Global News will take a $13-million hit if the Rogers-Shaw merger goes ahead, CRTC hears

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Cable giant Rogers Communications Inc. and Shaw Communications Inc. Critics of the alliance say the deal risks significant funding for Global News and could hurt audiences in western Canada, where the station is popular, and could hurt independent broadcasters in smaller markets. ,

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

It’s a small part of a $26 billion deal, but a substantial portion of Global News’s annual budget of about $138 million in 2020, and some of the interventionists at this week’s CRTC hearing on the merger say Rogers will face its negative consequences. should be held responsible for. More consolidation in the communications industry.

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The result could be a poor product for viewers and global news turning to other funding sources and receiving a portion of the money that would otherwise go to local news producers in small towns that run through the three major English-language private networks ( Bells). CTV is third).

“Apart from this merger, we will not discuss it. It is only (this) merger that leaves Global looking for funding through some other source,” said Lecia Simpson, director of broadcast policy and regulatory affairs at Telus Corp. told CRTC on Tuesday. “I think it’s up to (Rogers) to accept that first, but then take the damage out of this merger.”

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Vancouver-based Telus is one of Canada’s big three national wireless carriers and sells television service to customers in BC and parts of Alberta and Quebec, but does not have a media division. It argued Tuesday that the commission should reject the transfer of the broadcast license from Shaw to Rogers for a number of reasons, primarily because it would give the combined company too much power in the Canadian broadcasting sector.

On the issue of Local News, Simpson and other Telus officials said that if the commission approves the transfer of the license, it should require Rogers to continue funding Global News.

“Global news is a service that many Western Canadians rely on,” said Zainul Mawzi, executive vice president of Home Solutions at Telus. Just over one percent for Citi TV stations.

Simpson said Global is likely to turn to the Independent Local News Fund (ILNF) for support and noted that the $13 million will chew up more than half of the fund’s roughly $21 million budget in 2019-2020.

“(Rogers)’s whole proposal really hinges on externalities (those costs) to the detriment of independent local news production,” she said.

On Monday, Rogers’ broadcast vice president Susan Wheeler told CRTC that the company is having a hard time “getting its head” at the idea of ​​continuing to fund rival networks.

Wheeler said that at around $27 million, CitiTV’s annual budget is much smaller than Global’s and that redirecting the money would help Citi compete for more viewers in the West.

In order to promote 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 allowed cable companies to direct some of that funding to local news programming. Is allowed.

Global is owned by Corus Entertainment Inc., which is eventually controlled by the Shaw family, which also controls the telecommunications business of Shaw Communications. Following the spinoff of the media division and the sale of shares in recent years, Corus is no longer owned by the cable company, but due to family ownership ties, CRTC still considers the companies related.

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

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

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

Dwayne Vinsek, 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 telecommunications industries over the past two decades.

“When you look at proprietary transactions, you typically see a diversion of resources from the creation of original content, especially expensive content such as news that doesn’t have a large profit margin,” Vincek said. Joint companies often prioritize other expenses. , “especially to pay off the debt of these mergers.”

Christine Dobie is a Toronto-based business reporter for Star. Follow him on Twitter: @christinedobby



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