Benefits package, restructuring swallow $200 mil
MONTREAL — Canuck broadcaster and cabler Shaw Communications has revealed more about the costs tied to its $2 billion takeover of rival broadcaster CanWest Global Communications in May.
On Thursday, Calgary-based Shaw reported that it paid $140 million for a benefits package, mostly to Canadian producers. Broadcast regulator the Canadian Radio-Television and Telecommunications Commission always demands such pay-outs following major takeovers.
Shaw also had to pay another $59 million for restructuring costs associated with the takeover, including lawyers fees, consultants’ fees and buy-outs to staffers let go as a result of the transaction.
Mainly due to these charges, Shaw reported a huge dip in its profit for the first quarter, with earnings dropping to $20 million, way down from $114 million a year earlier.
By acquiring CanWest’s TV assets, Shaw picked up the Global TV Network and a slew of cable channels including Showcase, History Television and The Food Network (Canada). Those assets are now housed under the subsidiary Shaw Media.
Shaw also announced Thursday that it will roll out its mobile phone service three months later than expected, likely in early 2012. That delay may be because Laurence Cooke, head of the wireless phone division, left Shaw suddenly last week just six months after being hired.