Shaw 2011 Annual Report Download - page 17

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
(iii) Media
In May 2010, the Company entered into agreements to acquire, subject to various regulatory
approvals, 100% of the broadcasting business of Canwest Global Communications Corp.
(“Canwest”) including CW Investments Co. (“CW Media”), the company that owned the
specialty channels acquired from Alliance Atlantis Communications Inc. in 2007. During 2010,
the Company completed certain portions of the acquisition including acquiring a 49.9% equity
interest, a 29.9% voting interest, and an option to acquire an additional 14.8% equity interest
and 3.4% voting interest in CW Media for total consideration of approximately $750 million,
including acquisition costs. Also during 2010, the Competition Bureau cleared Shaw’s
acquisition and the Ontario Superior Court of Justice issued a sanction order approving the
related consolidated plan of compromise, arrangement and reorganization. In late October 2010
the CRTC approved Shaw’s application to assume control of Canwest’s broadcasting business
and the outstanding portions of the acquisition closed on October 27, 2010. The total
consideration, including debt assumed, was approximately $2.0 billion.
In 2010, the portion of the investment acquired during that year was accounted for as an equity
investment. In 2011 the Media results were equity accounted until October 27, 2010, at which
time the balance sheet and results of operations were consolidated.
The acquisition of Shaw’s Media business included the Global Television Network (“Global”),
and a leading portfolio of Specialty services. Technology is driving change in the Canadian
Broadcasting system, transforming content distribution and viewership. This strategic
acquisition allows Shaw to unite broadcasting services and content with its advanced
distribution platforms to offer customers strong choices in this rapidly evolving landscape.
The Canadian television broadcasting market is comprised of a number of English, French, and
third language stations and services that operate in different segments of the market. The
“Conventional” broadcast sector includes government owned public networks, such as the
Canadian Broadcasting Corporation (“CBC”), as well as privately owned station groups and
networks, such as Global and the CTV Television Network (“CTV”). The “Specialty and Pay”
sector includes Specialty television services, such as Showcase, History, HGTV Canada, TSN
(owned by CTV), and Sportsnet (owned by Rogers Communications Inc), which provide special
interest programming including news, sports, arts, lifestyle and entertainment programming.
Global reaches over 95% of Canada’s population through 12 over-the-air (“OTA”) conventional
television stations. Global offers a programming mix of entertainment programs and news that
includes hit programs such as House, the reality series Survivor, NCIS:LA, and Glee. Global
offers news through its early-evening network newscast Global National, which garners almost
one million viewers every weekday, and delivers local news programs to a number of markets.
Global is planning to expand its news line-up in 2012 with the launch of morning news
programming in select cities across Canada. In 2011 Global also launched the Global Video
application, compatible with the iPad, iPhone and iPod Touch, which offers viewers an exciting
new way to access the network’s library of premium content.
The Specialty television services owned and operated in the Media division comprise 18
channels, including Showcase, HGTV Canada, Food Network Canada, Slice and TVtropolis. The
Company also has an interest in various non-operated channels including two French language
specialty television services and two English language specialty television services.
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