There's this scene in the movie The Longest Day – after the Allies have stormed ashore at one of the least-protected parts of Nazi-occupied Europe – where a German general slaps his forehead.
"Normandy," he says. "How stupid of me."
Before yesterday, it didn't take acute psychic powers to know that some sort of big media deal was coming with BCE Inc.'s Bell Globemedia at the centre.
But now that we know the precise form of that deal, it still has its share of surprises. This is not, for one, a "convergence" play – to use a term that's mostly in bad odour these days – but "convergence lite."
Nor is there any guarantee that, as new technologies emerge, yesterday's co-mingling will endure for long, with BCE, Torstar Corp., the Thomson family's Woodbridge Co. Ltd. and the Ontario Teachers' Pension Plan all having stakes in a revamped Bell Globemedia.
BCE has been long under pressure – not least from the bond-rating agencies – to unload some or all of a 68.5 per cent stake in Bell Globemedia, holdings of which include The Globe and Mail newspaper and the CTV television network.
The rumoured suitors were numerous: from Gerry Schwartz's Onex Corp., perhaps backing up Corus Entertainment Inc., to Woodbridge, already a part-owner.
Instead, under the deal unveiled yesterday, Torstar and Teachers' will each pick up a 20 per cent stake in Bell Globemedia, while Woodbridge boosts its stake to 40 per cent from 31.5 per cent. BCE's interest will dip to just 20 per cent.
Torstar and Bell Globemedia were linked through workopo lis.com, the Internet careers advertising vehicle. And Torstar, parent of the Toronto Star, has spent the better part of a decade looking for a substantial way to get into the TV business. Through Bell Globemedia, Torstar now gets a financial stake in 15 specialty channels, including TSN, in addition to CTV.
That will broaden Torstar's media interests beyond its current key holdings, which also include the CityMedia Group of newspapers, the Metroland community papers and Harlequin, publisher of women's fiction.
But don't expect yesterday's deal to bring the sort of operational synergies and cost cutting that used to be trumpeted as the dreamy goal of convergence, in which diverse media properties, from newspapers to television and the Internet, work lock step under the same ownership.
As Torstar chief executive Robert Prichard told analysts yesterday: "It's very important to maintain the full independence, editorial and otherwise, of The Globe and Mail, as it is equally important to maintain the independent voice of each of our papers."
Instead, he talked about new ventures, and new media.
"As digital technologies and the Internet continue to shape the media landscape, we will explore new business development opportunities with Bell Globemedia in these areas."
That's a fair hike from the glory days of the convergence game, when everything was supposed to be thrown into the pot. In other words, back in 2001, when the likes of Leonard Asper, the president and chief executive officer of CanWest Global Communications Corp. could see almost limitless possibilities for leveraging existing media.
"In the future," he said, "journalists will wake up, write a story for the Web, write a column, take their cameras, cover an event and do a report for TV and file a video clip for the Web."
There was just one problem with convergence's promise: it always proved much trickier than advertised. Indeed, the poster boy of convergence, the AOL-Time Warner marriage, proved to be an unwieldy beast, spewing red ink.
For BCE, strangely enough, the deal may mark a kind of divergence, almost but not quite separating the expensive task of producing media "content" (at now-minority owned Bell Globemedia) from the secondary distribution of that content (through BCE's own Bell Mobility and Bell ExpressVu).
Michael Sabia, BCE's chief executive, told analysts that he was always keen on having access to the content churned out by Bell Globemedia. Next year, for instance, he hopes to be offering specialized "highlight packages" of CTV news and sports programming to Bell Mobility's wireless customers.
He just didn't want so much of BCE's money tied up in Bell Globemedia, which Sabia had deemed a "non-core" part of BCE's telecom portfolio. He needed, he said, a "capital lite" way of maintaining access to the content, something yesterday's deal provides.
"It's an interesting compromise between the two imperatives, the financial imperative and the need to stay active on the content side," said Jeff Leiper, a telecom analyst with Yankee Group.
Will the arrangement last?
Sabia insisted the deal isn't the first step in any exit strategy.
"We're a partner," he said. "We're very much interested in the future of this company. We'll be a full and active participant."
But Leiper's not so sure that will remain the case, especially as new wireless devices come on stream, the penetration of broadband deepens and the content demands of telecom players begin to expand.
"If there are problems with the partnership, I think they'll be evident within the first year-and-a-half," said Leiper. "If it becomes more difficult to push (BCE's) agenda because of the reduction in its stake, at that point BCE may want to re-evaluate its involvement."
