Quebecor CEO recommends rejection of BCE-Astral deal

Serge Sasseville, vice President, corporate and institutional affairs for Quebecor Media inc.,...

Serge Sasseville, vice President, corporate and institutional affairs for Quebecor Media inc., Pierre Karl Peladeau, president and CEO of Quebecor, and Robert Dépatie, President and CEO of Videotron Ltd. at a CRTC hearing at the Congress Centre in Montreal, Quebec, September 11, 2012. (PHILIPPE OLIVIER CONTANT/QMI AGENCY)

Michel Munger, QMI Agency

, Last Updated: 5:19 PM ET

MONTREAL -- Pierre Karl Peladeau, president and CEO of Quebecor Inc., told Canada's broadcast watchdog that BCE Inc's bid to buy Astral Media creates a bad precedent and should be rejected.

Peladeau, whose company owns QMI Agency and Sun Media, told the CRTC hearings on Tuesday that a BCE-Astral deal would create a near-monopoly and a "point of no return" for telecommunications and broadcasting in Canada.

Montreal-based BCE, parent company of Bell, wants to buy multimedia company Astral for $3.4 billion.

"The proposed transaction includes a staggering number of precedents that no other Western country, conscious of diversity, competition and democracy, will have faced," Peladeau told a hearing at the Montreal convention centre.

He noted that Bell was founded as a monopoly and operated as such for more than 100 years "with a broadcasting core approaching the concentration threshold of Silvio Berlusconi's Mediaset conglomerate in Italy."

Bell says the Astral deal would give it control of less than the maximum 35% English-language market share decreed by the CRTC. But a monitoring report by the broadcast watchdog reports a figure of 39.7%.

In announcing the proposed deal earlier this year, Bell specifically mentioned Quebecor, which has a 30% share in the French media market.

Peladeau countered that Bell's size, strength and scope puts competitors such as Quebecor at a strategic disadvantage.

He used the example of Bell's TSN sports channel, which won Canadian broadcast rights to the prestigious Masters golf tournament.

Armed with the English rights, Peladeau said TSN requested that its sister channel RDS be given French broadcast rights, leaving Quebecor's TVA Sports channel out in the cold.

"TVA Sports has lost the rights to broadcast the Masters but we didn't even get the opportunity to negotiate anything," Peladeau told the CRTC.

News of the BCE-Astral deal earlier this year prompted Quebecor, Cogeco and Eastlink to launch a "Say No to Bell" joint campaign.

They have received support from Rogers, Telus and the Canadian Cable Systems Alliance (CCSA), who say the proposed transaction is not in the best interest of consumers and would be bad for competition. Four consumer groups have also banded together to oppose the merger.

Bell executives testified Monday that the Astral deal would give consumers more Canadian content but Peladeau disagreed.

He said he was worried that Bell would restrict certain content to its 7.5 million wireless subscribers, shutting out Canadians who hold data plans with competitors.

Peladeau cited recent exclusive distribution deals for the Summer Games in London, as well as Montreal Canadiens packages that he said were only available to Bell wireless clients.

The Quebecor boss added that with a market share approaching 80% in certain specialized areas, "Bell might starve traditional broadcasters who have, as you know, only one source of revenue: advertising."

The CRTC will rule on the BCE-Astral deal in October following the public hearings.

Quebecor boss uses colourful language during CRTC hearing

Quebecor executives didn't hesitate to use colourful language as they decried the proposed BCE-Astral deal.

"Once the omelette is made, you can't separate the eggs," said president and CEO Pierre Karl Peladeau, when asked whether a competed deal could ever be undone.

Later, speaking to reporters, Peladeau said Bell would rather buy Astral without selling any of its own TV channels.

"Bell President George Cope said 'take it or leave it, radio, TV English and French, as well as billboards.'"

Peladeau also used strong words when describing the potential impact of a BCE-Astral deal on the advertising market.

"We'll weaken our ability to pay for programming because we'll have a monster in front of us that will literally kill activities," he said.

Pierre Dion, president of Quebec's French-language TVA division, said Bell doesn't like competition and wouldn't hesitate to eat a temporary loss if it meant eliminating a competitor.

"If it's to lose 10 cents on one side and make a buck on the other, the proposal is interesting for Bell," said Dion.

Speaking about leverage Bell would hold against independent producers, Dion added "the lemon would be squeezed to the maximum."

Peladeau argued that Bell is already pulling the strings at Astral even though the deal isn't done.

"It's as if we're negotiating with Bell," he said of recent meetings with Astral. "Astral decisions are, in the end, being made by Bell executives."