Canada's broadcast regulator has thrown a huge wrench into CTVglobemedia's $1.7-billion plan to take over CHUM Ltd.

The CRTC has told CTVglobemedia it will approve its acquisition of CHUM, but it must sell all five of the Citytv stations it also acquired in the deal.

It's given CTVglobemedia 30 days to file "an acceptable plan" to dispose of the Citytv stations. Possible buyers could include Rogers Media, Quebecor Media, Astral Media, Corus Entertainment, or perhaps Torstar Corp., the CBC's Mike Hornbrook reported. 

The regulator said allowing CTVglobemedia to hang on to the Citytv stations would violate its "common ownership" policy that prevents a broadcaster from operating more than one conventional television station in one language in a given market.

The Citytv stations are in Toronto, Vancouver, Edmonton, Calgary and Winnipeg — cities where CTV also runs television stations.

CTVglobemedia officials had argued during CRTC hearings that the Citytv stations were on financially shaky ground and needed the backing of the much bigger and richer CTVglobemedia group.

'The commission was not convinced by CTVgm’s arguments'— CRTC chair Konrad von Finckenstein

CTVglobemedia also pointed out that the CRTC had allowed CanWest Global to own two stations in several markets.

But in Friday's ruling, the regulator said it didn't buy CTVglobemedia's arguments.

"Some exceptions to the [two stations in one market] policy were granted in the past for failing stations in secondary markets," CRTC chairman Konrad Von Finckenstein said. "CTVgm asked for the exception using arguments based upon competitive equality and the impact of new media. However, the commission was not convinced by CTVgm’s arguments."

CTVglobemedia 'carefully reviewing' decision

However, the CRTC did say CTVglobemedia will be allowed to keep the six A-Channel stations that were part of the deal, as well as 20 other specialty TV channels and 34 radio stations.

In April, CTVglobemedia had offered to sell the A-Channel network and several other stations to Rogers Communications for $137.5 million. That sale was meant to allay competition concerns and was conditional on the CRTC approving the CHUM takeover.

CTVglobemedia issued a one-line statement following the ruling. "CTVglobemedia is carefully reviewing today's CRTC decision and will only comment after its review is complete," it said. There was no word on when that review would be done.

The Friends of Canadian Broadcasting lobby group, which had previously urged the CRTC to make the CHUM purchase conditional on the sale of the Citytv stations, said it welcomed the ruling.

"Today's decision is good for viewers, advertisers and competition and diversity in the Canadian broadcasting system," said Friends spokesman Ian Morrison. 

"The new chair of the CRTC is known to be concerned about letting markets operate and you don't get markets operating if you have just one big dominant broadcaster controlling everything," Morrison told CBC News Friday.