Media, a major media player in Quebec with some presence in the rest of the country, may jump at the chance to pick up an English TV network.
* Torstar Corporation, which owns The Hamilton Spectator and The Toronto Star, made a bid for a licence to open television stations in southern Ontario in 2002 but was denied by the CRTC. This week, it announced its Transit Television Network in the United States was filing for bankruptcy. Morrison said there's no comparison between the transit network and CHCH. "The Spectator and a television station under one roof has some synergies."
* Corus Entertainment, based in Calgary, is a specialty TV and radio company that may seize an opportunity to expand.
* Rogers Media branched into TV last year with its purchase of CHUM and may have an appetite for more.
* CTV would likely be very interested, said Morrison, but it would also be very unlikely to be approved by the CRTC, given the conglomeration in the industry.
Mario Frankovich, president and CEO of Burgeonvest Securities, said the station has been under the eye of Bay Street investors for the last few weeks while Canwest's troubles were brewing. "It's hard to say what will happen ... it has value. (Closing the station) would be like putting a torch to money. A licence has value."
The challenge for the station is that its highest expense is its most valuable asset: local coverage.
Morrison said it's too early to throw in the towel on CH.
"I think a lot of people are kicking the tires, checking out profitability, what the obligations are under regulations. It's a fire sale ... but it's a very complicated situation."
