Shaw Communications Sees No Halt to Industry Consolidation

Despite the CRTC rejecting BCE's $3.38 billion takeover of Astral Media on competition grounds, the cable giant insists vertical integration is still on the cards north of the border.

TORONTO – Continuing vertical integration in the Canadian media sector is still on the cards, despite the CRTC rejecting BCE/Bell Canada’s $3.38 billion takeover bid for Astral Media.

That was the conclusion Thursday of Brad Shaw, CEO of Shaw Communications, the western Canadian cable giant, which could yet seek a merger with Corus Entertainment, a broadcaster in which the Calgary-based Shaw family has a controlling stake.

But not just yet, Brad Shaw told analysts after his company released its fourth quarter financial results.

“We realize there's some value and some synergies there (with Corus), but strategically, if the family feels it's right and have the right time to do it, we'll look at it,” he said.

Shaw added the CRTC ruling on the Astral Media deal was about BCE/Bell Canada, rather than reversing course on industry consolidation.

“It seemed to be somewhat more of a Bell-focused decision when you look at it, not so much against VI (vertical integration) in the industry,” he told analysts.

The Shaw family, which also controls Shaw Communications, in 1999 spun off its media assets to create Corus Entertainment.

The CRTC blocking BCE’s proposed deal for Astral Media appears to have put the breaks on industry consolidation that in recent years has seen phone and cable giants acquire indie broadcast content to drive down their pipes.

That trend included Shaw Communications two years ago acquiring the former Canwest Global Communications Corp.’s TV assets and rebranding them as Shaw Media.

Shaw Communications for the fourth quarter to Aug. 31 reported a profit of $133 million, down 20 percent from earnings of $167 million in 2011, on combined revenue up 2.5 per cent to $1.21 billion during the latest frame.