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Cable television broadcasting industry

Torstar Concerned About Ted Rogers' Cable Monopoly Plans

Strategic Insights

— 2 min read

Torstar Corp., the owner of The Toronto Star, is worried that Ted Rogers' $3-billion takeover bid for Maclean Hunter Ltd. could lead to a monopoly on cable television in Canada's largest city, potentially giving him extensive publishing interests as well. David Galloway, Torstar's co-chief executive officer, expressed concern about the growing power of cable-TV companies, stating that it puts "an awful lot of power in one person's hands." If Rogers consummates the deal and swaps cable systems with Shaw Communications Inc., he will control almost the entire Metropolitan Toronto market, and most of Southern Ontario's. This could allow Rogers to put a dent in the Star's vital classified advertising base, as fledgling cable advertising channels become attractive to advertisers.

Key Takeaways:

  • Torstar Corp. is concerned about Ted Rogers' $3-billion takeover bid for Maclean Hunter Ltd. due to the potential for a monopoly on cable television in Canada's largest city.
  • The deal would give Rogers control of almost the entire Metropolitan Toronto market, and most of Southern Ontario's cable services.
  • Analysts believe a solid hold on all of Toronto's cable service could help Rogers put a dent in the Star's classified advertising base.
  • Fledgling cable advertising channels could become attractive to advertisers if they can offer a single buy for all of Toronto rather than dealing with various operators.
  • The Canadian Radio-television and Telecommunications Commission may eventually allow cable channels to use full-motion video rather than still images, making them even more attractive.
  • There has been speculation that Torstar might get involved in the bidding for Maclean Hunter to protect its interests, but David Galloway has denied any plans to do so.
  • A senior media executive has complained that cable operators are abusing their clout, citing guaranteed profits and territorial monopolies that give them an unfair advantage.
  • The Shaw Communications CEO, James Shaw Jr., indicated that he struck the deal with Rogers partly because he thinks the latter's takeover bid will succeed.

Statistics:

  • $3 billion: The value of Rogers' takeover bid for Maclean Hunter Ltd.
  • Almost 100%: The potential control of Metropolitan Toronto market that Rogers would have if he consummates the deal and swaps cable systems with Shaw Communications.
  • 3.5 billion: The amount of money required to make a bid for Maclean Hunter (source: David Galloway)
  • Guarenteed profits: The advantage cable companies have over other media companies, leading to expansion and forceful business practices (source: Senior media executive)
  • 90% or higher: The potential market share Rogers would have in Southern Ontario's cable services.

Sources:

  • The Globe and Mail
  • The Toronto Star
  • David Galloway, Torstar co-chief executive officer
  • James Shaw Jr., Shaw Communications CEO
  • Senior media executive (name not mentioned)

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