By Ahmad Hathout
Rogers filed a confidential application in May requesting the CRTC lift a standstill and allow it to remove several undisclosed Corus specialty channels primarily related to children’s programming from its television rotation due to underperformance, according to court documents on which Cartt can now report.
The documents in the Ontario Superior Court show that the CRTC had previously ordered a standstill in September 2023, indicating a carriage dispute between the two, and then reaffirmed it on May 30 and August 5, 2024. That means Rogers must continue carrying the channels until either the issue is resolved by the parties or the CRTC, which hasn’t released a decision on the matter, adjudicates.
Since that application, the documents show, Rogers said it notified Corus that it intends to stop carrying 12 additional channels, some of which have content rights the cable giant secured from Warner Bros. Discovery (WBD) and NBCUniversal a little over two weeks after the confidential CRTC application. Those are DTOUR, DejaView, H2, MovieTime, Nat Geo Wild, Treehouse, YTV, Cooking Channel, Food Network, HGTV Canada, Magnolia, and Slice – the last five are all affected by the Rogers licensing deal.
The rights deal is just one reason why Rogers says it wants to shuffle Corus channels out. “Rogers has outlined a number of valid commercial reasons for dropping the impacted channels – among other things, because of the significant and rapid decline in their popularity and viewership, their failure to compete effectively against online services, and Corus’ lack of investment in the channels,” Jason Fortino, Rogers’s vice president of product and content, said in a September 18 affidavit.
This information can now be revealed because an Ontario Superior Court judge on Tuesday denied a request by Corus for a sealing order that would have prohibited the publication of certain details of the carriage dispute. Crucially, the judge also denied Corus’s application to restrain Rogers from unilaterally removing one particular channel at the centre of the dispute – Slice.
It all started in late August, when Corus filed an application asking the Ontario court to stop Rogers from both announcing and removing from certain Rogers TV packages the Slice channel, which Rogers says carries a significant source of “Bravo” content that Rogers purchased from NBCUniversal this summer and launched under its brand in September.
Corus said it was concerned that Rogers was going to notify its subscribers in September about – and then commit to – the removal of the channel, despite an outstanding standstill at the CRTC. The media company also doesn’t believe Rogers has the right, per their distribution agreement, to unilaterally remove the channel – distributed to roughly 855,000 Rogers east subscribers – from 60 per cent of its TV packages. (Rogers said the channel will remain on any existing theme packs and grandfathered flex packs, which it phased out.)
Rogers believes it is wholly within its right to repackage the channel at its discretion, under the distribution agreement and regardless of the existence of a standstill.
Corus had requested the court step in and order Rogers to cease removing the channel before a CRTC decision is made. Corus’s concern is that if Rogers removes the channel, it will signal to the industry – advertisers in particular – that the channel is undesirable.
“The Bravo content was, by far, the most important draw for subscribers tuning into Slice,” Fortino said in the affidavit, adding the channel has lost its value proposition as a result and it doesn’t make commercial sense to keep it.
Fortino appended a chart showing the top 20 shows on Slice by “average minute audience” from May 29, 2023 to June 23, 2024 were Bravo programming. Rogers further claims that its internal data show that 97 percent of the video-on-demand content Rogers subscribers watched on the Slice channel was Bravo programming.
“It is critical for Rogers to maintain its ability to respond to evolving consumer preferences, demands, and tastes and to changes in the media and entertainment landscape,” Fortino said in the affidavit. “Rogers – not Corus – has the direct relationship with our subscribers, and under no circumstances would we grant Corus a veto right over packaging, which is a fundamental aspect of our business.”
Rogers agreed to forego notifying its subscribers about its intention to remove Slice until Tuesday’s decision, which ruled – based on the reading of the distribution agreement – that Rogers has the right to make the necessary TV package changes. But the court did not tread into the CRTC’s standstill territory, which is outside its domain.
By way of background, Rogers and Corus have two distribution agreements: one for western Canada and one for eastern Canada – the latter is the one at issue but both agreements are set to expire by the end of the year.
At issue is section 3(a) of the eastern Canada agreement, which provides that “Rogers may, at its sole option, freely create retail product packages and/or bundles that include the [Corus] Services.”
Rogers argued that this subsection gives it the ability to unilaterally (“at its sole option”) remove the Corus channel, while Corus argued that the word “create” cannot, by dictionary definition, mean “remove.”
The judge rejected Corus’s interpretation because it requires that Rogers’s right apply only to new packages when the word “new” doesn’t exist in the subsection.
“Corus has made selective use of applicable dictionary definitions,” the decision said. “First of all, the act of ‘making’ or ‘forming’ something has an expansive meaning; it may involve generating something brand new, but it also embraces the idea of modifying, reducing or expanding something already in existence.
“Corus also neglects other, even more expansive definitions of the word ‘create’, e.g., ‘to produce or bring about by a course of action or behavior’, ‘to produce through imaginative skill’, and ‘to cause to happen; bring about; arrange, as by intention or design,’” the court added. “These definitions do not suggest the narrow meaning that Corus seeks to apply to section 3(a). Removing a channel from a television package easily fits within the concept of ‘making’, ‘forming’, ‘bringing about’ or ‘arranging’ a package of television offerings.”
The court also used the western Canada agreement to point out that Corus already knew how to restrain Rogers from removing channels unilaterally but didn’t. Before Rogers purchased Shaw, Corus negotiated a limitation on Shaw when it came to changing its television packages. In 2019, Shaw was required to provide 120 days written notice of any packaging change; in 2022, it further limited Shaw by restraining it from removing any channel from a package unless the distributor eliminates the package altogether.
Corus also argued that Rogers hadn’t identified any prior instance where it has removed a Corus channel without the media company’s express consent. Corus relied on section 3(c) of their agreement to argue as much: “Rogers will make good faith efforts to provide [Corus] with a consultation right regarding [launch of any new programming packages] and the opportunity for [Corus] to provide feedback regarding such packages and Rogers will provide reasonable consideration regarding such feedback.”
Corus argued that these provisions were built into the agreements to provide revenue predictability for the media company, which has been struggling financially as of late.
Beside finding that Rogers has “no free-standing, contractual obligation” to provide such predictability, the court said the argument isn’t helpful anyway. “Rogers has not unliterally removed a Corus channel from one of its television packages before because Corus has never lost a significant service like the ‘Bravo’ content before,” the decision read.
A spokesperson for Rogers told Cartt the company is “pleased” with the decision.
The decision also noted that the distribution agreements include stipulations that the parties would be subject to CRTC regulations. The Ontario court said it doesn’t have jurisdiction for judicial review over the regulator; that domain is with the Federal Court.
Even if it did have jurisdiction, the court ruled that the test for an injunction was not met: “While there may be a serious issue about whether the standstill provision prohibits Rogers from removing the Channel, there is utterly no evidence to demonstrate irreparable harm,” the court said.
“While we are disappointed with the Court’s decision, this reaffirms the CRTC’s jurisdiction on these matters, and we look forward to direction from the CRTC in the near-term,” a Corus spokesperson told Cartt. “As we have said on a number of occasions, Corus is pursuing all avenues to protect its rights and combat anti-competitive practices in Canada’s broadcast industry.”
Before Corus filed its court application, it lodged a complaint to the CRTC alleging Rogers is abusing its “dominant position” by preferencing its certain services over Corus’s – in particular how it displays Disney+, which Rogers does not own, over Corus’s Disney-themed channels. The objective, Corus alleges, is to imperil independents like itself.
Rogers called the complaint “baseless.”
“Sadly, Corus has not kept up with the demands of Canadians and is now looking for the regulator to protect their broken business model while we’re focused on meeting our customers’ changing viewing habits,” the company told Cartt’s sister publication, Broadcast Dialogue, at the time. “This baseless complaint is designed to prevent us from providing Canadians with the content they want on their platform of choice. They’re trying to force service providers to carry and our customers to pay for channels they no longer want to watch. They need to compete in a fair system and earn each customer, just like every other company.”
Rogers has previously indicated that the decline in viewership on children’s programming has significantly outpaced overall television viewership. It had pointed to Numeris data that showed viewership of Corus’s four Disney-themed channels have seen a dramatic decline as families move to online streaming options.
“The other party has clearly demonstrated their fear of healthy competition, as evidenced by their relentless efforts to drive competition out of Canada, particularly considering Slice continues to outperform the competition and exceed audience expectations,” the Corus spokesperson told Cartt.
Corus said Numeris data show Slice reaches nearly three times more Canadians every week versus Rogers’s Bravo Canada (measured between September 2 and October 20, 2024) and has experienced a year-over-year growth of three per cent in overall average minute audience (AMA) and over 90 per cent more overall AMA compared to Rogers’s Bravo since its launch (measured between September 1 and October 20, 2024).
Corus executives have said in quarterly earnings calls that it will make up for the loss of the content rights this summer. It unveiled in September two new lifestyle channel brands – Home Network and Flavour Network – to make up for Food Network Canada and HGTV Canada. It also secured the rights to The Daily Show hosted by Jon Stewart, which will run on Slice.
Before losing key brand rights to Rogers, Corus was granted regulatory relief from the CRTC on exceptional grounds because of its troubling financial condition.
