“Orgy of self-indulgence” to blame for broadcasters’ financial woes: ACTRA

The CRTC should not use its regulatory might to bail out CTV Inc., Canwest Television Ltd, and Rogers Broadcasting Ltd. for financial woes that have been largely self-inflicted, warns Canada’s actors, producers and screen writers. One union blames the problem on an “orgy of self-indulgence” that has seen private broadcasters spending too much on U.S. programming and taking on debt to finance acquisitions. CTV, Canwest, and Rogers are among 11 broadcasting groups whose licences are up for renewal. A public hearing begins April 27 to determine what regulatory concessions, if any, are needed to help over-the-air broadcasters continue to produce local programming at a time when advertising revenues are plummeting. Broadcasters have tabled several suggestions, including: eliminating Part II fees, introducing a fee-for-carriage, prohibiting BDUs’ use of local avails, eliminating or reducing their benefits commitments, allowing advertising on video-on-demand, and prohibiting advertising on the CBC. One of the more controversial recommendations, however, is to reduce their levels of Canadian programming, based on the grounds that it’s too expensive. The argument is getting little sympathy from the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Writers’ Guild of Canada (WGC) and the Directors’ Guild of Canada (DGC). In comments filed with the CRTC March 30, the unions accuse CTV, Canwest and Rogers of overpaying for foreign programming, at the expense of Canadian programming. Last year $739.7 million was spent on foreign programming—about 61% more—compared to $452.8 million on Canadian programming, representing 61% more on foreign programming, according to figures from ACTRA. “Private broadcasters bleat about the yoke of Canadian content and point to obligations to broadcast Canadian programming as the source of their woes. This is an absurd claim, especially as we know that Canadian private broadcasters pay the lowest licence fees in the world,” writes Stephen Waddell, ACTRA’s national executive director. ACTRA, WGC, and the DGC acknowledge that the global economic credit crunch has contributed to the current financial stress, but say broadcasters are equally to blame because of irresponsible spending decisions. “In an orgy of self-indulgence, they have bid up the price of U.S. programs, sometimes buying a series not because they want to show it, but to prevent their competitor from acquiring it,” said Waddell. Maureen Parker, executive director at WGC, blames some broadcasters for engaging in unwise consolidation resulting in increased debts and branding strategies that pushed away audiences because they have no appeal to Canadians. “CanWest has been suffering from an excessive debt load since it took over the Southam newspaper chain, including the National Post, in 2000. This debt delayed CanWest‘s move into the specialty broadcast sector until as a matter of survival it had to acquire the Alliance Atlantis specialty assets and pay full price for them, taking on even more debt,” Parker says in a letter to the CRTC. “In an attempt to lower their costs and increase profits required to pay down debt, CanWest rebranded its secondary network of local CH stations as the E! Network and shifted its programming from local to American entertainment magazine shows. Audiences quickly abandoned the new network and advertising revenues followed,” she said. Another reason the CRTC should avoid regulatory concessions is because of a lack of transparency by broadcasters in revealing their finances, say ACTRA, WGC, and the DGC. The CRTC has said it will not make broadcasters’ financial records public because of privacy concerns. Last month, CRTC chair Konrad von Finckenstein reiterated this stance in response to MP questions at last month’s Heritage Committee hearing. Without these records, ACTRA and its counterparts argue that informed public participation in the licence renewal hearings and equal treatment are compromised. Variously, ACTRA, WGC, and the DGC recommend the following: Current obligations for local programming should remain for the duration of the one-year licence renewal period without changes to Cancon obligations. No fundamental restructuring of regulations should take occur in the absence of a comprehensive policy discussion. The current global recession should not be used as an excuse for a massive regulatory restructuring. Discussions on expenditure ratios (the CRTC 1:1 ratio for foreign to Canadian program spending) should be postponed until the group licensing hearing next year. Disclosure of broadcasters’ financial information. Equitable Terms of Trade negotiations. The CRTC should examine the viability of the Local Programming Improvement Fund in improving prospects for broadcasters. The CRTC should look at the new regime for distant signals as a source for improving revenues for broadcasters.

“Orgy of self-indulgence” to blame for broadcasters’ financial woes: ACTRA

Broadcast | April 7, 2009

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