CRTC must protect existing recipients of local news fund money before adding more, commenters say

The CRTC needs to make sure money provided to existing recipients of the Independent Local News Fund is protected before adding other beneficiaries such as Corus Entertainment Inc. to the pot, the regulator was told by several groups responding to its proceeding on the matter. The CRTC announced in July that it is “prepared” to reconsider the eligibility requirements of the fund, which was established in 2016 to support independent local news stations that are not part of large-scale companies. In 2023, the fund saw more than $17.8 million given to private independent stations to produce local news. The CRTC said it is now reconsidering who else could be eligible to get that money because of its decision to require online streaming services generating over $25 million in annual Canadian revenues to contribute 1.5 per cent of those revenues to the fund — thereby increasing the amount of cash available to local producers by an estimated $42 million annually. The Aboriginal Peoples Television Network (APTN) is vying to be one of those providers. The broadcaster stated in its comments that Indigenous communities have not been well-served, historically, by conventional TV producers — which is part of the reason APTN was established as a national network in 1999 and provided with mandatory basic distribution across broadcast distribution undertakings (BDUs). Despite its status as a national network, the broadcaster argues that it functions as the “de facto local news provider for many Indigenous communities.” It is supporting the addition of TV news programming that is produced by and for Indigenous peoples to the eligibility requirements of the local news fund. APTN said it knows it is not necessarily the same as a locally-based TV service and that there are Indigenous-controlled and produced current affairs programming offered on other Indigenous regional or community services, including by its member societies that offer programming, much of which is broadcast on APTN. However, the broadcaster argues that it is the only daily source of TV news by and for Indigenous people that includes regular coverage of events occurring in and around communities that receive “very little exposure” on other news services. “Because of this, APTN believes it should be considered comparable in scope and intent to local programming offered by conventional local TV stations,” it wrote. So, rather than basing local-news eligibility on geography, it could be based on programming that relates specifically to an identifiable Indigenous community, it argues. APTN further estimates more than half its news and current affairs coverage, perhaps as much as 70 per cent, originates from or relates to communities outside an urban area, including investigative content. Some other commenters to the CRTC proceeding, however, appear more in favour of protecting the specific local-market aspect of the fund. The Friends of Canadian Media group believes recipients should be required to have a physical presence in underserved markets, including seven-day-a-week original local news coverage distinct to the market, and editorial decisions being made directly in the market. That’s in addition to full-time journalists on the ground, operating a news bureau or “news-gathering office” in the area. It also wants the CRTC to limit eligibility to Canadian-owned and controlled broadcasters, with labour expenses going specifically to employees, not freelancers, who spent at least 75 per cent of their working time on original news content. Friends of Canadian Media said it is open to expanding the fund to include Corus and other audiovisual providers of locally reflective news and information programming, however, priority must be on local news in smaller and underserved markets, and a cap on new entrants might be appropriate. Mixed responses over Corus’ proposed inclusion in fund The CRTC said in its July call for comments that while its “preliminary view” is that Corus’ Global should be eligible for the fund, it is also concerned about the impact of counting it. Corus expressed a desire to get in on the funding in 2023 for 15 of its Global TV stations, saying it would lose out on $13 million annually in funding it had been receiving from its former parent company Shaw Communications Inc., after that company was acquired by Rogers Communications Inc. Friends of Canadian Media is on board with the now-independent Corus becoming eligible for money from the fund, pointing out that Corus lost its status as a vertically integrated entity. It said it would be appropriate for Corus to receive funding that would, at a minimum, replace the $13 million Corus lost, as long as existing fund recipients would not be impacted. That said, the group also recognizes Corus does still have the advantages of a large multi-station group. “These advantages should be taken into account in creating an equitable distribution formula,” the group wrote. The friends group does additionally warn the CRTC that if Corus were allowed to access the fund, its eligibility could be scrutinized by vertically integrated broadcasters as precedent-setting. The national workers’ union Unifor agrees with Friends on including Corus in the fund, and says it should receive at least $13 million to offset what it lost if there is enough to go around without hurting existing fund recipients. “Under no circumstances should current recipients receive less funding than they currently receive,” it said. Unifor also argues that, if there is room in the fund after potentially including Corus, the CRTC should consider funding small market stations that are owned by vertically integrated broadcasters such as those under BCE Inc. and Rogers Communications Inc., saying that would replace money lost with the shuttering of the Small Market Local Programming Fund. After those proposed priorities are met, then other new entrants to the fund court be considered, Unifor argued. But if there is not enough money to go around to support all recipients, including new ones, then the CRTC should reduce funding levels for new recipients that operate in well-served metros or benefit from “certain corporate synergies.” For example, while Corus is not vertically integrated, it does benefit from having a national reach, it argued. There were some objections to Corus’ inclusion. Channel Zero, a licensee of CHCH-DT in Hamilton, Ont. and its retransmitters, says various funds have been integral to its own success over the past 5 years. Channel Zero argued that before Corus could be considered eligible, the CRTC should wait until money starts flowing to the fund as expected by the commission since it decided to require online streaming services generating over $25 million in annual Canadian revenues to contribute 1.5 per cent of those revenues to the fund. “Without the anticipated new funding from online services, adding Corus to the list of recipients would be catastrophic for current recipients,” it said. Channel Zero pointed to numbers showing the fund distributed $21.7 million in the 2018 broadcast year, which declined to $17.8 million in the 2023 broadcast year. It believes recipients have been able to weather that decline, in part, because of the reduction in the number of eligible recipients to the fund, as well as a one-time boost in funding from Rogers. For its part, Bell says it is disappointed the CRTC has indicated it will not expand the local news fund eligibility to include vertically integrated broadcasters, such as Bell Media. These broadcasters “are the main producers of news, including local news, in the country,” Bell wrote. “The commission recognizes that the production of news has become more difficult due to increased costs and declines in advertising revenue. However, it implies that this issue only affects the independent broadcasters rather than the entities because the latter ‘benefit from being able to re-direct funds towards television news.’” Bell argues that vertically integrated broadcasters are not immune to challenges faced by the industry, highlighting loss of advertising revenue as a shared struggle. It uses figures demonstrating internet stakeholders hold a 68 per cent share of the advertising market in Canada, “with Google and Meta controlling 80 per cent of that share.” Bell calculated its own related news operating losses from $28.4 million to $40 million between 2016 and 2023. “Without a doubt, this has negatively impacted the health of local television stations, with a cumulative loss of about $204 million for all our conventional television stations in 2023.” Meanwhile, contributions from broadcasting distribution undertakings declined by 40 per cent between 2018 and 2023, Bell wrote, “and those contributions fail to minimize the losses of news businesses.” “The market advantages are now in the hands of foreign streamers that are part of multi-billion-dollar companies benefiting unlimited resources to develop, market, and promote content without any regulatory burden to bear,” Bell wrote. Bell also wants to see more urgency in the CRTC’s consultations on the overall state of broadcasting news, which is to begin in spring 2025. “As we currently see with Corus, waiting too long to provide any relief and support to broadcasters could lead to catastrophic financial health for the major Canadian broadcasters.” Bell wants to see the CTRC flow funding to more players, including vertically integrated broadcasters, as soon as possible, as well as provide relief on the regulatory side to give broadcasters more flexibility and to give us a better chance to compete with streamers. “Traditional broadcasters – all of them, not just independent broadcasters – cannot afford to wait years for meaningful change; we need immediate relief and funding.” - Reporting by Hannah Daley at hdaley@thewirereport.ca

CRTC must protect existing recipients of local news fund money before adding more, commenters say

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| September 9, 2024

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CRTC must protect existing recipients of local news fund money before adding more, commenters say

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