Corus claims Rogers became predatory following its Shaw acquisition

===========================================================

Introduction

Telecommunications giant Rogers Communications Inc. has been accused by Canadian television company Corus Entertainment Inc. of abusing its market power following its blockbuster acquisition of Shaw Communications Inc.

The Acquisition and Its Impact

In April 2023, Rogers acquired Shaw Communications for approximately $20 billion. This deal made the Shaws one of the largest shareholders of Canada’s biggest wireless company outside of the Rogers family.

However, this acquisition has had a devastating impact on Corus Entertainment, a financially troubled media company controlled by the Shaw family. The company’s stock market value has dropped to $31 million, and analysts are warning it must recapitalize to reduce debt.

Corus’s Complaint to the CRTC

Corus’s complaint centers on how Rogers is luring customers to Walt Disney Co.’s Disney+ streaming app after signing a deal with the Hollywood giant. Under this agreement, Rogers handles Canadian advertising sales for the ad-supported tier of Disney+. Corus claims that this undercuts its own "Disney-themed channels" and concludes by alleging a wider effort by Rogers to eliminate Canadian competition.

Loss of Important Programming Deals

In June, Corus also lost important programming and trademark deals with Warner Bros Discovery Inc. and NBC Universal to Rogers, accelerating its spiral. This has further weakened Corus’s position in the market.

Allegations of Predatory Behavior

Corus’s complaint alleges that Rogers is engaging in predatory behavior enabled by its dominant size and scale. It claims that Rogers is attempting to imperil Corus in every market: content acquisition as a buyer, and advertising and subscriptions as a seller.

The company argues that Rogers is trying to foreclose on potential competition, saying: "Rogers is attempting to imperil Corus in every market: content acquisition as buyer, and advertising and subscriptions as seller… It is engaging in predatory behavior, enabled by dominant size and scale, to foreclose on potential competition."

Response from Rogers

Sarah Schmidt, a spokeswoman for Rogers, dismissed the complaint, saying: "Sadly, Corus has not kept up with the demands of Canadians and is now looking for the regulator to protect their broken business model while we’re focused on meeting our customers’ changing viewing habits."

Rogers also claimed that the complaint was baseless and designed to prevent them from providing Canadians with the content they want on their platform of choice.

Response from Corus

Melissa Eckersley, a spokeswoman for Corus, said: "This baseless complaint is designed to prevent us from providing Canadians with the content they want on their platform of choice. They’re trying to force service providers to carry and our customers to pay for channels they no longer want to watch."

Corus also asked the CRTC (Canadian Radio-television and Telecommunications Commission) to take swift action against Rogers’ unfair, anti-competitive treatment.

Conclusion

The acquisition of Shaw Communications by Rogers has had far-reaching consequences for Corus Entertainment. The company’s allegations of predatory behavior by Rogers are serious and warrant a thorough investigation by the CRTC. The outcome of this case will have significant implications for the future of media companies in Canada and their ability to compete in the market.