Squeezed broadcasters to seek breaks from CRTC by Grant Robertson
Source : Globe & Mail
November 24, 2008
Canada's national television networks are expected to ask federal regulators for leniency on their broadcast licences in the coming months, setting the stage for a potentially fiery debate as media companies look to cut costs.
The arguments will be submitted to the Canadian Radio-television and Telecommunications Commission in January by CTV and Global Television, ahead of licence renewal hearings that will be held in April.
Sources have indicated that a push will likely be made to have certain local programming requirements eased. The CRTC requires broadcasters produce local shows, such as news, but the networks argue it has become too costly in small markets to continue.
The CRTC is already bracing for the argument, which is seen as a bargaining tactic ahead of the hearings. The CRTC has noted that the big broadcasters remain profitable as a whole, though smaller markets are challenged.
Faced with a rapidly declining ad market, several media companies are now cutting costs to cope with shortfalls, including CTVglobemedia Inc., CanWest Global Communications Corp., Corus Entertainment Inc. and most recently, the public broadcaster CBC.
"Ad spending is dwindling; in fact, some of the traditionally biggest ad spenders are on the verge of corporate meltdowns, [General Motors] for example," Hubert Lacroix, chief executive officer of CBC, said in a memo to staff Friday. "Our revenue streams are taking a hit; we are currently projecting a deficit in our television operations, though not to the extent of our competitors, and our levels of federal funding are never guaranteed."
Several industries, from banks to manufacturers, are slashing costs to deal with a slowdown. The wave of belt tightening hit the media sector this month, beginning with CanWest, which announced it was cutting 560 jobs, followed by CTVglobe, which halted discretionary spending and indicated it would likely cut jobs. Corus followed suit by telling staff it was also curtailing spending.
CTV and Global have argued to the regulator that news production in small markets has become a financial burden, since it no longer draws audiences or advertisers as it once did. In response, the CRTC last month set up a $61-million fund for local news that small market broadcasters can draw upon, fed by revenue from cable and satellite distributors.
However, the networks argue the fund won't help, since it gives money only to stations that increase spending on local programming, and cash-strapped stations are unlikely to be boosting expenditures.
The issue could result in tense hearings, since the broadcasters will likely raise the example of TQS, a Quebec TV network that was purchased out of receivership last year. In a controversial decision, the CRTC let the new owners scale back local programming for three years to save costs. The news division at TQS was slashed, though the broadcaster agreed to do a current events panel show.
The networks must have their licences renewed every seven years and, given the slowing economy, it is expected CTV and Global will seek concessions for small markets, a move that would upset media guilds and unions.
Such a move would also face CRTC opposition. In a dissenting opinion filed recently opposing the regulator's creation of the small-market fund, CRTC commissioner Peter Menzies wrote the regulator should not allow broadcasters to use programming requirements as a bargaining chip.
"Holding the fundamental objectives of the [Broadcasting Act] hostage is not behaviour that should be tolerated were it ever to be identified, for instance. Nor should ransom be paid," Mr. Menzies wrote.
© Globe and Mail
The arguments will be submitted to the Canadian Radio-television and Telecommunications Commission in January by CTV and Global Television, ahead of licence renewal hearings that will be held in April.
Sources have indicated that a push will likely be made to have certain local programming requirements eased. The CRTC requires broadcasters produce local shows, such as news, but the networks argue it has become too costly in small markets to continue.
The CRTC is already bracing for the argument, which is seen as a bargaining tactic ahead of the hearings. The CRTC has noted that the big broadcasters remain profitable as a whole, though smaller markets are challenged.
Faced with a rapidly declining ad market, several media companies are now cutting costs to cope with shortfalls, including CTVglobemedia Inc., CanWest Global Communications Corp., Corus Entertainment Inc. and most recently, the public broadcaster CBC.
"Ad spending is dwindling; in fact, some of the traditionally biggest ad spenders are on the verge of corporate meltdowns, [General Motors] for example," Hubert Lacroix, chief executive officer of CBC, said in a memo to staff Friday. "Our revenue streams are taking a hit; we are currently projecting a deficit in our television operations, though not to the extent of our competitors, and our levels of federal funding are never guaranteed."
Several industries, from banks to manufacturers, are slashing costs to deal with a slowdown. The wave of belt tightening hit the media sector this month, beginning with CanWest, which announced it was cutting 560 jobs, followed by CTVglobe, which halted discretionary spending and indicated it would likely cut jobs. Corus followed suit by telling staff it was also curtailing spending.
CTV and Global have argued to the regulator that news production in small markets has become a financial burden, since it no longer draws audiences or advertisers as it once did. In response, the CRTC last month set up a $61-million fund for local news that small market broadcasters can draw upon, fed by revenue from cable and satellite distributors.
However, the networks argue the fund won't help, since it gives money only to stations that increase spending on local programming, and cash-strapped stations are unlikely to be boosting expenditures.
The issue could result in tense hearings, since the broadcasters will likely raise the example of TQS, a Quebec TV network that was purchased out of receivership last year. In a controversial decision, the CRTC let the new owners scale back local programming for three years to save costs. The news division at TQS was slashed, though the broadcaster agreed to do a current events panel show.
The networks must have their licences renewed every seven years and, given the slowing economy, it is expected CTV and Global will seek concessions for small markets, a move that would upset media guilds and unions.
Such a move would also face CRTC opposition. In a dissenting opinion filed recently opposing the regulator's creation of the small-market fund, CRTC commissioner Peter Menzies wrote the regulator should not allow broadcasters to use programming requirements as a bargaining chip.
"Holding the fundamental objectives of the [Broadcasting Act] hostage is not behaviour that should be tolerated were it ever to be identified, for instance. Nor should ransom be paid," Mr. Menzies wrote.
© Globe and Mail
