Good news for Bell Fund

The lean years after a fateful CRTC decision in 2003 seem to be coming to an end for the Bell Broadcast and New Media Fund with another decision from the commission this week. In the course of renewing Bell ExpressVu LP’s licence to operate a direct-to-home (DTH) pay-per-view (PPV) service until August 2012, the commission also approved the satellite broadcaster’s request to direct the entire 5% of its revenue it must currently contribute to independent production funding to the Bell Fund (Broadcasting Decision 2006-22). "We’re just sitting here kind of with our jaws dropped," says Andra Sheffer, executive director at the Bell Fund’s Toronto office. ExpressVu is the sole source of funding for the Bell Fund, contributing a share of revenue from both its DTH PPV operations and from its general DTH broadcast distribution unit (BDU). "The bulk of our funding comes from the BDU revenue, which is all their subscriptions, so that’s where we get our $6 million a year," she says. While the PPV revenue represents a much smaller share of the fund’s working capital, the good it does is not inconsequential: Sheffer says the new increase "means another four projects a year, probably, and that’s great news." With total assets of nearly $6.7 million in the Bell Fund’s operating fund in 2003, the impact of virtually any increase in contributions would be immediately felt. While Sheffer hadn’t crunched the numbers when she talked to Canadian NEW MEDIA the day after the announcement, ExpressVu’s director of regulatory and government affairs said the windfall for the fund could be in the seven digits. "A million dollars would be in the right ballpark, an additional million dollars in the fund," says Paul Armstrong. The most recent publicly available financials for ExpressVu’s PPV operations are those for the 2003 fiscal year, in which the satellite broadcaster booked $31.9 million worth of gross pay-per-view revenue. All direct-to-home broadcasters in Canada must contribute 5% of their annual revenue after adjustments for the cost of fees paid back to programming providers. Previously, those contributions from ExpressVu’s DTH and PPV undertakings had been directed to the Canadian Television Fund (four-fifths of that 5%) and the Bell Fund (one-fifth). In 2003, however, the CRTC ruled that the 1% of ExpressVu’s general DTH revenues normally destined for the Bell Fund be reduced by 40% – from 1% of DTH BDU revenue to 0.6% – in order to make a contribution to a new fund supporting small-market Canadian productions (CNM, July 24/03). "That’s the broader BDU, which has a hell of a lot more money than the pay-per-view undertaking," notes Armstrong. The reduction meant a big hit for the Bell Fund: in 2003, Sheffer estimated the cut would take ExpressVu’s overall annual contribution to the Bell Fund from $8 million that year to $4.5 million. In its recent January 31 decision the commission, noting that other DTH operators were free to direct their mandatory 5% production funding contributions to entities of their choosing, granted ExpressVu the latitude to do the same. When the satellite broadcaster originally filed its application to renew its PPV licence in December 2004, it asked the CRTC for permission to direct all of its 5% contribution to the Bell Fund. Faced with the prospect of losing its majority share of ExpressVu’s programming fund contributions, the Canadian Television Fund opposed the request, claiming the change would "result in a significant loss," according to the CRTC. The Canadian Film and Television Production Association (CFTPA), which represents both television and new media producers, told the commission that although it generally opposes any reduction in funding for the CTF, it supported ExpressVu’s move to direct all its contributions to the Bell Fund. ExpressVu had also been asking the commission to approve another change to its independent production funding program: using only 50% of its gross revenue to work out Bell Fund contributions, not a full 100%. The satellite broadcaster noted that it pays a portion of its receipts back to programming providers as a condition of its licence, and that its gross revenue should be adjusted accordingly when working out its 5% funding obligations. The commission denied that request, noting that the smaller base figure used for calculating those payments would likely mean a one-third drop in contributions to the Bell Fund and other independent production funds. Although Armstrong was neutral about the CRTC’s refusal to allow ExpressVu to include only 50% of its gross revenue in working out contribution payments to the Bell Fund, he says he’s pleased with the decision to divert the entire amount to the Bell Fund, noting it asked the CRTC for – and won – the same latitude a few years ago with its revenue from its satellite relay distribution undertaking (SRDU) operations, which delivers programming to cable television systems via satellite. "We’re obviously very happy to be able to support the Bell Fund," he says. "After all, it is the Bell Fund – we created it."

Good news for Bell Fund

Broadcast | February 3, 2006

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