By Ahmad Hathout
Quebecor’s opposition to Corus’s recapitalization plan is not one grounded in concern for the public interest, but is a prayer to one day purchase the struggling media company, alleges Corus.
“This is clearly not an organization aiming to perform a public service, it is one striving to achieve through a regulatory approval process what it was unable to achieve in private negotiations: acquisition of Corus at a value of its choosing,” Corus claims in its reply submission, dated last week.
In its intervention, Quebecor asked that the CRTC hold a public hearing to listen to alternative proposals, including its desire to purchase the struggling media company, instead of allowing the company’s debt holders to own 99 per cent of an asset-holding corporation in exchange for forgiving $500 million of debt. (The CRTC already previously rejected a request to hold a public hearing because of such an endevour’s resource intensiveness relative to the alternative consultation, and Corus argued it is unnecessary in this case.)
Corus, which argued that the CRTC does not solicit competing applications for ownership changes, argued in its reply that the Ontario Superior Court, which approved the transaction, already found that the company undertook an extensive strategic review, including outreach to prospective suitors, and “no proposal generated sufficient value to repay creditors or provide recovery to shareholders.”
Beside that, Quebecor asked the CRTC to reject the proposal because the debt holders allegedly don’t have experience in the broadcasting sector and warned that the prospective largest holder of voting shares in the new company, Canso, has a history of making cuts to Postmedia’s news properties.
“This raises serious questions about whether Corus — which has already undergone a 25% workforce reduction since 2024, in addition to the closure of eight programming services and three radio stations over the same period — might face a similar fate,” Quebecor argued.
Corus said Canso’s history is irrelevant because of the different dynamics in the Postmedia case. It added that the concern is, otherwise, unsupported as broadcasting licences “remain subject to the Commission’s ongoing jurisdiction, conditions of service, ownership rules, Canadian control requirements, and public-interest obligations regardless of shareholder identity.
“The fact that noteholders seek risk-adjusted returns does not make them incompatible with broadcasting regulation; every private broadcaster operates within commercial constraints,” Corus added. “Intervenors have not provided any evidence that NewCo does not intend, or would be unable, to meet those obligations under the proposed shareholding and governance structures.”
Corus also took aim at Quebecor’s history of job cuts. “Quebecor highlighted staff reductions and service changes at some Global Television stations in recent years, and the possibility of further changes under the Senior Noteholders, as proof that it would make a better steward for those stations.
“However, the CRTC will recall this to be the same organization that has sought to reduce its own local programming requirements for years and threatened to eliminate two weekend news broadcasts in potential violation of its conditions of licence. Moreover, since 2023, Groupe TVA, Quebecor’s broadcasting arm, has laid off hundreds of employees, including 547 positions in late 2023, citing shrinking advertising revenues.
“By contrast, Corus has consistently complied with its local programming requirements and not sought to reduce them. It has done this despite the same significant television advertising revenue pressures Quebecor’s media subsidiary cited as justification for its own operational changes, and a multi-year delay in accessing a proportional amount of regulated local expression funding,” Corus argued.
Quebecor did not respond to a request for comment.
Corus is further asking that the CRTC forgo, as a condition of approval, imposing an amount to be earmarked for Canadian content funds, called tangible benefits, because the transaction is an internal restructuring of a failing company with no cash payment – just a debt-to-equity conversion at a loss to the creditors.
Quebecor, the Canada Media Fund and the Canadian Media Producers Association, have asked the CRTC to reject this request.
Corus says this is another example of intervenors being more interested in self than the public. In context, Corus argues, these intervenors are direct or indirect beneficiaries of any tangible benefits that may arise from the transaction.
“That financial interest does not make their participation improper, but it does underscore why their submissions should not be treated as neutral testimony in support of the public interest,” Corus charges. “In effect, these intervenors ask the Commission to divert scarce resources away from stabilizing Corus’ operations and toward supporting external third-party funding agencies and their administrative expenses at the very moment the Company requires financial flexibility to continue serving audiences, employees, and local communities.”
A group of minority shareholders in Corus have also asked the CRTC to reject the deal because it allegedly threatens local news, lacks editorial safeguards, and leaves effective control of a massive Canadian media footprint in the hands of unidentified financial investors. While 99.9 per cent of votes cast by senior noteholders were in favour of the recap plan, alongside 99.7 per cent of Class A shareholders, Class B shareholders voted just 61.2 per cent in favour.
Corus, however, did receive supporting interventions, including from Blue Ant Media, Stingray, the largest private sector union, Unifor, the Forum for Research and Policy in Communications, the Community Radio Fund of Canada, and the Canada Deaf Grassroots Movement.
Some have qualified that support, including by asking that the CRTC ensure the new company adheres to certain conditions of service in the public interest and is committed to accessibility measures.
“Time is of the essence,” Corus said in its reply. “Delay has concrete consequences: every additional month postpones those savings and imposes meaningful costs on Corus, whose stakeholders include members of the public whose interest the Commission is tasked with considering—employees, programming and community partners, and Canadian audiences.”
