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Global could be marginalized in Shaw-Rogers deal

 

Global could be marginalized in Shaw-Rogers deal

The proposed sale of Shaw Communications to Rogers could have negative spin off effects for Global TV and Global-owned properties like CHML in Hamilton. In a filing to the CRTC, Corus Entertainment, which owns Global, says it stands to lose $12 Million a year that Shaw currently pays Global to support local news. Rogers told the CRTC that instead, the payment would now go to Roger’s stable of CITY TV stations.

Corus began in 1998 when the Shaw family hived off its radio and TV properties, creating Corus as a separate entity, but still largely controlled by the Shaw family. Corus went on an acquisition spree purchasing specialty channels, and other properties, culminating in the purchase of the Global TV network in 2016.

The CRTC requires broadcast distributors – companies that deliver television channels through cable, satellite or internet protocol networks, like Shaw Cable – 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.) Effectively the transfer of $12 Million a year in support of Global news was an in-house transaction between Shaw Cable and Shaw-controlled Corus. That will all end if the proposed deal to sell to Rogers is approved.

A glance at the Rogers financial statements for 2020 shows how markedly the broadcasting landscape has changed. Rogers’ wireless telephone business brings in roughly double the amount its cable holdings earn, and the broadcasting division brings in only 11 percent of the company’s total revenue and barely breaks even. Back in the 1980’s when  television was king, industry observers thought the late Ted Rogers had over extended himself by going deeply into debt to fund his fledgling cell phone business. In the end Rogers ended up owning the largest phone network in Canada, major cable holdings, the CITY TV network and now is poised to control Global as well, depending on what the CRTC and the Competition Burau have to say.

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