Key things to know about Shaw's deal to sell media division to Corus Entertainment | iNFOnews | Thompson-Okanagan's News Source
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Key things to know about Shaw's deal to sell media division to Corus Entertainment

Corus Entertainment's headquarters is shown in Toronto on Wednesday, January 13, 2016. Shaw Communications is selling its media division to Corus Entertainment for $2.65 billion -- a deal that will help fund Shaw's purchase of Wind Mobile. THE CANADIAN PRESS/Cole Burston
Original Publication Date January 13, 2016 - 9:40 AM

TORONTO - Shaw Communications has announced a $2.65-billion deal to sell its media division to Corus Entertainment, which was spun off from Shaw Communications in 1999. The combined company would own the Global Television Network, specialty channels including Showcase and DejaView, and the Canadian versions of international channels such as the Food Network, BBC Canada and HGTV. Here are key things to know about the deal:

Why is one Shaw-controlled company selling to another Shaw-controlled company?

The Shaw family, which controls Shaw Media's parent company, is also the controlling shareholder in Corus. The deal essentially consolidates the Shaw family's various media properties — and the associated risks — under the Corus umbrella. With changes coming that will allow customers to select which individual channels they want to buy, and broader questions looming about the performance of the media industry in an increasingly digital world, it makes business sense to focus one company on distribution and the other on producing the content for distribution.

Are there other reasons why this deal is happening?

Shaw says it wants to sell its media assets in order to concentrate on its cable, fibre-optic and wireless networks. The deal would also help fund the company's $1.6 billion purchase of upstart wireless carrier Wind Mobile, announced in December. Selling its media division puts Shaw's focus squarely on the networks that underlie its Internet, television, home phone and mobile services.

How big is this deal?

The combined company would have a comparable share of English TV viewership to Bell, with each of them accounting for slightly more than a third of what Canadians watch on television. Corus would own the top six highest-rated specialty channels among women, as well as highly rated children's entertainment including the Disney channels and Nickelodeon.

What difference will it make for TV viewers?

The deal should have little impact for viewers, at least in the short term. Despite the multibillion-dollar price tag, the agreement doesn't actually change much about Shaw Media's ownership.

Is pick and pay a factor?

Beginning in March, TV customers will be able to pick individual channels to add to their subscriptions on an a la carte basis, or in small packages that they design themselves. That could mean a lot less revenue for the less popular specialty channels, which have until now been supported by their inclusion in packaged bundles from the TV providers. With Corus taking 19 specialty channels off Shaw's hands, Shaw gains more certainty about its future revenues.

Are there media concentration concerns?

Corus executives say that because the deal doesn't involve a change in ownership, they don't anticipate any issues with the CRTC, the Competition Bureau or the federal government. All three authorities have various powers they can use to block deals if they feel such agreements would unduly concentrate media power or harm consumers.

News from © The Canadian Press, 2016
The Canadian Press

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