Selling Out Canadian Resources

Critics warned that allowing CanWest Global to partner with US based investment bank Goldman Sachs Group to buy out Alliance Atlantis would undermine the Canadian film and television industry. Now, only months after the deal was approved by the Canadian Radio-Television and Telecommunications Commission (CRTC), those predictions are coming true.

Goldman Sachs is selling the international rights to some of the best know Canadian films and television shows to U.S. based Echo Bridge Entertainment. Among the 5,500 hours of programming and 7,500 titles are the popular TV shows Due South, Da Vinci’s Inquest, and Degrassi: The Next Generation, and included in the films are Crash, Black Robe, and Ararat.

These films and TV programs are the direct result of tens (if not hundreds) of millions of dollars of direct investment by Canadian taxpayers as well years of preferential regulatory treatment of Alliance Atlantis – all in all, a huge public investment. This investment was originally designed to pay dividends to the Canadian public. It was supposed to generate profits that would be pumped back into the Canadian film and television industry, profits that would be reinvested in more quality Canadian entertainment products.

But that plan has gone south.

Not only does this mean that Goldman Sachs’ shareholders will immediately reap the benefits of the largesse of Canadians, but also that the future profits generated from these films and programs will now flow into the pocket of an American company.

In the larger scheme of Canadian film and television, it is a double irony that not only do Canadian conventional television broadcasters spend more on foreign programming than Canadian programs, but now even the profits from Canadian programs will flow south of the border.

It seems obvious that a foreign owned investment bank such as Goldman Sachs would have little interest in actually producing Canadian film and television products. That, instead, their interest would be to get the most out of their investment, which often means breaking up the companies they purchase and selling the pieces to the highest bidder. But this fact seems to have escaped regulators, in this case the CRTC. The result is that the product of millions of dollars worth of public investment in both cash and regulatory privileges have been plundered in the interest of short term profits – profits that will flow out of the country instead of back to the original “investors,” the Canadian public.

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http://www.theglobeandmail.com/servlet/story/LAC.20080408.RALLIANCE08/TP...
http://www.variety.com/article/VR1117983490.html?categoryid=18&cs=1