A financial dispute with a Canadian communications company has driven OUTtv to seek legal protection. Shaw Communications, a western cable and satellite company, had obtained a judgment allowing it to seize OUTtv’s cable subscription revenues.
On Jan 12, the gay cable channel submitted a Notice Of Intention (NOI) to file a proposal for restructuring under Canada’s Bankruptcy And Insolvency Act. The notice allows OUTtv to protect itself and its subscription revenue.
Bill Craig, the president of OUTtv, says the channel and its more sex-oriented sibling Hard On Pridevision, are struggling to build their business and Shaw’s actions were potentially disastrous.
“It requires patience and persistence. It’s not very helpful to have people like Shaw knocking us off course.”
According to Craig, Shaw is claiming OUTtv owes $25,000 a month for providing a feed to cable stations across Canada from their satellite service StarChoice. Shaw did not respond to Xtra by press time.
Many cable companies obtain their digital feeds from satellite services. Craig says OUTtv is now with Bell’s ExpressVu satellite service and that the channel’s contract with Shaw expired in February of last year. Craig adds that the expired contract was for only $19,000 a month.
Shaw obtained a judgment effective Jan 1 of this year allowing it to seize the money — 45 cents per subscriber per month — cable companies normally pay to OUTtv. Craig says Shaw seized $70,000 to $80,000 before OUTtv filed their notice. The channel’s appeal of the judgment is scheduled to be heard in February.
In the meantime, the NOI prevents Shaw from seizing further money, even amounts their own cable and satellite companies pay to OUTtv. It also compels all companies, including Shaw’s, to continue carrying OUTtv. The NOI leaves the running of the channel in the hands of its management and owners.
Craig says although the NOI was forced on the fledgling company by Shaw, it might prove to be beneficial. Craig says the company has been struggling with debt, much of it accumulated under the previous ownership. Craig and a consortium of gay investors (which includes Pink Triangle Press, the publisher of Xtra, as a minority investor) took over ownership of the channel, then called Pridevision, in July 2004. In 2005, the channel was divided into OUTtv and Hard. Hard is currently only available on Rogers digital cable in Ontario.
The NOI is an opportunity for the company to restructure that debt and move forward, says Craig.
“Hopefully, we’re going to kill two birds with one stone. The preponderance of our debts is from our previous companies. We’re still accumulating debt, but at nowhere near the same rate. We’ve cut expenses, but one of the things that’s suffering is programming.”
Under the NOI, a company has 10 days from the time of filing to provide financial statements to its creditors and 30 days either to provide a plan for repayment on terms that are accepted by a majority of the creditors or to request an extension.
“We sort of brought this on ourselves,” says Craig. “If we don’t create a plan that a majority of our creditors like, we’ll have to declare bankruptcy. If a majority accept the plan, the rest of our creditors will have to go along with that.”
Craig says that if the financial disputes are resolved, he’s confident about the future.
“We think there’s a good business here. And this time around, it’s owned by a group of gay individuals, who hopefully have more gumption.
“We’re seeing steady upgrowth every month, double digit sometimes. ”