biggest news you may not have heard: Corus/Astral Sale (New Update: Teletoon response)

By Mike Valiquette

This happened today: http://www.theglobeandmail.com/globe-investor/bce-to-sell-assets-to-corus-as-part-of-astral-deal/article9272784/

Bell Media, a huge Canadian media company, wants to buy Astral Media, another huge Canadian media company.

But some of the things they’re buying would create a monopoly, so Astral, eager to make the sale, are selling off a few odds and ends. Like Teletoon(and Cartoon Network Canada, and Teletoon Retro).

So who’s buying?

Corus.

Corus, who owns Nelvana, and YTV.

So now Corus will own Teletoon and YTV.

Whew. Close call federal regulators. Way to save us from a monopoly.

UPDATE: Teletoon had this to say:

As you may have heard, Corus Entertainment has entered into an agreement with Bell-Astral to purchase Astral’s 50 per cent ownership of TELETOON Canada Inc. Corus currently owns 50 per cent of TELETOON Canada and this purchase will make Corus Entertainment the sole owner of TELETOON Canada Inc. and its five English- and French-language networks. This announcement follows Bell’s decision to divest some of its assets including its 50 per cent ownership in TELETOON Canada Inc. in order to comply with regulatory policy.

We are very excited about this new development which is very positive for the future of TELETOON Canada. Corus Entertainment is the most natural and suitable acquirer for TELETOON Canada and TELETOON Canada already shares many services with Corus including English advertising sales and master control.

The transaction will have to go through the standard regulatory process and will only be complete, once approved by the CRTC and Competition Bureau.

At this time, we do not have precise timing on the expected completion of the transaction. Until the transaction is complete, TELETOON Canada will be operating business as usual and our level of service and commitment to our viewers, clients and customers remains unchanged.

We thank you for your continued support.

Here’s the full press release:

Corus Entertainment Expands Interests in French-language Specialty Television Market through Major Deals with Bell and Shaw Media

Acquisitions include TELETOON, Historia and Series+; Ottawa-based Radio Stations CKQB-FM and CJOT-FM; and ABC Spark

(Toronto, Canada) – Corus Entertainment Inc. (TSX: CJR.B) announced today that it has entered into a number of agreements with Bell and separately with Shaw Media, that extends Corus’ portfolio of Radio assets into Ottawa, consolidates Corus’ ownership of ABC Spark and TELETOON, and enables Corus to become a significant media contributor in the Québec and the French-language specialty television market.

Corus has reached an agreement with Bell to acquire the 50% remaining ownership interest in TELETOON and two Ottawa-based radio stations, CKQB-FM (The Bear 106.9) and CJOT-FM (boom 99.7), that Bell will acquire as part of the acquisition of Astral Media Inc. pending regulatory approval. With these acquisitions, TELETOON, Télétoon (French), TELETOON Retro, Télétoon Rétro (French), Cartoon Network (Canada) and radio stations, CKQB-FM and CJOT-FM, will be wholly owned by Corus. In addition, Corus has reached an agreement with Bell and Shaw Media to acquire each of their respective 50% interests in the French-language specialty channels Historia and Séries+. Certain transactions are subject to approval by the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau.

In a separate transaction, Corus has entered into an agreement with Shaw Media that will result in Corus acquiring the remaining 49% interest in the successful specialty television service ABC Spark from Shaw Media. As part of the agreement, Corus will sell its 20% interest in Food Network Canada to Shaw Media.

“These transactions represent a transformative opportunity for Corus,” said John Cassaday, President and Chief Executive Officer, Corus Entertainment. “The consolidation of TELETOON and the addition of the popular services Historia and Series+ give Corus the scale to expand into the growing French-language specialty television market. As a well-capitalized company, Corus can contribute to the growth of this market and provide new opportunities for the production community, while adding greater diversity to the system and more choice to French-speaking audiences.

The addition of the Ottawa radio stations, CKQB-FM and CJOT-FM, has been a long-standing goal and allows us to bring our skills and passion for radio to another major Canadian market, while delivering exceptional programming and local information to the Ottawa community. Finally, full ownership of ABC Spark, based on the highly successful ABC Family channel in the U.S., and now widely distributed across Canada, represents an excellent growth opportunity for Corus.”

The combined acquisition price for these assets is $494 million Cdn. The overall transaction is valued at an LTM EBITDA multiple of 10.4x.

A conference call with Corus senior management to discuss these transactions is scheduled for Tuesday, March 5, 2013 at 8:30 a.m. ET. While this call is directed at analysts and investors, members of the media are welcome to listen in. The dial – in number for the conference call for North America is 1.800.926.5230 and for local/international callers is 416.981.9020. PowerPoint slides for the call will be posted 15 minutes prior to the start of the call and can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

About Corus Entertainment Inc.
Corus Entertainment Inc. is a Canadian-based media and entertainment company. Corus is a market leader in specialty television and radio with additional assets in pay television, television broadcasting, children’s book publishing and children’s animation. The Company’s multimedia entertainment brands include YTV, Treehouse, Nickelodeon (Canada), ABC Spark, W Network, OWN: Oprah Winfrey Network (Canada), CosmoTV, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press, Toon Boom and 37 radio stations including CKNW AM 980, 99.3 The FOX, Country 105, 630 CHED, Q107 and 102.1 the Edge. Corus creates engaging branded entertainment experiences for its audiences across multiple platforms. A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B). Experience Corus on the web at www.corusent.com.

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9 Responses to “biggest news you may not have heard: Corus/Astral Sale (New Update: Teletoon response)”

  1. dainty

    That’s nuts!

    #67815
  2. Simon

    Don’t forget about Treehouse. Corus owns that too.

    #67816
  3. The following is from Wikipedia (http://en.wikipedia.org/wiki/Teletoon_%28Canada%29):

    “Licensed in 1996 by the Canadian Radio-television and Telecommunications Commission (CRTC), the channel was launched on October 17, 1997 with the first episode of Caillou. It was owned by a consortium made up of various other Canadian specialty services and producers; The Family Channel Inc. acting as managing partner at 53.3% (Astral Media & WIC), YTV Canada Inc. at 26.7% (Shaw Communications), along with Cinar and Nelvana with 10% each. Through various acquisitions over the years, ownership resulted in Astral Media and Corus Entertainment each owning a 50% stake in the service.[1]”

    Note that in the beginning, animation producers (Nelvana and Cinar) owned only 20% of Teletoon. The fear among the animation community at the time was that it was going to be difficult for other studios to sell shows to Teletoon if it was monopolized by Nelvana and Cinar.

    Over the years, Cinar turned into Cookie Jar, but apparently no longer has a stake in Teletoon. Nelvana was bought by Corus. Before this latest sale, Corus and Astral each owned 50% of Teletoon (http://www.crtc.gc.ca/ownership/eng/cht159.pdf). With this sale, Corus now owns 100% of Teletoon.

    The question is whether there is a CRTC policy or a Corus policy to preserve some percentage of new programming for companies other than Nelvana and whether this policy will be enforced.

    TV is already a medium losing its audience to the internet. License fees keep dropping because the audience is shrinking, and so channels can’t charge advertisers as much as they did in the past.

    Is it worth it for independent studios to try to sell to Teletoon? Between the Corus monopoly and falling license fees, would a studio be better off trying to establish a property in some other way and treat TV as an aftermarket? That would require a change of business plan for studios and the way that they are organized. Will studios do it?

    I haven’t got the answer to that, but there’s no question that the ground is shifting. I expect that the animation world in Canada is going to look very different for everyone (with the possible exception of Nelvana) in the next five years.

    #67820
  4. But Corus already owns all three. Corus’ television services include the kids brands YTV, Treehouse, Nickelodeon (Canada), TELETOON (50%) and TELETOON Retro (50%). It’s been that way for years. I’ve always wondered why no one finds this odd. Maybe like me, they don’t want to spend their time at CRTC hearings.

    #67823
  5. We do find it odd, and yes, Corus has always had a stake in the Teletoon family of channels, but this new sale would give them full ownership.

    #67826
  6. brett

    Monopolies are never good for business, and since most of canadian animation is based on tax credits (which require a canadian broadcaster to be eligible for), if I was a competitor of Nelvana, I’d be a little bit nervous that Corus/Nelvana now owns most of the relevant animation broadcasters.

    #67828
  7. Rob B

    It almost seems insane to me that one single company would pretty much control the entire Canadian animation industry. Kinda scary.

    #67835
  8. Ron

    …and absolute power corrupts, absolutely.

    #67836
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