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.