Shaw deal may be Global threat
TELECOMMUNICATIONS Rogers plans to redirect network funding to its own broadcaster, Citytv
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.”