With Shaw Media being acquired by Corus, it might be worthwhile to review the ownership requirements in the Canadian communications industry.
Both Shaw and Corus are controlled by the Shaw family although both companies are publicly traded (SJR.B and CJR.B respectively on the Toronto Exchange).
Shaw is being characterized now as focused on telecom, while Corus will have the broadcasting assets. However, from a regulatory perspective, Shaw’s cable TV service is considered to be a “Broadcast Distribution Undertaking” and as such, it is governed by the Broadcast Act. The rest of Shaw’s operations fall under the Telecom Act.
Under the Broadcast Act, foreign control simply is not permitted:
3 (1) It is hereby declared as the broadcasting policy for Canada that
(a) the Canadian broadcasting system shall be effectively owned and controlled by Canadians;
…
The Telecom Act allows companies that have less than 10% of Canada’s total telecommunications services revenues to be exempted from foreign ownership restrictions. A foreign owned telecom company is permitted to grow organically beyond the 10% threshold, but it may not do so through acquisitions.
The latest Communications Monitoring Report from the CRTC showed $45.9B in total telecommunications services revenues (2014). Shaw’s 2015 annual financial reports indicated revenues of $5.488B, of which $1.080 came from Media, leaving revenues of $4.408B, including cable TV (which would be a substantial portion of the $3.752 in Consumer revenue.
So, while Shaw has less than 10% of Canada’s telecommunications services revenues, broadcast distribution continues to be a poison pill that would block foreign control of the company.