CBC to lay off 650, shut down analog TV system July 31

Restructuring CBC/Radio-Canada to compensate for budget cuts of 10 per cent and staffing layoffs of 650 people will be a “tough job” and push the public broadcaster “to do more with less,” experts say. Last Thursday's federal budget released by Finance Minister Jim Flaherty said the CBC will be subject to budget reductions that total $27.8 million in 2012-2013, $69.6 million the next year, and reach $115 million by 2014-2015. “The CBC will have to do more with less, or about the same with less,” Amit Kaminer, a research analyst with the Seaboard Group, said in an interview. In a move to reduce costs, CBC said in a release Wednesday that it will shut down its analog over-the-air broadcasting system “sooner than anticipated,” on July 31, 2012. The move will shut down about 620 analog transmitters and provide annual savings of nearly $10 million, CBC said. Digital over-the-air TV broadcasts will continue. On Aug. 16, 2011, 15 days before Canada’s digital transition deadline on Aug. 31, the CRTC said it would give the CBC permission to continue broadcasting analog, over-the-air television signals on 22 transmitters until Aug. 31, 2012, a year after the official deadline. CBC said its analogue service is used by 1.7 per cent of Canadians and is “becoming increasingly expensive to maintain.” CBC said that, to deal with the budget reductions, it expects that upwards of 650 positions will be eliminated. “Obviously, this will have a significant impact on our services, organization and staff; we expect that upwards of 650 positions will be eliminated over three years, including 475 this fiscal year,” Hubert T. Lacroix, president and CEO of CBC/Radio-Canada, said in a statement. The Crown corporation is facing “financial pressures,” or a shortfall, amounting to $200 million, he said, plus a one-time severance cost of $25 million. “When we add up the reduction to our appropriation, unavoidable cost increases, and the investments that CBC/Radio-Canada needs to make to ensure its continued transformation into a modern public broadcaster, we actually face financial pressures amounting to $200 million over the next three years,” Lacroix said. “We expect to be able to offset that with $50 million in new revenues, which leaves us with about $150 million to account for by way of reductions and operating improvements,” he said. The broadcaster said that “in addition to better leveraging existing television adverting assets, it will aggressively pursue additional digital revenue.” CBC executive vice-president of English services Kirstine Stewart said during a conference call Wednesday that CBC programming will be affected. “With the budget reductions that we’ve been handed of $115 million, there was no way to reach that target by just efficiencies,” Stewart said. “So, unfortunately, programming will be affected in English services to the amount of $43 million.” She said the broadcaster will work to protect “banner” programs such as The Fifth Estate, which “are of the highest interest to Canadians.” Stewart said decisions on what programs to cut will occur in the next few weeks. Lacroix said during the conference call that, in total, $86 million will be cut from CBC’s English-language services, $64 million from French-language services, and $50 million from Radio Canada International (RCI) and “institutional or corporate components.” Kaminer said the CBC could look at new platforms such as the Internet to reduce costs. Moving some shows and audiences online would help the broadcaster reach more viewers and allow for more content distribution, he said. “When you do that, you lower your costs, but it opens more room for additional content on the air side, where the content used to be,” Kaminer said. “It will derive more advertising revenue from that transaction.” Kaminer said children and young adults are consuming more content online. “Creating content for them, especially kids, might make more sense in the online world than in the air transmission world,” he said. CBC said it would move the focus of its RCI service to the web. The broadcaster said it will close its RCI Russian and Brazilian departments to concentrate on five languages, French, English, Spanish, Arabic and Mandarin, which are most spoken by its audiences. “RCI will continue, on the web, to pursue its mission of disseminating Canadian democratic values abroad,” Lacroix said. Ian Morrison, a spokesman for watchdog group the Friends of Canadian Broadcasting, said in an interview that the cuts to journalism “weakens Canada’s window on the world” and that “there will be less money for in-depth investigative journalism.” “There will be more chasing fire truck news than really helping people understand what’s going on,” Morrison said. CBC said it has applied to the CRTC to add advertising and sponsorships to its two national music radio networks, Radio 2 and the French-language Espace Music. Kaminer said Radio 2 has been without ads since the 1970s but there is opportunity for revenues “even though radio is not what it used to be.” Stewart said advertising on Radio 2 was part of the broadcaster’s plans for a possible five or 10 per cent budget reduction. She said it is a priority for the broadcaster to keep Radio One a talk radio, commercial-free news source. Lacroix said in his statement that the reduced budget will not allow CBC to achieve the goals set out in its five-year strategy, which is intended to expand the Crown corporation's reach. The broadcaster must trim spending in areas including local service extensions, digital TV services, events, and cross-cultural programming projects, the release said. CBC said it will raise revenues by “leasing existing real estate and divesting of assets that are not core.” Lacroix said CBC is “very focused on our goals of becoming more distinctly Canadian, more regional, and more digital, which remain vital to the fulfillment of our role as Canada’s public broadcaster in a rapidly changing environment.” Kaminer said the CBC will survive in part because it has a great heritage and creative management. “The pie is a little smaller, but there are ways to divide that pie,” he said. Lacroix said that when he spoke to employees Wednesday, he told them the CBC should not become lost in bad news. “Our job is to take this, adjust and move on,” he said in the conference call. dgrenier@thewirereport.ca

CBC to lay off 650, shut down analog TV system July 31

Broadcast | April 4, 2012

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