The struggling Sun News Network suffered another blow this week after Canada’s broadcast regulator ruled against it in a payment dispute with Rogers, the country’s largest cable company.
The CRTC sided with Rogers in hearings to determine how much the cable company should pay Sun News, which says it is fighting for all news services to be treated fairly, regardless of their editorial stance.
The decision denies the financially troubled news network a deal that would have helped to shore up future revenue for the channel, which has run up losses in the $16-million to $18-million range annually.
The network has been renegotiating contracts after a CRTC decision required all cable providers to offer the channel to their viewers by May, but denied Sun News mandatory carriage on basic cable subscriptions. The network’s vice-president, Kory Teneycke, has said that without mandatory carriage, the network was facing “a death sentence."
Sun wanted cable companies to pay different rates depending on whether the channel was offered in a specialty package or on basic cable, as an incentive for distributors to carry it more widely. Rogers said that Sun News’ proposed rate (which was omitted from the ruling) would “greatly exceed” how much it is paid by Rogers competitors such as Shaw and Bell.
The CRTC ruled that Rogers’ offer "represents a more reasonable rate."
Rogers spokeswoman Patricia Trott called it “the right outcome” on Friday.
“We worked hard and creatively to develop an offer that more than fairly compensates Sun News and incents the channel to continuously improve its on-air product – and we’re pleased that the CRTC endorsed this approach.”
Quebecor, which owns Sun News, could not be immediately reached for comment.
Rogers’ win means it will pay Sun News based on the same model it uses to determine the rate of pay for competitors like CTV News Channel and CBC News Network — the more viewers a channel gets, the more Rogers pays.
The problem for Sun News is that its audience is a fraction of its competitors. Sun argues it has been historically disadvantaged because it was buried in higher channels.
The CRTC’s refusal to consider how channel ratings are calculated “is inherently prejudicial to Sun News given its vastly inferior distribution and channel placement when compared to its competitors,” Teneycke said in a July letter to the regulator.
The CRTC previously ruled that cable companies had to include all national news specialty services in the best available package consistent with their genre and programming — but stopped short of saying theyhad to be available on basic cable.
Sun News argued that it was unfair to compare the fledgling network to its long-established competitors because it is only distributed in 40 per cent of Canadian homes, while its competitors were in 100 per cent.
Sun News had also wanted the CRTC to consider the faults it found with Rogers’ distribution of the network, but the regulator refused, saying the parties would have to negotiate those terms on their own.
“It is our view that grossly different treatment of Sun News both in price AND distribution is not consistent with the new framework, nor is it viable for Sun News as a business,” Teneycke said in his July letter.
The dispute was brought to the CRTC in July by Sun News after the two sides reached an impasse over the rates.
In another related case against Telus, the CRTC sided with Sun News, saying it was the superior proposal in that case.
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Controversy surrounding the Sun News Network began even before the network went on the air in April, 2011. The Globe and Mail reported in the summer of 2010 that CRTC chairman Konrad von Finckenstein was under pressure from the Prime Minister's Office to resign, in order to pave a smooth path for Sun News to be granted a licence by the regulator. Finckenstein denied the allegations.
With concerns swirling about the possibility of a PMO-driven political agenda at Sun News, the activist site Avaaz launched "Stop Fox News North," a campaign to pressure the CRTC to deny a licence to the news network. The network responded by citing Avaaz's U.S. roots and noting that left-wing billionaire George Soros has contributed to the group, in an apparent effort to discredit the petition as a "U.S. import."
Future Sun News personality Ezra Levant went further than most in his criticism of Avaaz and its links to George Soros (pictured above). Levant suggested in a column that Soros, who is Jewish, aided the Germans in the Holocaust as a teenager. After receiving a letter from Soros' lawyers threatening to sue, the Sun newspapers ran a retraction.
Sun News was on the air for only about six weeks when its first major controversy erupted. The CRTC received a record 6,676 complaints from viewers after host Krista Erickson aggressively challenged dancer Margie Gillis over the issue of whether artists should receive taxpayers' money in the form of grants. The Canadian Broadcasting Standards Council eventually ruled Erickson was within her rights to express her opinions during the interview.
Sun News has made the CBC's public funding a signature issue, repeatedly attacking the network for taking $1 billion per year in taxpayers' money while competing against private-sector broadcasters. But the CBC is fighting back. It put out a press release noting that Quebecor, Sun's parent company, enjoyed $500 million in subsidies over five years, and argued that -- unlike the CBC -- it is not publicly accountable to taxpayers.
Ezra Levant got himself in trouble again in December, 2011, when he responded to Chiquita Bananas' declaration it wanted to avoid oil from the oil sands. "Chinga tu madre," Levant said to Chiquita -- a phrase that translates as "f--k your mother." The Canadian Broadcasting Standards Council declared Levant's outburst a violation of ethics standards.
Canadian journalism reached an embarrassing nadir in the spring of 2012 when it emerged that a citizenship reaffirmation ceremony broadcast on Sun News had been partially staged. Six federal bureaucrats had posed as newly-sworn Canadians during the event that had been reportedly requested by Immigration Minister Jason Kenney. Kenney's office apologized to Sun News. Government officials later alleged Sun News was aware of the bureaucrats posing as new Canadians.
Sun News applied for a "mandatory carriage" licence in the fall of 2012 that would require cable and satellite operators to carry the network as part of their basic cable package. Though neither CBC News Network nor CTV News Channel currently enjoy mandatory carriage, they did when they first started out, as Sun News has pointed out.
Sun News reported in January, 2013, that it lost $17 million in 2012, due to weak revenue because the channel is only carried in 40 per cent of Canadian homes. Parent company Quebecor is saying the network will continue to lose money unless its request to the CRTC for mandatory carriage on basic cable is granted. Pictured: Quebecor CEO Pierre-Karl Peladeau
Sun News personality and well-known right-wing pundit Ezra Levant issued a formal, on-air apology after a September, 2012, segment in which he declared that the Roma were not a race, and were rather "a shiftless group of hobos" who "rob people blind" and whose "chief economy is theft and begging." The Toronto police reportedly even launched a hate-crimes investigation into the segment, at the request of a local Roma group.
In August 2013, the CRTC, Canada's telecom regulator, rejected Sun News' application for mandatory carriage. The network had asked the CRTC to make them a mandatory part of all basic cable services, arguing it would not survive financially without it. Though the CRTC rejected the Sun News application, it also launched a review of the rules surrounding cable news networks. Among the possible outcomes are a realignment of channels so all news channels are grouped together on the dial, and the possibility of a "must-carry" order for Sun News, which would mean that all TV service providers would have to at least offer the network. Pictured: CRTC Chair Jean-Pierre Blais
On Friday, Feb. 13, 2015, Sun News went off the air, less than four years after its debut broadcast. Sun News personalities blamed the failure on the CRTC's decision not to grant the network mandatory carriage, and on cable companies' reluctance to give the network prominent placement on the dial, but analysts said the network's poor ratings and annual losses were the driving factor in the decision.