💡 ecosystems of assets
💡 ecosystems of assets
+ The Big Fix book tour dates!
Last week, Rogers acquired a controlling stake in the Maple Leafs, Raptors, TFC, and the Argonauts. This announcement of changing ownership from one ‘telecom’ to another inspired grumbling about market structure in Canada. We lamented the apparent corporate capture that has come to characterise the country, and crossed our fingers that Bell’s TSN would maintain access to those games. And earlier this week, Live Nation announced that a new large-scale music venue for Toronto would be called ‘Rogers Stadium.’ Another round of memes began anew.
The good news is that Canadians are picking up on how corporate power and company ownership is reshaping the country. Ultimately, the announcement was a helpful reminder that large firms are rarely ‘one’ type of company anymore. We tend to think of Rogers as primarily a telecommunications company, but it is a company comprised of many diverse assets across varying industries. In entertainment, Rogers owns a podcast network and television and radio stations; services that capitalise on the company’s physical infrastructure. The company also has a subsidiary, ‘Rogers Bank,’ which allows the company to gather greater detail about customer purchasing habits through their credit card offerings. Search the app store and you will find two mobile applications, one for smart home monitoring and the other for TV.
Rogers’ recent sports acquisition further complexifies the company’s diverse holdings. But when sports fans were expressing disappointment, they may have overlooked a less appreciated and a more subtle shift that mirrors the growing “everythingness” of our telecom companies: Telus recently launched an energy-saving software service as part of its smart-home tech push. The Logic reported that the company is developing an all-in-one app for managing a range of energy tasks that occur at home, like security systems and EV charging. Again, we toss around Telus as a ‘telecommunications’ company, but it is also active in the health, IT, and agriculture spaces, is building rental housing, and has an investment arm that invests in startups. It’s totally intriguing, and we tend to forget about it.
These structures challenge the trope of Canada being a handful of companies in a trenchcoat. Perhaps - ahead of retiring the tired cliche altogether - we should start asking about the constellation of assets underneath each company’s cinched trench. This would allow us to be more realistic about how the composition of companies challenges our traditional approaches to competition policy. Right now, enforcers are reliant on the North American Industry Classification System (NAICs), which the Competition Bureau has acknowledged that these “do not align with the usual practices of competition law analysis and enforcement.” These codes classify companies in single industries, but today’s biggest companies often collect assets across industries, becoming everything companies.
That’s part of why we need to get beyond counting the number of companies in a particular sector, because that approach rarely offers the full picture. When we think of adding more competitors into the mix to solve a sector-specific challenge, that obscures just how difficult it will be for a new telecommunication entrant to compete head on with an ‘everything’ firm.
Concentrations of ownership don’t just happen at the company level, but also at the shareholder level. Legal scholar Allan Hutchison has determined that “around 80 per cent of all publicly traded corporations in Canada are controlled by a handful of people; this compares with about 20 per cent in the United States.” His research also shows that, because of a preponderance of dual-class share structures which have super voting rights, 70 per cent of Canadian corporations are “controlled by one or a number of related shareholders.” This essentially leads to mini-monopolies in ownership, where corporate governance is similarly constrained in its ability to offer effective democratic oversight.
Large companies are more complex than we immediately appreciate. The sprawling ownership of assets means that there is so much more than meets the eye when we make an appeal to ‘adding foreign competitors’ to solve our competition woes. And the concentration in ownership of companies means that only a few people are making business decisions that affect everyone.
Big isn’t bad, but Canadians have long bemoaned our telecoms giants - maybe for the wrong reasons. We need to recognize how the composition of large companies has changed, and how these new realities may deter new entrants from entering markets.. We now have the tools to hold our largest companies accountable under a strengthened Competition Act, passed unanimously through Parliament this year and last. But will we use them? As a reviewer for our book, The Big Fix told us “if we are going to let Rogers have a monopoly, the least they can do is give us a winning baseball team.”
Denise Hearn and I are going on 'tour’ next month with The Big Fix: How Companies Capture Markets and Harm Canadians. We’d love to see you at one of the following events:
October 15th – Vancouver – UBC Robson Square with Paul Haavardsrud (register)
October 16th - Edmonton at Audrey’s Books with Andrew Leach at 7.00 (no registration)
October 24th – Montreal – Omni Hotel, 5.00 pm w/ Justin Ling (register)
October 29th – Toronto – TIFF Lightbox, 5.00 pm w/ Nam Kiwanuka (register)
October 31st – Toronto - Lunch time talk at the Dais, Hallowe’en theme (register) 🎃
November 13th – Ottawa, 7.00 pm at Perfect Books, by invitation with CIGI (email me!)
Lately is back! This week’s episode is all about how a brutal business model still keeps attracting good people in a bad economy, with Peabody and Emmy-award winning journalist Jane Marie.
Last week’s was all about the how productivity apps are popping up in our personal lives, and what we might miss when we try to optimize our life at home, with British author and journalist Oliver Burkeman. He tries to help us build a meaningful life in an age of bewilderment.
My column this month in the Globe and Mail is about the expansion of algorithmic wage discrimination.
AND (!) I’m co-hosting a weekly tech policy show with Paul Samson, the President of CIGI. Our first episode is with Stanford’s Marietje Schaake about her new book, The Tech Coup: How to Save Democracy from Silicon Valley. This Monday’s episode is a banger on the influencer economy. 😉
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