TORONTO — Two of the television stations that Canwest Global Communications Corp. (TSX:CGS) is trying to sell have found a buyer. But the future of Red Deer-based CHCA remains uncertain.
Specialty television company Channel Zero of Toronto announced Tuesday that it plans to buy CHCH-TV in Hamilton and CJNT-TV in Montreal from struggling Canwest. The deal is subject to certain conditions and will be done through an affiliate of Channel Zero Inc., owner of short-film channel Movieola and Silver Screen Classics.
Like CHCA, both of the Canwest stations being sold operate under the E! Channel brand and show popular U.S. television shows. However, the new plan will scrap those shows in favour of mostly news programming from a regional perspective on CHCH-TV, followed by movies in prime time and overnight.
Canwest hasn’t announced any deals involving CHCA or its other E! channels in Kelowna, B.C. and Victoria. All are expected to close by Sept. 1 if they haven’t found a suitor.
Channel Zero’s unexpected purchase comes as major Canadian broadcasters like CTV and Canwest bemoan their over-the-air television stations saying that the model is broken and that many of their stations are unprofitable.
Cable company Shaw Communications Inc. (TSX:SJR.B) called their bluff in May by offering to buy three of CTV’s local TV stations for $1 each, saying that it could squeeze a profit out of them. However, the company reneged on its offer Tuesday without publicly providing any reasons.
The CRTC is expected to outline the details next week of a Local Programming Improvement Fund, which is aimed at funding stations with markets catering to fewer than one million people. That could give local TV a notable financial hand that could save some of the struggling operations.
Cal Millar, Channel Zero’s vice-president and general manager, defended his company’s decision to buy conventional TV operations.
“I’d agree with you if you said conventional broadcasting is a tough go of it, but (with) over-the-air, it depends what you’re broadcasting — it depends to whom you’re relevant,” he said.
One of Channel Zero’s conditions is that unionized employees at CHCH agree to a renewed collective agreement, which would maintain all current provisions of the labour contract except for changes to pensions and benefits.
Canwest didn’t provide specifics on what changes to pensions and benefits would be required.
Assuming the conditions are met and the deal gets approval from the federal broadcast regulator, Channel Zero would offer employment to all of the current employees at CHCH and CJNT.
The deal marks the latest sale for Canwest, the Winnipeg-based media company that has been treading water while struggling to refinance its large $4 billion debtload.
On Tuesday, Canwest extended its deadline to reach an agreement in principle with certain key creditors in principle on a long-term recapitalization until July 17. The company much reach a definitive agreement by July 31.