Bell Media, Quebecor, increase conventional TV profits

Bell Media and Quebecor Media Inc.'s conventional television stations reported profits for the 2011 broadcasting year as other conventional television stations continue to lose money, documents filed with the CRTC show. Bell's profits for the broadcast year ending Aug. 31, 2011 were $57.89 million, up from $54.1 million in 2010, according to CRTC data. The commission this month released annual returns for Canada's largest conventional television broadcasting groups. BCE Inc. subsidiary Bell Media, which owns 28 over-the-air stations, reported annual conventional TV revenues of $836.6 million for 2011. That number was down by nearly $97 million from 2010, when CTVglobemedia's stations—which Bell acquired last year for $3.2 billion— reported 2010 revenues of $933.6 million for conventional television. In an email statement provided by a Bell Media spokesman, Mirko Bibic, senior vice-president of regulatory and government affairs at Bell, suggested the slight rebound for the stations does not necessarily reflect a healthy over-the-air TV sector. “The PBIT margin for CTV’s local television stations in 2011 was less than 7%, far off historical averages and dramatically below PBIT numbers for the and pay sectors,” Bibic said. He said conventional television “continues to be in decline” despite “the fact that conventional TV represents more than 40 per cent of total television viewing and is the primary source of news and local expression for Canadians.” “Wherein a decade ago private conventional television accounted for 29% of the broadcasting industry’s revenues and 24% of its operating income, its share of revenues is now half that,” he said. “Its share of industry operating income has dropped to just 3%.” CTV’s broadcast of the 2010 Vancouver Olympic Games, which results in increased advertising revenues but also higher operating and production costs, reduced its net earnings for 2010. CTV and Rogers Communications Inc. jointly paid $153 million US for the 2010 Olympic broadcasting rights. Several of the large, conventional broadcast groups reported losses for 2011. CBC/Radio-Canada's English-language stations reported a loss of $1.37 million for the 2011 broadcast year. Its French-language stations reported a loss of $1.34 million. The public broadcaster has 27 local stations. Despite negative profits, the broadcaster reported increased conventional TV revenues for its English-language stations, which totalled $777.2 million in 2011, up nearly $57 million from the previous year. Revenues for French-language stations were $560.8 million in 2011, an increase of $21.5 million from 2010. CBC's revenue totals include funding from the $1.1 billion in parliamentary appropriations the public broadcaster receives annually from the federal government. Rogers Communications Inc., which owns the Citytv and OMNI conventional television networks, reported a 2011 loss of $203,000 for its stations. Its stations' revenues increased $51.5 million year-over-year, from $247 million in 2010 to nearly $298.5 million in 2011. Quebecor Media's conventional stations reported a profit for 2011 of $36 million. Revenues were $260.1 million for its stations for the year, up from $252.1 in 2010. Shaw Communications Inc., which owns the Global Television network, reported total conventional station revenues of $522 million for the year, up from $495 million in 2010. The company did not report net earnings. Marco Dubé, a spokesman for the CBC, attributed the public broadcaster's year-over-year revenue increase to its coverage of the 2010 FIFA World Cup as well as a rebounding economy. CBC has the Canadian broadcast rights to air FIFA sports events through 2014, including the 2014 World Cup in Brazil. In 2009, Dubé said, CBC's advertising revenues fell “quite drastically” due to the recession. Its gains since then should not be taken as a sign that Parliament should cut CBC's funding, he told The Wire Report by email. “Local television stations are crucial to the delivery of CBC/Radio-Canada’s mandate, which could not be done at the actual level of service on advertising revenues only,” he wrote. “As a whole, CBC runs a balanced budget.” Conventional, over-the-air television stations earn revenues from advertising. Many over-the-air broadcasters, including the Bell Media stations, plan to seek additional revenue in the form of carriage fees from broadcast distributors if the CRTC's value-for-signal regime is approved by the Supreme Court. According to CRTC data, private, English-language station revenues rose to $1.7 billion in 2010, up by nine per cent over 2009. Advertising revenues for private conventional French stations decreased during that time, from $286 million in 2009 to $273 million in 2010. Bibic said despite gains for the conventional television sector, advertising revenues continue to be in a slump. “As has been well documented, the economy has been extremely soft since last summer, and conventional television stations are feeling the brunt of that given that they are dependent exclusively on revenues from advertising,” Bibic said in the statement. According to a research note from RBC Capital Markets on Feb. 10, “advertising weakness” overall at Bell Media, including its specialty channels, “will likely be temporary.” RBC said consistent with other Canadian media companies, advertising revenues declined by four per cent in Bell’s fourth quarter, reflecting a “difficult” national advertising market. “On a positive note, management expects the advertising market to improve as 2012 progresses (also consistent with commentary from other Canadian media companies),” the research note said. Theresa Treutler, president and CEO of the Television Bureau of Canada (TVB), said in an interview that data from the TVB shows conventional TV advertising in Canada totalled nearly $3.4 billion in 2010. That number was up from $3.1 billion in 2009, the TVB said. “Conventional, as it has always been, is still the lion’s share of television revenues,” she said. dgrenier@thewirereport.ca

Bell Media, Quebecor, increase conventional TV profits

News | 02/15/2012 11:42 pm EST

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