TV stations no longer a licence to print money

Do you have any memories of KCND-TV or the early days of CKND-TV, either as an employee or as a viewer? Or any anecdotes to share about the personalities mentioned below? Please share them in the comments section or e-mail them to theviewfromseven@gmail.com, as they would be an important and valuable contribution to maintaining a written history of local television in Winnipeg and the Red River Valley.

Next week, the power brokers of the Canadian television industry will be gathering in Gatineau, Quebec to tell the government agency responsible for regulating the public airwaves what broadcasters need to survive.

The Canadian Radio-Television and Telecommunications Commission — better known as the CRTC — is used to hearing broadcasters tell them about threats to their viability. It has long been a tradition for existing broadcasters to tell the Commission of their concerns about “audience fragmentation” whenever a new TV or radio station sought a licence.

But this year’s talk of financial woes in the television industry have taken on a more urgent tone. Winnipeg-based media giant Canwest Global is fighting desperately to avoid bankruptcy. Meanwhile, the awkwardly named CTVglobemedia has put CKX-TV in Brandon up for sale, warning that Manitoba’s only non-Winnipeg-based TV station will shut down on Aug. 31, 2009 if no one buys it.

As Canwest itself noted in a Feb. 23 letter to the CRTC:

“For perspective, between 2004 and 2008, annual operating profit [for Canwest’s conventional TV stations] declined by $100 million (from $113 million to $13 million). Even with the proposed changes to our licences, our financial projections show that these conventional television stations will post negative operating income in Broadcast Year 2010.”

So much for the famous quote attributed to Canadian business tycoon Roy Thomson, describing the fabulous profits made by early TV stations: “Running a commercial television station is like having a licence to print money.”

Not anymore, Roy.

And it shows how far we’ve come from those heady days 35 years ago, when a hastily assembled group of men were ready to do all sorts of things to get once of those valuable TV licences.

The path to where Canwest is today started on June 28, 1973. It was election night in Manitoba, and after putting up a spirited campaign, Liberal Party leader Izzy Asper was reconciling himself to the fact that he was not going to be the Premier of Manitoba.

He hadn’t even come close. The Liberals finished the election in third place, with just 19 percent of the vote and a mere five of the 57 seats in the Legislature.

Not eager to hang around the Legislature for another four years as leader of a third-place party with little hope of gaining power, Asper began looking for other career options.

As legend has it, Asper’s assistant Peter Liba — later Lieutenant-Governor of Manitoba — was reading the newspaper one day, when he spotted an interesting advertisement. The CRTC was seeking applications for a new TV station in Winnipeg. He showed it to his boss.

Asper was sold on the idea.

So too was Stuart Craig. He was the president of Western Manitoba Broadcasters, Ltd., the parent company of CKX-TV in Brandon. Craig and his associates prepared an application.

He then made the mistake of calling Paul Morton, a Winnipeg businessman who Craig thought might be helpful in starting a new station in the province’s largest city. Morton asked to see a copy of Craig’s still-confidential CRTC application, and Craig obliged.

The problem was, Morton was also in touch with Asper. Soon, Morton was on the Canwest Broadcasting team, a start-up company that was now competing with Western Manitoba Broadcasters for the Winnipeg licence. And Morton knew the intimate details of the other team’s application.

However, Canwest still had a problem to deal with. The Brandonites had two strong points in their application that would impress the CRTC: Their twenty years’ experience in running a TV station, and a proposed schedule that would feature heavy local content.

Canwest’s team had much less experience, and Asper himself was being kept out of the CRTC’s sight as he was still a member of the provincial legislature.

So, they came up with a bold plan that had never been tried before, but that might just impress the CRTC.

In the late ’50s, a group of American investors took note of the fact that while TV viewers in Fargo, N.D. had multiple TV stations to choose from, viewers in the much larger Winnipeg market had no choice: the CBC ran the only television station in town.

As foreign ownership of TV stations was (and still is) outlawed in both Canada and the U.S., the investors decided to do the next best thing. They would start up a TV station in the tiny border town of Pembina, N.D., and aside from producing some nominal local programming, run it as though it were a Winnipeg TV station, complete with offices on Portage Ave.

Their station, known as KCND-TV Channel 12, went on the air on Nov. 7, 1960 from a quarter-mile high tower located a mere 1,800 feet south of the Canada-U.S. border — roughly the distance between The Bay and Mountain Equipment Co-Op in downtown Winnipeg. They literally couldn’t get the tower any closer to Winnipeg if they tried.

By the ’70s, the vast majority of KCND’s revenues were coming from Winnipeg advertisers, even though KCND didn’t have the Winnipeg rights to the programs it bought. The Asper team knew that KCND’s practices were a thorn in the CRTC’s side.

Thus, Canwest proposed to buy out and shut down KCND, move the station across the border to Winnipeg, and launch a new station. With an existing staff and clientele in Winnipeg, the station would have an experienced staff from day one and would quickly become profitable.

Asper entered into negotiations with Gordon McLendon, the eccentric Texas millionaire who had owned KCND since the mid-’60s. He would later remember his negotiations with McLendon as being some of the toughest in his long career. Not to mention the fact that he arrived at McLendon’s ranch to find the Texan roasting an entire cow for dinner.

Eventually, McLendon agreed to sell.

It was a bold move that immediately positioned Canwest as the front-runner when the CRTC arrived in Winnipeg in May 1974 to hold public hearings on who should be given the new TV licence.

Then, everything nearly fell apart.

The Canwest team had co-opted Jerry Johnson, KCND’s Winnipeg manager, to help design a proposed schedule for the new station. Johnson knew that the CRTC would be looking for Canadian content, and ensured that the schedule had plenty of it.

Rejecting this, they asked Johnson to redo the schedule with more lucrative American programming. This schedule was then presented to the CRTC.

Brandon’s Stuart Craig and Western Manitoba Broadcasters was suddenly back in the game when their proposed schedule, with much more Canadian and local content than Canwest’s, was unveiled. Jerry Johnson had been proven right.

And then Craig dropped a bombshell, revealing that John Boler, the owner of CBS affiliate KXJB-TV in Fargo, was already planning to start a new station in Pembina if Canwest shut KCND down. Canwest’s application, based on the premise that the new station would face no competition from Pembina, suddenly seemed to be based on a questionable assumption.

The Canwest team brushed off Boler’s proposed new station, but used a more bizarre tactic to deal with the Canadian content problem. They went back and obtained Johnson’s original schedule, loaded with the Canadian content he knew the CRTC was looking for. Ordering Johnson to remain in a hotel room, the Canwest group then went back to the CRTC with Johnson’s original schedule — and proceeded to blame Johnson (of all people) for preparing a schedule with too little Canadian content, while the accused was conveniently unable to defend himself.

Canwest had recovered from a fumble, albeit in a way that might strike some as not being very nice.

By the end of 1974, Canwest had won the licence, defeating both Western Manitoba Broadcasters and a poorly financed cooperative group that never really had a chance.

KCND says goodbye, 1975

KCND says goodbye, 1975

On Aug. 31, 1975 at 9 p.m., cable subscribers in Winnipeg saw KCND’s channel 12 signal disappear as CKND signed on for the first time. Little did they know that they were witnessing the birth of a broadcasting empire that would extend to Chile, Australia and the U.K.

CKND prepares to sign on

CKND prepares to sign on

Eventually, the Craigs of Brandon would win the Winnipeg licence they wanted so much, with 13 MTN (later known as “A-Channel” and now as “Citytv Winnipeg”) going on the air in October, 1986. And Boler would get an FCC licence to launch a Pembina TV station, initially under the call letters KWBA-TV, by November 1979. However, the project would remain stalled for another six years before Boler’s Pembina station, by this time known as KNRR-TV, finally signed on in January 1986.

However, neither of them would prevent CKND from being a success for many years, financially and in the ratings.

For a while, having a commercial TV licence really did seem like having a licence to print money. The sort of thing that might justify partaking in tough negotiations, sequestering a man whose good advice was not heeded in a hotel room, and witnessing a cow being roasted by a strange Texas millionaire.

Next week’s CRTC hearings in Gatineau will show us just how far we’ve come from those days.


Related links:

YouTubers help keep Winnipeg television history alive

A collection of six posts about KCND Pembina on St. Vincent Memories

BibliographyCanadian Communications Foundation, Television Station History: CKND-TV Winnipeg
Herschel Hardin, Closed Circuits: The Sellout of Canadian Television (Vancouver: Douglas & McIntyre, 1985)
Allan Levine, The CanWest Global Story: The First Twenty Years, 1977-1997 (Winnipeg: CanWest Global Communications, 1997)
Peter C. Newman, Izzy: The Passionate Life and Turbulent Times of Izzy Asper, Canada’s Media Mogul (Toronto: Harper Collins, 2008)
Chris Wood, Live to Air: The Craig Broadcast Story (Vancouver: Douglas & McIntyre, 2000)

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About theviewfromseven
A lone wolf and a bit of a contrarian who sometimes has something to share.

One Response to TV stations no longer a licence to print money

  1. theviewfromseven says:

    A note received by e-mail from Diane Higdem (dhigdem@hotmail.com) on Dec. 1, 2011:

    Hello!

    Many years ago, my dad was hired by KNOX TV in Grand Forks, and was later
    assigned to be the station manager at the soon to be station, KCND in
    Pembina. He is now 79, and suffering from Parkinson’s. My mom, who he’d
    married in 1956 while in Grand Forks, died last May. Dad’s having a rough go
    of it, and in several recent conversations, he revealed an interesting
    story: when he was going to college and needed a job, he applied to KNOX TV
    out of Grand Forks in 1955. He married mom (whose dad was Police Chief in
    Grand Forks, Richard Jagd) in 1956, and in 1958, when KNOX decided to
    provide television to Canada, which at that time, depended on the BBC for
    TV, a satellite station in Pembina was created, KCND TV. Dad was transferred
    there to be the station manager. He helped design and oversaw the building
    of the station, including channels below the flooring (which was comprised
    of 8″ square metal plates) to accommodate the cords for the cameras and
    such. He also spoke of the tower that at that time was the nation’s tallest.
    He was quite good, and regularly commended for his work as a camera man at
    KNOX, but as a station manager, he didn’t do so well, and was fired in 1960.
    While at KCND, he and several of his crew had worked up a deal in which
    Barney’s Ball Lake Lodge in Ontario would trade out a trip to their fly-in
    access only lodge for fishing if dad would create a segment about the place.
    Film clips were made, and then voice-over was added.

    Now, as he is getting older and more debilitated by Parkinson’s, he said
    that his life would come full circle if he could go back to Barney’s.
    However, the original lodge and buildings no longer exist (although there is
    another one on the lake that goes by the name Ball Lake Lodge.) My two
    brothers and I would like to present him with a gift of a fishing trip to
    the existing lodge, along with his best fishing buddy from Montana. Along
    with that, we are looking for memorabilia that tags along with his time at
    KNOX and KCND. We have an old black and white of him behind the camera, but
    that’s all. I have found some old postcards online, as well as matchbooks,
    but would really like to find more personal items; most importantly, that
    clip he did at Barney’s. Is it even possible that it is stored somewhere?
    Or, perhaps, some archived paperwork or pictures of him from KNOX. anything!
    His name is Melvin Gene Higdem, and goes by Gene.

    Thanks!-

    Diane

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