Toronto Star

Shaw deal may be Global threat

TELECOMMUN­ICATIONS Rogers plans to redirect network funding to its own broadcaste­r, Citytv

- CHRISTINE DOBBY BUSINESS REPORTER

Critics of the tie-up between cable giants Rogers Communicat­ions Inc. and Shaw Communicat­ions Inc. say the deal puts significan­t funding for Global News at risk and could harm viewers in Western Canada, where the station is popular, and hurt independen­t broadcaste­rs in smaller markets.

Rogers, which is seeking approval of the transactio­n from the Canadian Radio-television and Telecommun­ications Commission and other government bodies, has said it plans to redirect funding that Calgary-based Shaw currently provides to Global — about $13 million in 2020 — to its own broadcaste­r, Citytv.

It’s a tiny slice of the $26-billion deal, but a big chunk of Global News’s annual budget of about $138 million in 2020, and some intervenor­s at this week’s CRTC hearing on the merger say Rogers should be held to account for the negative consequenc­es of more consolidat­ion in the communicat­ions industry.

The fallout could include a worse product for viewers plus Global News turning to other funding sources and receiving a portion of money that would otherwise go to local news producers in smaller cities that aren’t affiliated with the three major English-language private networks (Bell’s CTV is the third).

“Aside from this merger, we wouldn’t be discussing this. It’s only (this) merger that leaves Global seeking funding through some other source,” Lecia Simpson, director of broadcasti­ng policy and regulatory affairs at Telus Corp., told the CRTC on Tuesday. “I think it’s incumbent on (Rogers) to first acknowledg­e, but then address the harms that flow from this merger.”

Vancouver-based Telus is one of Canada’s big three national wireless carriers and sells television service to customers in B.C. and Alberta and parts of Quebec, but it does not have a media division.

It argued on Tuesday that the commission should reject the transfer of broadcast licences from Shaw to Rogers for numerous reasons, primarily because it would give the combined company too much power in the Canadian broadcast sector.

On the issue of local news, Simpson and other Telus executives said if the commission does approve the transfer of licences, it should require Rogers to continue funding Global News.

“Global News is a service that many Western Canadians rely on,” said Zainul Mawji, executive vicepresid­ent of home solutions at Telus, adding that Global attracts more than 20 per cent of viewers to its evening newscasts in B.C. and Alberta, compared with just over one per cent for Citytv stations.

Simpson said Global is likely to turn to the Independen­t Local News Fund (ILNF) for support and noted that the $13 million would chew up more than half of the fund’s roughly $21 million budget in 2019-20.

“(Rogers’s) entire proposal relies on externaliz­ing (those costs) to the detriment of truly independen­t local news production,” she said.

On Monday, Rogers broadcast vice-president Susan Wheeler told the CRTC the company found it hard to “get our head around” the idea of continuing to fund a rival network.

Wheeler said that at about $27 million, Citytv’s annual budget is much smaller than Global’s and redirectin­g the money will help City compete for more viewers in the West.

To boost Canadian content, the CRTC requires cable providers to contribute to the broadcast system. Under a 2016 policy for “vertically integrated” players (businesses that create television content and also distribute it to home TV subscriber­s), the CRTC has allowed cable companies to direct some of that funding to local news programmin­g.

Global is owned by Corus Entertainm­ent Inc., which is ultimately controlled by the Shaw family who also control the Shaw Communicat­ions telecom business. After a spinoff of the media division and subsequent sale of shares in recent years, Corus is not owned by the cable company, but because of the family’s ownership ties, the CRTC still considers the companies to be related.

Since 2016, Shaw has directed local news funding to Global News while Rogers has funded Citytv (Bell has funded CTV).

Corus said in a September filing with the CRTC that it was concerned the loss of funding “will have a detrimenta­l impact on local news production and delivery, including in markets such as Kelowna, Lethbridge, Saskatoon, Regina, Peterborou­gh, Kingston, Saint John and Halifax, where Corus operates local stations but Rogers does not.”

But Corus is not scheduled to appear in person at the five-day CRTC hearing and a spokespers­on declined to comment further on the matter Tuesday.

Dwayne Winseck, professor at Carleton University’s School of Journalism and Communicat­ion and director of the Canadian Media Concentrat­ion Research Project, has been studying the effects of consolidat­ion in the Canadian media and telecom industries over the past two decades.

“When you see ownership transactio­ns, you typically see the diversion of resources away from the creation of original content, especially expensive content like news that doesn’t have big profit margins,” Winseck said, adding that the newly combined companies often prioritize other spending, “especially paying down the debt of these mergers.”

 ?? FRED CHARTRAND THE CANADIAN PRESS ?? Edward Rogers, left, chair of Rogers, chats with Brad Shaw, chair and CEO of Shaw, on Monday during a break at the CRTC hearing looking into the merger of the two companies.
FRED CHARTRAND THE CANADIAN PRESS Edward Rogers, left, chair of Rogers, chats with Brad Shaw, chair and CEO of Shaw, on Monday during a break at the CRTC hearing looking into the merger of the two companies.

Newspapers in English

Newspapers from Canada