Global News To Take A $ 13 Million Hit If Rogers-Shaw Merger Continues, CRTC Hears

Critics of the link between cable giants Rogers Communications Inc. and Shaw Communications Inc. say the deal puts significant funding for Global News at risk and could hurt 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 the funds that Calgary-based Shaw currently provides to Global, about $ 13 million in 2020, to its own station. , Citytv.

It’s a small chunk of the $ 26 billion deal, but a big chunk of Global News’ annual budget of around $ 138 million in 2020, and some auditors at this week’s CRTC hearing on the merger say Rogers must deliver. accounts for the negative consequences of further consolidation in the communications industry.

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

“Apart from this merger, we would not be discussing this. It is 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 up to (Rogers) to first acknowledge, but then address the harms that result from this merger.”

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

On the subject of local news, Simpson and other Telus executives said that if the commission approves the license transfer, it should require Rogers to continue funding Global News.

“Global News is a service that many Western Canadians trust,” said Zainul Mawji, executive vice president of home solutions at Telus, adding that Global draws more than 20% of viewers to its nightly newscasts in BC and Alberta. , compared to just over one percent for Citytv stations.

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

“The whole (Rogers) proposal is based on outsourcing (those costs) to the detriment of truly independent local news production,” he said.

On Monday, Rogers vice president of broadcasting, Susan Wheeler, told the CRTC that the company was finding it difficult to “get the hang of” the idea of ​​continuing to fund a rival network.

Wheeler said that at around $ 27 million, Citytv’s annual budget is much less 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” gamers (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 TV programming. local news.

Global is owned by Corus Entertainment Inc., which is ultimately controlled by the Shaw family, which also controls Shaw Communications’ telecommunications business. After a spin-off of the media division and the subsequent sale of shares in recent years, Corus is not owned by the cable company, but due to family 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 that the loss of funds “would have a detrimental impact on 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 local stations but Rogers does not. “

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

Dwayne Winseck, Professor at Carleton University School of Journalism and Communication and Director of the Canada Media Concentration Research Project, has been studying the effects of consolidation on the Canadian telecommunications and media industries for the past two decades.

“When you look at proprietary transactions, you typically see the diversion of resources from creating original content, especially expensive content like news that doesn’t have large profit margins,” Winseck said, adding that newly merged companies often prioritize other expenses. , “Especially paying the debt of these mergers.”

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