Funding is Already Getting Cut from Shaw Operations Following Rogers Shaw Merger

The Rogers Shaw merger has already taken an obvious turn. Funding has already started getting redirected from Shaw to Rogers operations.

Last month, we reported on the completion of the Rogers Shaw merger. The move followed almost immediately after Innovation Minister, François-Philippe Champagne, finally stopped pretending and rubberstamped the deal. Critics of the deal point out that the deal is destined to create worse quality of service, higher costs, less competition, and a massive wave of layoffs as the two companies remove “redundancies”.

The government has pushed back, saying that the deal would create increased competition and thousands of additional jobs. Why? Probably because the government thinks that Canadians are stupid enough to believe that this massive mega merger would go down completely differently from so many other mega mergers in the last couple of decades. Throw in a little wishful thinking and Canadian’s will get distracted by something completely different within a month. Then, the obvious can commence under the veil of pseudo-darkness.

So, as a result, it took merely a month before Rogers started redirecting funding from Shaw run operations to Rogers operations. From Broadcast Dialogue:

Without access to funding, Corus Entertainment says its Global television stations across the country will be left “in a precarious and unduly disadvantaged position” as Rogers Communications moves to redirect $13 million in local expression funding to its CityNews stations.

In a letter to the CRTC, dated May 10 and posted to the commission website this week, Corus requests confirmation of its eligibility to participate in the Independent Local News Fund (ILNF), funded by licensed broadcasting distribution undertakings (BDUs), which are required to contribute 0.3% of gross revenues from the previous broadcast year.

Corus – which is effectively controlled by the Shaw Family Living Trust – says given Rogers recent acquisition of Shaw Communications, Rogers has confirmed it will redirect Shaw’s approximately $13 million annual local expression funding from 15 Corus-owned Global stations to six competing Rogers-owned Citytv stations.

“Absent that confirmation, Corus’ 15 Global stations will soon be the only private, conventional local news broadcasters without access to regulated funding under the commission’s local and community television policy,” reads the letter, stating the company “has been left with no alternative but to pursue ILNF funding.”

“Conversely, denying or delaying this request would leave local Global Television stations across Canada in a precarious and unduly disadvantaged position, which could impact their news operations,” it continues, stating that it expects Rogers to discontinue funding to Global shortly.

This is very likely the opening salvo to start breaking down anything Shaw. Obviously, with these funding cuts, there is the significant risk of layoffs that would ensue. What’s more, this may be the first of many decisions that would directly impact jobs. Many have long feared that massive layoffs would also be coming down the pipe. This fear was noted as recently as last month. From BNN:

The founder of the wireless company now known as Freedom Mobile says the $20-billion Rogers-Shaw sale is a costly move that will likely lead to high prices for wireless customers and layoffs for telecom staff.

Anthony Lacavera, founder and chairman of Globalive, made the comments to BNN Bloomberg on Friday, after the federal government gave final approval to Rogers Communications Inc.’ proposed purchase of Shaw Communications Inc.

Lacavera predicted that layoffs will be the only way Rogers can finance the costly takeover.

“I know the business, and I know that the only way Rogers is going to finance this very expensive cable merger is we’re going to see layoffs, as a nice way to put it. It’s going to be a massacre,” Lacavera said in a television interview.

Really, the question at this point is when the next shoe is going to drop. It’s definitely not enviable to be under the Shaw banner these days and one can only feel sorry for those Shaw related employees. At this point, it just seems to be only a matter of time before anything Shaw starts disappearing from the landscape.

(Via @Pagmenzies)

Drew Wilson on Twitter: @icecube85 and Facebook.


  • DB says:

    I think Corus doth protest too much. According to numbers submitted to the CRTC, Global has lost money every year since 2014 (I didn’t go back any further). Its losses have ranged from a low of $25 M in 2014 to a high of $111 M in 2022. The losses include $12 M to $14 M of news funding from Shaw every year starting in 2018. Prior to 2018 there was no local news funding. Revenue excluding local news funding, has ranged from a high of $405 M in 2015 to a low of $305 M in 2020.

    Losing the local news funding will make a bad situation a bit worse. Global’s real problem is that it’s been a money pit for years.

    • Drew Wilson says:

      Fair enough. I guess when I looked at the idea of Global funding being switched to City, the thought that crossed my mind is that I don’t see City being any better than Global. What’s worse, less competition in the broadcasting market means there will be even less motivation to try and push out decent quality content.

      I know this from personal experience when I worked at a small town TV station. They were the only broadcast news game in town and there was zero interest in making their product better (it was already pretty bad). Suggestions for improvement were continuously greeted with excuses of how it’s not in the budget or “it’s not what the audience wants”. Just occasional coverage of recreational lawn bowling and horse shoe throwing, people seeing faces in fences (other employees were openly saying that they were embarrassed by how bad stuff like that was, yet it went to air anyway), and rebroadcasting what aired on Global the previous day or so.

      Still, I can see the CRTC numbers. Global’s news coverage is not that great and their entertainment programming isn’t any better. There’s only so much day time drama and bad reality TV you can rebroadcast from American networks before enough people bail on your brand.

  • Vonda Jessie says:

    Rogers” City Tv” operationz has also been a money pit and basically a hollow shell of its former self. Why this merger approved is truly a head scratcher itself but make no mustake ..this was NOT to benefit the consumer at all

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