Corus says Rogers-Shaw deal would cause funding hit to local news stations

Corus Entertainment Inc. says the proposed acquisition of Shaw Communications Inc. by Rogers Communications Inc. would have a “detrimental impact” on local news production, as annual payments from Shaw to Corus’s Global News television network would stop.

Corus’s concerns about a funding hit to local news stations are outlined in documents filed last week with Canada’s telecom regulator, which is reviewing the transfer of broadcasting assets associated with Rogers’s acquisition of Shaw, valued at $26-billion including debt.

In total, more than 300 interventions have been submitted to the Canadian Radio-television and Telecommunications Commission, many of them in favour of the deal. Rivals BCE Inc. and Telus Corp. are asking the regulator to deny Rogers’s application over concerns that its share of the broadcasting distribution market would be too large.

In addition to the CRTC, two other regulators – the Competition Bureau and the Ministry of Innovation, Science and Economic Development – are reviewing the acquisition.

The CRTC requires broadcast distributors – companies that deliver television channels through cable, satellite or internet protocol networks – to contribute 5 per cent of their broadcasting revenues to Canadian content and local news. To fulfill part of its funding obligation, Shaw pays roughly $12-million a year to Corus, the television and radio station owner it spun out as an independent entity in 1999. (Although Shaw sold its 38-per-cent stake in Corus in 2019, the CRTC considers the two companies to be affiliated because both are controlled by the Shaw family.)

In a document filed with the CRTC in July, Rogers said if its acquisition of Shaw goes forward, it does not plan to continue the payments to Corus’s Global News network.

“We are concerned this decision will have a detrimental impact on local news production and delivery, including in markets like Kelowna, Lethbridge, Saskatoon, Regina, Peterborough, Kingston, Saint John and Halifax, where Corus operates local stations but Rogers does not,” the submission from Corus reads. “Already in a difficult financial situation, Global News can ill-afford to lose this support.”

The broadcaster is calling on the CRTC to revisit how it allocates funding to local news providers.

“There needs to be a rebalancing of support for local news in Canada,” Troy Reeb, executive vice-president of broadcast networks at Corus, said in an interview. “If the CRTC doesn’t act, it risks leaving Global News as the only major broadcast news provider without financial supports from the system, and that will put it in a worse competitive position and also potentially threatens the ongoing provision of local news to the many communities that we serve,” he added.

Ted Woodhead, senior vice-president of regulatory affairs at Rogers, said the company plans to redirect the funds that would have gone to Global to the local news divisions of its City TV channels in Western Canada. “The total amount of funding within the system remains exactly the same, so we are in fact supporting diversity of voices,” Mr. Woodhead said.

Telus and BCE’s Bell Canada, meanwhile, argue that if Rogers is permitted to acquire Shaw’s broadcasting distribution business – which includes a satellite TV service called Shaw Direct and cable networks in British Columbia, Alberta, Saskatchewan, Manitoba and Northern Ontario – it would control 47 per cent of the English-language broadcasting distribution market.

“Permitting Rogers to control such a large proportion of [broadcast] subscribers, in combination with its existing control of must-have programming, will have a negative effect on competition for Canadian [broadcasting distributors] and programming services,” Telus’s submission states.

Mr. Woodhead said the market share figures Bell and Telus are citing are irrelevant because they don’t take into account foreign video streaming giants such as Netflix, Amazon Prime and Disney Plus that are gaining market share amid a growing trend towards cord-cutting. “That market share number is a complete illusion,” Mr. Woodhead said. “Bell has [previously] made these exact same arguments.”

The CRTC will hold a public hearing on the matter on Nov. 22.

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