(Bloomberg) -- Telecommunications firm Rogers Communications Inc. is abusing its market power following its blockbuster acquisition of Shaw Communications Inc., according to a complaint by a Canadian television company.
The legal filing was made by Corus Entertainment Inc., a financially troubled media company that’s controlled by the Shaw family of Alberta — the same wealthy clan that sold its most valuable assets to Rogers last year. It’s a twist that demonstrates the concentration of media ownership in Canada.
For decades, the Shaws controlled two separate public companies. Shaw Communications focused on selling internet, cable and wireless services to consumers in Western Canada, and was acquired by Rogers in April 2023 for about $20 billion (US$14.6 billion). Corus, which is listed in Toronto, owns a clutch of cable television channels and a network of local TV and radio stations across Canada.
Corus, however, is now in distress, with its stock market value down to $31 million and analysts warning it must recapitalize to reduce debt. And as the company bleeds, Rogers has stuck the knife in, according to its complaint to the country’s broadcast regulator.
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 in which Rogers handles Canadian advertising sales for the ad-supported tier. Corus says this undercuts its own “Disney-themed channels” and it concludes by alleging a wider effort by Rogers to “eliminate Canadian competition.”
In June, Corus also lost important programming and trademark deals with Warner Bros Discovery Inc. and NBC Universal to Rogers — accelerating its spiral.
“Rogers is attempting to imperil Corus in every market: content acquisition as buyer, and advertising and subscriptions as seller,” the Toronto-based company said in its complaint. “It is engaging in predatory behavior, enabled by dominant size and scale, to foreclose on potential competition.”
Last month, Corus warned it may soon breach its debt covenants and it has embarked on large cost-cutting exercise as advertising and other revenue decline.
The Shaws technically control Corus through their ownership of its voting shares. But far more of their wealth is tied to Rogers because of last year’s deal, which made them one of the largest shareholders of Canada’s biggest wireless company outside of the Rogers family. Bradley Shaw and another former Shaw executive sit on the Rogers board.
Sarah Schmidt, a spokeswoman for Rogers, said: “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.”
“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.”
“Rogers’ unfair, anti-competitive treatment towards Corus must not be allowed to stand and we are asking the CRTC to take swift action,” Corus spokeswoman Melissa Eckersley said via email. CRTC is the acronym for the regulator, the Canadian Radio-television and Telecommunications Commission.
Neither Schmidt nor Eckersley commented on the Shaw family’s role in the dispute.
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