Do U.S. bankers control Canadian TV empire?

OTTAWA – The New Democratic Party is asking whether a major Canadian media empire is being allowed to slip into American hands. In a letter to the CRTC, the NDP’s Heritage Spokesman Charlie Angus said the CRTC must consider whether CanWest is abiding by the rules of the Broadcast Act which puts clear limits on foreign ownership.

The letter was sparked by recent speculation that majority stakeholder Goldman Sachs may be looking to increase their operational control of the beleaguered media giant. In a letter to CRTC Chair Conrad von Finckenstein, Angus wrote:

“Serious questions must be raised about whether CanWest is already violating Canada’s limits on foreign ownership… The issue of whether a major Canadian broadcasting licensee is already under the effective control of a non-Canadian must be addressed by our federal regulator.”

Angus says if CanWest goes under during bankruptcy protection, Canadian media outlets will fall under U.S. control.

“If CanWest does not survive the current bankruptcy process, key assets such as its various television and newspaper assets would end up being fought over by U.S. interests – entirely contrary to the express directions of Parliament.”

Under its 2007 deal for the Alliance Atlantis licenses, Goldman Sachs was given 65% of the total equity, 33% of the voting shares and 67% of the non-voting shares in the final transaction. In 2011, all of CanWest’s over-the-air stations fall under the Alliance deal.

Angus says the situation has been caused by the CRTC’s longstanding refusal to address media concentration that has led to overleveraged giants like CanWest becoming dependent on U.S. equity.

“There is nothing wrong or outdated with Canada’s broadcasting regulations. The only problem we have had is the failure of the CRTC to act in the public interest. The CanWest crisis is the direct result of a see-no-evil, hear-no-evil approach by the CRTC to endless media buyouts that have left these companies overleveraged. The CRTC cannot sit back now and allow a Canadian media empire to slip into U.S. hands.”