Corus says Rogers-Shaw deal would cause funding shortfall for local news stations

The new Corus logo at Corus Quay in Toronto on June 22, 2018.

Tijana Martin / The Canadian Press

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

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

In total, more than 300 interventions were submitted to the Canadian Radio-television and Telecommunications Commission, many in favor of the agreement. Rivals BCE Inc. and Telus Corp. ask the regulator to deny Rogers’ application, fearing that its share of the broadcast distribution market is too large.

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

The CRTC requires broadcast distributors – companies that broadcast cable, satellite or Internet protocol television channels – to devote 5% of their broadcast revenues to Canadian content and local news. To meet part of its funding obligation, Shaw pays approximately $ 12 million per year to Corus, the owner of the television and radio station he established as an independent entity in 1999 (although Shaw sold its 38% 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 that while its acquisition of Shaw goes ahead, it has no plans to continue payments to Corus’ Global News network.

“We are concerned that this decision will negatively impact the production and delivery of local news, including in markets such as Kelowna, Lethbridge, Saskatoon, Regina, Peterborough, Kingston, Saint John and Halifax, where Corus operates stations. local but not Rogers, ”Corus’s submission reads. “Already in a difficult financial situation, Global News can hardly afford to lose this support. “

The broadcaster asks the CRTC to review the way it allocates funding to local news providers.

“There has to be a rebalancing of support for local news in Canada,” said Troy Reeb, executive vice president of broadcast networks at Corus, in an interview. “If the CRTC does not act, it risks leaving Global News as the only major provider of broadcast news without the financial backing of the system, which will put it in a worse competitive position and also potentially threaten the continued delivery of local news to the public. many communities we serve, ”he added.

Ted Woodhead, senior vice president of regulatory affairs at Rogers, said the company plans to redirect 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 stays exactly the same, so we actually support diversity of voices,” said Woodhead.

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

“Allowing Rogers to control such a large proportion of [broadcast] subscribers, in combination with its current control of must-see programming, will have a negative effect on competition for Canadians [broadcasting distributors] and programming services, ”said Telus’s brief.

Mr Woodhead said the market share figures cited by Bell and Telus are irrelevant because they do not take into account foreign video streaming giants such as Netflix, Amazon Prime and Disney Plus which are gaining market share in the market. part of a growing trend in cord cutting. “This number of market shares is a complete illusion,” said Mr. Woodhead. “Bell has [previously] makes the exact same arguments.

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

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