Commissioner Shoan wanted a hearing
GATINEAU – After the close of trading Wednesday, the CRTC announced it has approved the $2.65 billion purchase of Shaw Media by Corus Entertainment.
In legal/regulatory speak, the Commission approved “an application by Shaw Communications on behalf of Shaw Media and its licensed subsidiaries, to effect a corporate reorganization resulting in the transfer of Shaw Communication Inc.’s shares in Shaw Media Inc. to Corus Entertainment Inc.”
Essentially, the Commission continued to treat Corus and Shaw as it always has since Corus was created in 1999 as a place to house media assets controlled by the Shaw family. Since both organizations are controlled by founder JR Shaw, the CRTC had always thought of and treated Corus and Shaw as one, even though they were run separately.
“Since Corus Entertainment Inc. was founded in 1999, Shaw Media Inc. and Corus Entertainment Inc. have been effectively controlled by the same person, Mr. JR Shaw. Since that time, although they have operated under separate management teams and are overseen by distinct boards of directors, control over both entities has effectively rested with the same person from a regulatory perspective,” reads the Commission’s release this afternoon.
Given this, its review of the terms of the transaction and a the public consultation (several groups intervened and said there must be a public hearing and that tangible benefits should be paid) — the CRTC concluded that this change in ownership does not result in a change in effective control of either entity, which continues to be exercised by Mr. JR Shaw, says the release.
“As a result, consistent with the Commission’s long standing policies, no tangible benefits will be required for this transaction, nor will any new broadcasting licences be issued for any of the services that are transferred. From a regulatory perspective, Shaw and Corus have always been treated as ‘one voice’ under the CRTC’s Diversity of Voices policy.”
Tangible benefits funds of up to 10% of sale price of a TV broadcaster are normally created when there is a change in control. There is still a great deal of these monies currently waiting to be spent.
"This transaction positions Corus Entertainment Inc. as a stronger player with enhanced scale that can offer better services and higher-quality programming to Canadians – a goal that is consistent with the outcomes described in the CRTC’s Let’s Talk TV decision of March 12, 2015, and which supports objectives of the Broadcasting Act,” added the Commission’s press release.
“We are very pleased with the CRTC’s decision,” said Doug Murphy, president and CEO of Corus Entertainment, in a release. “This marks the final milestone in the approval process for this transformational acquisition. We will now begin the important integration work to bring together our winning combination of brands, assets and talent that will become the new Corus.”
The Canadian Media Producers Association pulled no punches in its reaction to the CRTC's decision. "Today’s CRTC decision sends a shiver down the spine of Canada’s independent producers, who now face the hard realities of a hyper-consolidated broadcasting sector,” said Reynolds Mastin, president and CEO, in the group's press release. Because of Corus' new, much larger size, that new negotiating power will be used "to extract even more rights and revenues from independent producers," says the CMPA release. "A healthy, vibrant broadcasting system must strike a balance between the need for strong and successful broadcasters and the need to foster competition for creative ideas, talent and programs,” added Mastin. “The CRTC’s decision today disturbs this balance. It comes at the expense of producers who will find it increasingly difficult to create the very best ‘made-in-Canada’ content for Canadian and global audiences."
Ontario Commissioner Raj Shoan wrote a dissent to the decision, saying that with the concentration of electronic media in Canada (Rogers, Bell and Corus own 80% of the TV viewing audience share here, he noted), there should have been a full hearing into this transaction (something the CMPA also demanded in its intervention last month). Shoan noted he abstained from voting on this decision. "In my view, in the absence of a fulsome public hearing to assess a transaction of this size, the Commission cannot possibly have sufficient information and understanding of the potential market impacts to approve the application as filed," wrote commissioner Shoan in the decision.
