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Quebecor Media Inc. is asking the CRTC to establish a new regulatory framework to prevent the exclusive ownership of broadcasting rights for sports content, arguing that BCE Inc. is on the verge of holding a monopoly in the Quebec market.
"By preserving the status quo, BCE will hold a monopoly over the broadcasting rights of sports events in the French-language market that exists nowhere else in Canada," Pierre-Karl Peladeau, Quebecor's president and CEO, told the commission Thursday.
The CRTC is conducting public hearings this week about BCE's $3.2-billion acquisition of CTVglobemedia Inc.'s broadcasting assets.
The transaction will give BCE full ownership of sports stations TSN and RDS, which own the regional broadcasting rights to the Montreal Canadiens.
On Tuesday Bell told the commission that most of the content it will acquire will be available for purchase to competitors, but that it may reserve some content for exclusive distribution.
Peladeau told the commission Thursday that Quebecor is concerned about past comments from BCE president and CEO George Cope that indicated intentions to hold exclusive broadcasting rights to sports events of interest in the French-language market.
Peladeau quoted Cope during a September conference call with analysts where he said he did not have to offer TSN content to competitors.
Peladeau qualified Cope's comments as "alarming," adding that BCE owns a minority stake in the Canadiens.
"This raises important concerns over the eventual undue preference Bell could give itself following the acquisition, by giving its own services an advantage to the detriment of competitors," he said.
Peladeau argued that sports should not be exclusively distributed because it is unique and not reproducible. He added that holding the broadcasting rights to the Canadiens' hockey games will give BCE a competitive advantage in the Quebec market because Quebecers are particularly attached to the sport and the team.
Peladeau has repeatedly expressed an interest acquiring the broadcasting rights to a hockey team in Quebec. He has frequently stated intentions to return the Quebec Nordiques to Quebec City.
Last week, Peladeau confirmed Quebecor is in negotiations with the City of Quebec to build a stadium in anticipation of the team's return.
He has submitted to the city a formal proposal for a stadium, offering to contribute "tens of millions of dollars," but the company is not revealing details.
Peladeau told the commission it should adopt a regulatory approach where sports leagues are required to sell broadcasting rights in "lots" to different broadcasters to avoid one broadcaster holding exclusive rights.
Serge Sasseville, Quebecor's vice-president of corporate and institutional affairs, said in a brief interview following Peladeau's appearance that, under the company's proposed framework, sports leagues would sell the broadcasting rights to individual games rather than seasons.
"There could even be certain games that could be broadcast by several distributors," he said.
But Bell spokeswoman Jacqueline Michelis said by email Tuesday that Bell's rights to NHL and other sports content isn't related to the CRTC hearing.
Michelis said competitors have been free to try to win the rights to carry the content but were unsuccessful.
In a comment filed with the commission, Montreal Canadiens president Pierre Boivin said he supports BCE's acquisition of CTV, adding that the broadcaster allows millions of Canadians to watch the team"s games.
In a reply comment filed by Bell on Jan. 21, the company took issue with Quebecor's argument that sports content should not be exclusive because it is a one-time event.
Bell said many reality shows offered by Quebecor also feature episodes that are unique events, yet the company does not share that content with competitors.
Bell also said Quebecor previously made two attempts to gain rights to sports content in 2009 and 2010, but on both occasions was rejected by the CRTC.
On one of those occasions, Quebecor's TVA Group Inc. requested that the commission ensure its proposed new specialty sports service, TVA Sports, could acquire broadcast rights to a number of Canadiens games.
In February 2010, the commission said in a decision that it would not intervene in private deals between companies.
"The Commission is not convinced that it would be appropriate to intervene in existing private contractual relations. Accordingly, the Commission will not intervene with respect to exclusive broadcast rights for Montreal Canadiens hockey games and considers that it is preferable to rely on market forces," the commission wrote.
In response to Quebecor's comments Thursday, CRTC chair Konrad von Finckenstein said he understands Quebecor's concerns but added that the rules against undue preference are clear.
Richard J. Paradis, an instructor at the Universit" de Montreal's communications department and president of consulting firm Groupe CIC, said by email that Quebecor's position is understandable given that the broadcasting rights to the Montreal Canadiens is a lucrative asset in Quebec.
Paradis noted that broadcasting the team"s hockey games gives RDS "tremendous" ratings, approaching that of conventional broadcasters in the French-language market.
"However, season rights to broadcasting a team have always been up for grabs among broadcasters, and that is the way it has been for a number of years," he said.
Paradis said the commission's line of questioning appears to show a preoccupation with the exclusivity of programming on different platforms, but an official position on exclusivity probably will not be taken until after the CRTC's vertical integration hearing in June.
"I don't think the commission would get into the details of sports broadcasting rights. The commission usually deals with broad questions requiring regulation, and since there are more and more players in the sports broadcasting field, competition should probably prevail for the near future," he said.
On Wednesday, Telus Corp. told the commission it has filed a complaint against Bell concerning its exclusive distribution of sports programming from the NHL and NFL on its mobile services.
Telus said it has discussed the issue with sports leagues, which said they were open to providing sublicensing rights to Bell so that content could be made available to other carriers.
Source: The Wire Report, 02/03/2011
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