TABLE OF CONTENTS Jun 2001 - 0 comments

News - 01-JUN-01 (June 01, 2001)

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COGECO LEFT AT ALTAR? - Sure, Rogers Communications emerged as the happy groom to Cable Atlantic's bubbly bride, but Cogeco Inc. was apparently the near-suitor for Danny Williams' cable dowry. Sources told Cablecaster that last summer, when it was apparent that Williams wanted to exit cable to pursue his political aspirations in Newfoundland, Rogers had been in hot pursuit of the St. John's-based cable operator. Offers ensued but were deemed too low. Out of the blue, Cogeco CEO Louis Audet entered the picture, on one knee as it were, with a big ring, er, offer, extended. A deal was hammered out between Cogeco and Cable Atlantic but in the two weeks it took to dot all the "i's" and cross all the "t's", Rogers, flush with $240 million from its pre-nuptial agreement with Vidéotron in a marriage that went sour just days earlier, returned to St. John's with a bigger and better diamond -- and the ($232 million) marriage was consummated between Cable Atlantic and Rogers in the middle of the night, mere hours before the scheduled signing ceremony with Cogeco. And you thought Rogers used that money to buy the Toronto Blue Jays.

SEPTEMBER IS NOT FOR EVERYONE - It's looking more and more like the targeted September launch date for the new roster of digital specialty services will be missed. Specialty service operators at the CCTA Convention were privately saying that with carriage negotiations either dragging or non-existent, the time frame is far too tight, with one executive telling Cablecaster that they won't be ready until January. The public face is still that 50-plus new Canadian services will be ready for launch on a single day in September. If you still believe that, well, let's just say that's beginning to look more and more difficult with each passing day. Plus, while the regulations say the new category one channels must launch this fall, by November 24, actually, the services can apply for an extension.

BUFFET RUMORS BUFFET SHAW - While the story that uber-investor Warren Buffet of Berkshire Hathaway is gobbling up Shaw Communications shares has had legs all through the second quarter, it turns out those legs should have been tripped up a while ago. The reason? It's not true. The story made the rounds around the web again in May where a writer extrapolated that Buffet, through a number of personal and corporate investment links, controlled roughly 39% of the outstanding voting shares in Shaw. National Post columnist William Hanley wrote, nice story, "even better if it were true." While it's true that Buffet does own some Shaw shares, said Hanley, and a Buffet associate, Lou Simpson -- through his own portfolio at Berkshire insurance unit GEICO -- has increased his position in Shaw class B shares to about 10%, the Shaw family owns well over 80% of the voting interest in the company (we checked).

TALK, STAR! GO BASIC - Former analog orphans, Chum-owned Star! The Entertainment Information Station and CTV-owned Talktv were added to Rogers Cable's basic analog roster last month. Both were added after ongoing system rebuilds allowed for more analog room. The deal is a good one for CTV and Star! as approximately 845,000 Rogers Cable customers in Toronto, Mississauga and Brampton will have access to the channels. The two channels, as modified dual license-holders, were supposed to be carried on analog since their launches because Rogers did not, and still has not, hit a CRTC-imposed target of 15% digital box penetration by launch time. It was only recently that Rogers had enough new capacity in which to add the channels to analog in the Toronto area. Earlier in the month, the CRTC rejected a request made on April 6 by Rogers Cable to increase basic cable rates in order to add Star! to basic but Rogers decided to add the channel anyway with no fee increases. Also tied to the April 6 request to raise basic rates for Star! was CHUM's Toronto all-news channel CP 24. The Commission recently changed CP 24's license so that it could pursue more local advertising, and said in light of that fact, it took a dim view of then also raising basic cable rates for CP 24. The service is already on basic in Rogers' Toronto systems.

AREA 51 FOR SHAW/STAR CHOICE? - Besides its two category one digital channels which will launch this fall -- The Documentary Channel and Land & Sea -- Corus Entertainment says it will also unveil three category twos: Discovery Kids; Edge TV (alternative music); and Scream (horror) in the fall when distributors launch new specialty services. Since Corus is considered "affiliated" to Shaw Communications and its subsidiaries Shaw Cablesystems and Star Choice by the CRTC by virtue of the fact the companies share JR Shaw as their majority shareholder, simple math indicates Shaw Cablesystems and Star Choice will end up carrying at least 51 new services. Shaw is in partnership with Rogers for category two MSNBC Canada and is also behind the category two license for Bloomberg Television Canada. Assuming that Shaw and Star Choice will carry all three of Corus' category two channels as well as MSNBC and Bloomberg -- and then applying the rule the Commission wrote that says for every one "affiliated" category two service carried, distributors must carry five non-affiliated channels -- the two distributors must carry 25 additional category two services. Plus 21 category ones = 51. No wonder cable executives at last week's CCTA convention were saying 60 new services could be the eventual number launched this fall. So, how many will succeed? Well, that's another question entirely (and this doesn't even include the roster of 30 non-Canadian additions to the eligible satellite list that have been proposed and for which a decision is apparently coming in July).

YOU THINK WE'RE REGULATED? - Just when we all thought the Canadian broadcast industry was over-regulated, France's television regulators last month trumped us by actually ordering changes in a currently airing hit show! Citing a need for the preservation of human dignity (on television?!), the High Audiovisual Council ordered the network airing the country's top-rated show, "Loft Story", to change the game's rules to ease the psychological burden on contestants. For example, contestants are now to get daily time-outs, rather than being filmed 24-hours-a-day. Mounting debate In France over the program which aired daily on a small privately-held network and has broken viewership records, caused the changes as critics assailed it as trash TV, unworthy of the French airwaves. At one point over 60 protesters even attempted to storm the set in an industrial park north of Paris in order to "liberate the hostages" but security guards and riot police pushed them back. Loft Story began with six men and five women, all aged 20 to 29, sharing the loft in pursuit of a grand prize of a Cdn$500,000 house. The catch is that while the final man and woman left get the house, they must live in it together for six months after the show stops airing, with follow-up shows to come. Lofters as well as viewers vote out contestants over a 70-day period. And, in a real demonstration of touchy-feelyness, to help further "ease the psychological pressure" on them, the regulator "inverted the logic of the show," said its president, Domenique Baudis. "Instead of the voters asking, 'who do you want to kick out?' they have to ask, 'who do you want to keep?'" The station made the changes.

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