TVP teams up with Canal+ on Cyfra+, but obstacles remain

According to the agreement, TVP will take a 10% stake of Canal+ Cyfrowy, the soon-to-be joint stock company that will manage the platform. TVP will also be able to eventually acquire 40% of the company's shares on "favorable conditions," according to a statement issued by the new partners. TVP is bringing its programming and viewer market share to the transaction and not putting up any cash for the 10% stake.
The new company will only move forward, however, if TVP manages to go around Treasury Minister Emil Wasacz, who went so far as to ban TVP from joining Cyfra+ at the broadcaster's last general shareholders meeting. TVP's owner, the Treasury Ministry, has balked at the idea of the national broadcaster joining any capital-intense digital platform and has taken issue with the idea of the national broadcaster providing its signal exclusively to any one platform. The ministry has said that TVP's mandate is to provide as much quality programming to all viewers, and that that goal does not jive with the broadcaster dabbling in the digital game.
Walter Chelstowski, a member of TVP's managing board, last week admitted that a possible stumbling block remained before Cyfra+ could come to life. "There is a condition, stipulated in the agreement, that it will come into effect only if the decision of Emil Wasacz, Treasury Minister and officially the owner of TVP, is suspended," he told the Business Journal.
In other words, Wasacz must do an about-face for the agreement to go ahead. Chelstowski said TVP is working to convince Wasacz that joining Cyfra+ is in the broadcaster's best interest and allows it to expand profit-making activities.
"But Wasacz's decisions are partisan, politically biased," he said. "The agreement with Canal+ is a good deal."
The long-awaited formation of Cyfra+ also opens up the possibility of other shareholders now coming on board. In addition, the move puts TVP firmly in Canal+'s corner in the battle over which digital television platform will conquer Poland. Analysts have said the market is only big enough for one platform, and right now Canal+ and Wizja TV, backed by @Entertainment, are vying for that spot. Having national broadcaster TVP and its programming is key to winning that fight. "Wizja TV has never offered us shares in a company which would operate their digital platform," Chelstowski told the Business Journal just hours after the agreement had been signed. "Canal+'s offer was simply more attractive."
Although the agreement does not prevent Wizja from possibly being able to air TVP's programming, TVP maintains the right to distribute its two public channels - TVP1 and TVP2 - and make them available to any operator of a digital platform licensed by the National Radio and Television Council (KRRiTV). The one condition is that TVP cannot enter into an agreement with any third party under conditions less favorable than those provided by Canal+.