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2024 Canadian specialty television realignment

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In June 2024, Rogers Communications announced a licensing agreement with Warner Bros. Discovery, under which it will hold the rights to the channel brands and programming of Warner Bros. Discovery (WBD) factual and lifestyle television networks. The agreement will trigger a major re-alignment of Canadian specialty television, ending the long-term associations between the brands of WBD predecessors Discovery Communications and Scripps Networks Interactive with Bell Media and Corus Entertainment respectively.

Most of the changes associated with these agreements will take place on and around January 1, 2025, including the rebranding of multiple specialty channels across both companies under new brands with revised programming lineups, and Rogers concurrently relaunching selected Warner Bros. Discovery brands as new linear television specialty channels. Alongside the WBD deal, NBCUniversal also launched three of its channel brands in Canada via the realignment, with Rogers concurrently announcing an agreement for the rights to Bravo (mostly replacing an existing relationship with the Corus-owned specialty channel Slice)—which launched in September 2024 as a replacement for OLN, and Bell acquiring the rights to USA Network and Oxygen to replace Discovery Channel and Investigation Discovery respectively.

The loss of its rights to WBD lifestyle content exacerbated financial issues being faced by Corus since the Shaw family's sale of former sister company Shaw Communications (for which it had financial synergies) to Rogers itself in 2023, resulting in various notable cuts across its properties in mid-2024. Corus also accused Rogers of abusing its market position in cable television since the merger in ways that it considered detrimental to its specialty channels.

Background

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Past licensing relationships

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Discovery Channel in Canada was first established in 1994 by NetStar Communications, a company formed from the broadcasting assets of Labatt Brewing Company after its sale to Interbrew (due to restrictions on the foreign ownership of broadcasters). Due to its ownership of TSN, ESPN Inc. also held a stake in the company.[1][2] A majority stake in NetStar was acquired in 2000 by CTV Inc., which was then acquired by Bell Canada Enterprises along with The Globe and Mail to form Bell Globemedia—the direct precursor to the current Bell Media.[3][4][5] The subsidiary, now CTV Specialty Television, would launch other Discovery channel brands in Canada, including a Canadian version of Animal Planet in 2000,[6] and then Discovery World, Investigation Discovery, and Discovery Science (Science Channel) in 2010 as part of an expanded licensing agreement with Discovery Communications.[7]

Corus Entertainment's association with the former Scripps Networks brands dates back to a corporate precursor, Atlantis Communications, who launched a Canadian version of HGTV in partnership with Scripps in 1997.[8] Atlantis would later merge with Alliance Communications, forming Alliance Atlantis.[9] The company would go on to form Food Network Canada in 2000, replacing the original U.S. network on television providers.[10] In 2007, Alliance Atlantis' television assets were sold to a consortium of Canwest and Goldman Sachs Capital Partners known as CW Media. After Canwest filed for bankruptcy, the company's assets were acquired by Shaw Communications via the Shaw Media subsidiary.[11] Shaw Media was subsumed by Corus in 2016;[12] both companies had already been principally controlled by JR Shaw and his family, with Corus originally established as a spin-off from Shaw in 1998.[13] Corus would launch other Scripps brands such as DIY Network (which would later be replaced, as in the U.S., by Magnolia Network)[14] and Cooking Channel,[15] and served as a Canadian launch partner for Discovery's streaming platform Discovery+.[16]

Some of HGTV's Canadian content programs have been aired by HGTV U.S., with Love It or List It and Property Brothers in particular being among its top shows.[17] In March 2024, according to ratings from Numeris, Corus stated that its channels accounted for 17 out of the top 20 programs on Canadian specialty television in January and February, including HGTV and Food Network programs such as Celebrity IOU, House Hunters, and Beat Bobby Flay.[18]

Shaw acquisition by Rogers

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On March 15, 2021, Rogers Communications announced a $26 billion offer to acquire Shaw, subject to regulatory and shareholder approval.[19] The sale was completed on April 13, 2023.[20][21] The CRTC began to classify Corus as an independent broadcaster as a result.[22] In the months following the sale, Corus began to experience financial issues and declining revenue; on July 13, 2023, Corus announced that it would sell its Toon Boom animation software to the private equity firm TPG Inc. for $147.5 million to help pay down its debt.[23] On October 27, 2023, Corus announced the suspension of its dividend and intention to redirect the use of free cash flow from dividends to debt repayment.[24]

On May 13, 2024, the CRTC approved an "exceptional" request from Corus to reduce its mandatory expenditures into programs of national interest (PNI) from 8.5% to 5% of revenue, in order to help offset its loss of Shaw community television expenditures for local news in metropolitan markets (which was reallocated from Corus's Global stations to Rogers' Citytv stations as a result of the acquisition).[25][26]

Rogers agreements with Warner Bros. Discovery and NBCUniversal

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On June 6, 2024, Corus disclosed that Warner Bros. Discovery (WBD) had declined to renew some of its brand licensing and programming agreements with the company, which were set to expire at the end of the year. Without revealing specific details, Corus CEO Doug Murphy alluded to the presence of "inequitable structural relationships in the Canadian media and telecom industries, particularly affecting independent broadcasters like Corus".[27]

On June 10, 2024, Rogers Sports & Media announced an exclusive licensing agreement with WBD, under which the rights to all WBD lifestyle and factual brands will move to Rogers platforms beginning in 2025,[28] including Animal Planet, Discovery Channel, Food Network, HGTV, Investigation Discovery (ID), Magnolia Network, Motor Trend, the Oprah Winfrey Network (OWN), and Science Channel.[29] Content would be distributed via new and existing Rogers platforms, including its television networks and Citytv+; in August, Rogers stated that it would relaunch Discovery, Food Network, HGTV, ID, and Magnolia Network as new linear channels on January 1, 2025, while content from Animal Planet, Cooking Channel, Motor Trend, OWN, and Science Channel will stream on Citytv+.[30]

Alongside the WBD deal, Rogers also announced an agreement with NBCUniversal to acquire the Canadian rights to Bravo and its original programming (which had historically been carried by Corus channel Slice); Bravo would launch in Canada on September 1, 2024, using the former channel allotments and license of OLN.[31][32][28]

Programming changes

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Due to the end of the licensing agreements, both Bell Media and Corus Entertainment announced plans to rebrand and/or relaunch their WBD-licensed channels under new brands, while preserving existing programming scopes and Canadian productions:

Corus

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Corus stated that most of its WBD-licensed networks would continue to operate under new brands and an "alternate foreign program supply". Corus did not rule out the possibility of networks being shut down outright instead;[33] the Canadian version of Oprah Winfrey Network shut down on September 1, 2024.[34] Programming changes at Corus networks began in the 2024–25 television season, with Slice widening its format to include true crime programming, and acquiring new reality and comedy programs (including additional We TV programs and The Daily Show; the latter having formerly aired on CTV Comedy Channel until 2023).[35]

On September 18, 2024, Corus announced the rebranding of HGTV and Food Network as Home Network and Flavour Network on December 30, 2024; the two networks will be built around new and existing Corus original productions, as well as new U.S. and international acquisitions (including content from Fifth Season, The Roku Channel, and Studio Ramsay Global).[36][37][38] Corus CFO Troy Reeb stated that the rebranding was an opportunity to widen the networks' programming to be "younger", "fresher", and no longer bound by the limitations of the existing licensed brands.[39][40][41]

Bell

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Bell Media announced its plans for its WBD-licensed networks on October 17, 2024; the company announced new licensing agreements with NBCUniversal to introduce the Oxygen and USA Network brands to Canada, which will replace ID and Discovery respectively on January 1, 2025. ID will see no major changes in scope under Oxygen as the brand is similarly focused on true crime, but Discovery's rebranding as USA Network will formally broaden the channel's scope to include more entertainment programming outside of science and technology.[42] The remaining channels will be brought under the CTV branding (as with other Bell Media specialty networks), with Animal Planet, Discovery Science, and Discovery Velocity to be relaunched as CTV Wild, Nature, and Speed Channel respectively.[42] All five channels will retain their existing Canadian content programming, [42]

Regulatory complaints and litigation

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Bell Media litigation with WBD

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On June 19, 2024, Bell Media filed a request for an injunction against both Rogers and WBD, seeking to delay the implementation of the agreement.[43] Bell asserted that its original contract with Discovery gave it rights to a two-year "window to adjust" in the event it were not renewed, preventing the company from supplying programming to a competitor for two years.[44] A Rogers spokesperson stated that the filing was "without merit", and accused Bell of seeking to "block Canadians from seeing these Discovery channels for two years – stopping anyone in Canada from distributing them and stopping anyone in Canada from watching them."[45][44]

On August 28, 2024, Bell filed that it was no longer seeking injunctive relief against Rogers, and would focus upon WBD's alleged violations of non-compete clauses and its right of first negotiation. Bell stated that it had been "[misled] into believing that its exclusive right of first negotiation had been respected",[46] and that it had attempted to begin negotiations to renew with WBD in late-2023, but that the company had made "repeated conflicting representations about their intentions on several issues".[46]

On October 8, 2024, Bell announced that it had reached a settlement with WBD. Under the agreement, Bell renewed its Canadian rights to HBO and Max original programming for Crave, and also entered into pacts to develop new international co-productions, and distribute Bell Media original productions via WBD platforms internationally.[47]

Corus complaint to Rogers

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In retaliation for the agreement, Corus filed a complaint against Rogers with the Canadian Radio-television and Telecommunications Commission (CRTC) in August 2024, accusing the company of abusing a dominant position in the Canadian telecom market since its acquisition of Shaw. In particular, Corus accused Rogers of showing an undue preference towards the foreign streaming service Disney+—for which Rogers provides Canadian advertising sales—that was harmful to its own Disney Branded Television-licensed networks (such as Disney Channel). These included prominent placements for the Disney+ app near the channels in the Ignite TV electronic program guide, and promotional offers bundling the ad-supported tier of Disney+ with Ignite TV service for no additional charge. Corus stated that these tactics were "clearly part of a larger, predatory strategy to 'cut out the middle company,' which affects all Canadian independent programming services", and believed that the CRTC had been lax in enforcing conditions of the sale relating to Rogers' dealings with independent broadcasters.[48] Rogers challenged the complaint as "baseless", arguing that Corus had failed to adapt its "broken business model" to cord-cutting, especially in the children's television market.[48]

The Gazette media writer Steve Faguy noted that the original launches of Corus' Disney-branded networks in 2015 had occurred under nearly identical circumstances to Rogers' WBD deal, as Corus had acquired the Disney Channel library rights formerly held by DHX Media (now WildBrain)'s Family Channel, Disney Junior, and Disney XD—resulting in Corus establishing its own Disney Channel, Disney Junior, and Disney XD channels under new licenses, and DHX's Disney Junior and XD channels being rebranded as spin-offs from Family.[49][50][51]

Financial impact

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The announcement caused Corus's share price to fall significantly.[52] On June 17, 2024, Corus CEO Doug Murphy retired after 21 years with the company, with CFO Troy Reeb and executive vice president of networks and content John Gossling succeeding him as co-chairmen.[53] On July 15, citing the "challenging advertising environment", Gossling stated during Corus's third-quarter earnings report that the company planned to cut 300 more positions by the end of August (a total of 800 since September 2022) and "aggressively" cut costs.[54]

Corus continued to cut staff in its television and radio businesses over the following months, including layoffs in the Global News division (including the end of local news production at CHBC-DT in Kelowna, which hubbed production out of its Vancouver sister station CHAN-DT with contributions from local reporters),[55][56][57] layoffs at its Kingston, Ontario radio and television stations,[58] and the closure of AM stations CHQT Edmonton, CKGO Vancouver, and CHML Hamilton. The on-air announcement of CHML's closure cited "years of financial loss" and "the shift of advertising revenues to unregulated foreign platforms".[59][60][61] On July 17, Corus-owned Nelvana suspended its development of new projects through the end of 2024, after the departure of its vice president Athena Georgaklis.[62]

In September 2024,The Globe and Mail reported that rival conglomerate Quebecor (which had acquired Freedom Mobile from Shaw as a condition of the Rogers purchase)[63] had been pursuing offers to acquire Corus, and was seeking to have the company's debt written down by 60% to ease a potential acquisition.[64][65]

See also

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References

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  1. ^ "TSN brand to be retired in wake of CTV deal". Strategy. April 26, 1999. Retrieved 2024-10-18.
  2. ^ Broadcast Dialogue newsletter, January 21, 1999 Archived March 4, 2009, at the Wayback Machine
  3. ^ "BCE-CTV deal remakes media landscape". The Globe and Mail. 2010-09-10. Retrieved 2024-05-10.
  4. ^ "BCE's takeover of CTV approved". CBC. 7 March 2011. Retrieved 9 May 2024.
  5. ^ Pinto, Jordan (April 2, 2020). "Discovery Canada: Capturing the nation's imagination for 25 years". Playback. Retrieved 2024-10-18.
  6. ^ Animal Planet Launch Archived April 26, 2012, at the Wayback Machine Bell Globemedia press release September 6, 2001
  7. ^ Discovery to Launch Three New Channel Brands In Canada Archived 2011-07-19 at the Wayback Machine
  8. ^ Merger creates film, TV giant Toronto Star 1998-07-22
  9. ^ Kelly, Brendan (1998-11-03). "Merged and mowed". Variety. Retrieved 2023-07-11.
  10. ^ "CRTC approves Food Net Canada". 2000-07-10. Retrieved 2024-10-17.
  11. ^ "Shaw Communications closes purchase of Canwest TV assets, rebrands as Shaw Media". Winnipeg Free Press. The Canadian Press (via Winnipeg Free Press). 2010-10-27. Retrieved 2010-10-27. [dead link]
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  13. ^ "Kids, Music and More". The Globe and Mail. Retrieved March 12, 2016.
  14. ^ "Corus to launch Magnolia Network Canada". Realscreen. 2022-03-01. Retrieved 2024-10-24.
  15. ^ "Corus feeds the food genre with new channel". Realscreen. Retrieved 19 October 2016.
  16. ^ Spangler, Todd (October 12, 2021). "Discovery Plus Set to Launch in Canada". Variety. Retrieved January 5, 2022.
  17. ^ "HGTV Will Never Upset You: How the Network Beat CNN in 2016". Bloomberg. 28 December 2016. Retrieved 28 December 2016.
  18. ^ Hernandez, Andrea. "Corus tops Canadian specialty entertainment ranking". Retrieved 2024-10-18.
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  20. ^ Evans, Pete (March 31, 2023). "Rogers takeover of Shaw approved, with conditions". CBC. Retrieved April 3, 2023.
  21. ^ "Rogers closes its historic $20B acquisition of Shaw". BNNBloomberg.ca. April 3, 2023. Retrieved April 3, 2023.
  22. ^ "Broadcasting Decision CRTC 2022-76". March 24, 2022. Retrieved April 3, 2023.
  23. ^ Vlessing, Etan (2023-07-17). "Toon Boom Animation Sold to Private Equity Firm for $111M". The Hollywood Reporter. Retrieved 2023-10-25.
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  29. ^ "Rogers scoops rights to HGTV, Food Network, Discovery and more from Corus, Bell". The Canadian Press. June 10, 2024. Retrieved 2024-06-12.
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  34. ^ Thiessen, Connie (June 26, 2024). "Corus pulls plug on AM formats in Vancouver, Edmonton". Broadcast Dialogue. Retrieved June 26, 2024.
  35. ^ Pinto, Jordan (September 2, 2024). "Corus's Slice shops around, expands into new genres after losing Bravo content". C21Media. Retrieved September 2, 2024.
  36. ^ "Can lifestyle channel reboot lay foundation for a Corus turnaround?". C21media. Retrieved 2024-09-24.
  37. ^ Nino Gheciu, Alex (September 18, 2024). "Corus announces two new lifestyle networks after Rogers scoops up Food Network and HGTV". The Globe and Mail. Retrieved September 18, 2024.
  38. ^ Thiessen, Connie (2024-09-18). "Corus unveils Flavour Network and Home Network". Broadcast Dialogue. Retrieved 2024-09-18.
  39. ^ "Can lifestyle channel reboot lay foundation for a Corus turnaround?". C21media. Retrieved 2024-09-24.
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  41. ^ Thiessen, Connie (2024-09-18). "Corus unveils Flavour Network and Home Network". Broadcast Dialogue. Retrieved 2024-09-18.
  42. ^ a b c Thiessen, Connie (2024-10-17). "Bell to bring USA Network, Oxygen True Crime to Canada". Broadcast Dialogue. Retrieved 2024-10-17.
  43. ^ Townsend, Kelly. "Bell Media seeking injunction, damages in Rogers, WBD deal". Retrieved 2024-10-20.
  44. ^ a b "Bell files injunction seeking to block Rogers from broadcasting Warner Bros. content". BNN Bloomberg. Bell Media. 2024-07-02. Retrieved 2024-10-20.
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  46. ^ a b Townsend, Kelly. "Bell Media focuses legal efforts on WBD". Playback. Retrieved 2024-10-20.
  47. ^ Whittock, Jesse (2024-10-08). "Bell Expands Warner Bros Discovery Pact For HBO & Max Content And Ends Legal Action Over Rogers Deal". Deadline. Retrieved 2024-10-08.
  48. ^ a b Thiessen, Connie (2024-08-13). "Corus lodges CRTC complaint alleging Rogers abusing 'dominant position'". Broadcast Dialogue. Retrieved 2024-08-19.
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  51. ^ "DHX-Disney Divorce Almost Done". Cartt.ca. April 16, 2015. Retrieved April 16, 2015.
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  54. ^ "Corus Entertainment 'aggressively' cutting costs, laying off more employees as revenue slumps". CBC News. 2024-07-15. Retrieved 2024-07-16.
  55. ^ Ruttle, Joseph (2024-08-15). "More layoffs coming to Global News, many in B.C., says Unifor". Vancouver Sun. Retrieved 2024-10-19.
  56. ^ Gibson, Rob. "Global Okanagan airs last locally-produced newscasts as outlet pledges continued presence in region". Castanet. Glacier Media. Retrieved August 19, 2024.
  57. ^ Thiessen, Connie (2024-08-20). "Global Okanagan newscasts being delivered out of Metro Vancouver going forward". Broadcast Dialogue. Retrieved 2024-08-21.
  58. ^ "Corus cuts radio, TV jobs in Kingston as part of cost savings". Kingston Whig-Standard. July 18, 2024. Retrieved July 18, 2024.
  59. ^ Thiessen, Connie (June 26, 2024). "Corus pulls plug on AM formats in Vancouver, Edmonton". Broadcast Dialogue. Retrieved June 26, 2024.
  60. ^ "900 CHML closes, ending nearly a century of local radio in Hamilton". Hamilton Spectator. August 14, 2024. Retrieved August 14, 2024.
  61. ^ Thiessen, Connie (August 14, 2024). "Corus shutters 900 CHML Hamilton". Broadcast Dialogue. Retrieved August 14, 2024.
  62. ^ "Nelvana Studios VP Athena Georgaklis Departs, Development Halted Amid Corus Cost Cuts". Animation Magazine. 19 July 2024.
  63. ^ Evans, Pete (2023-03-31). "Rogers takeover of Shaw approved, with conditions". CBC News. Retrieved 2024-10-20.
  64. ^ "Quebecor made offer to buy Corus Entertainment months ago, but struggling media company has not yet responded, source says". The Globe and Mail. 2024-09-16. Retrieved 2024-10-04.
  65. ^ "Quebecor pushes for debt discount as it seeks to acquire Corus Entertainment". The Globe and Mail. 2024-09-29. Retrieved 2024-10-04.
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