The Shaw family, once a powerhouse in Canadian telecommunications, now finds itself on the receiving end of the very market consolidation they helped create.
Corus Entertainment Inc (TSE: CJR.B), controlled by the Shaw family, has filed a complaint with the Canadian Radio-television and Telecommunications Commission (CRTC) against Rogers Communications Inc. (TSE: RCI.B), alleging abuse of market power.
This complaint comes in the wake of the Shaw family’s blockbuster $20 billion sale of Shaw Communications to Rogers in April 2023. The deal, which made the Shaws one of the largest shareholders in Rogers outside the Rogers family, has now inadvertently placed them in a precarious position with their other media asset, Corus Entertainment.
Corus, a media company that owns various cable television channels and local TV and radio stations across Canada, is now in financial distress. Its stock market value has plummeted to a mere $31 million, with analysts warning of the need for recapitalization to reduce debt. The company that once benefited from the Shaws’ media empire is now crying foul against the very consolidation that enriched its controlling family.
The crux of Corus’s complaint centers on Rogers’ partnership with Disney+ and its advertising strategy, which Corus claims undercuts its own “Disney-themed” channels. Corus accuses Rogers of “predatory behavior” aimed at eliminating Canadian competition — a strategy that the Shaw family ironically contributed to by selling their most valuable assets to Rogers.
Speaking of which, this means that a bigger portion of their wealth is tied to Rogers. Bradley Shaw and another former Shaw executive currently sit on the Rogers board, further complicating the family’s position in this dispute.
Rogers, for its part, dismisses Corus’s complaints as baseless, suggesting that Corus has failed to adapt to changing viewer demands. A Rogers spokeswoman stated, “Sadly, Corus has not kept up with the demands of Canadians and is now looking for the regulator to protect their broken business model.”
Rogers is used to complaints, after all. Among telecom-television companies in Canada, Rogers received the most number of complaints in 2023, with the top issues being 1) incorrect charge about monthly price plan, 2) contract conflicts with agreement, and 3) credit or refund not received.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
