No emergency loan for CBC: Tories
Andrew Mayeda, Canwest News Service Published: Wednesday, February 25, 2009
OTTAWA -- The Conservative government has no plans to "insulate" the CBC from the sharp decline in advertising revenue that has forced companies across the media industry to lay off workers and cut costs, a spokesman for the prime minister said Wednesday.
The comments suggest the public broadcaster could come up empty in its efforts to lobby the government for a bridge loan to cover a deeper-than-anticipated drop in ad revenue.
"The CBC cannot be insulated from all market realities," said Kory Teneycke, chief spokesman for Prime Minister Stephen Harper. "Nobody likes to see this, but broadcasters have to adapt to lower ad revenues. No one broadcaster is immune from that."
In a memo to employees this week, CBC President Hubert Lacroix said the Crown corporation is expecting a shortfall in ad revenue of between $55-million and $65-million for the year ending March 31, 2009. Ad revenue for the year is projected to fall 17% short of the company's budgeted forecasts, and 7% lower than last year.
"The situation is worse than anyone could have anticipated, and is not expected to improve anytime soon," said Mr. Lacroix.
CBC officials say the company is on track to break even for the current fiscal year. But as senior executives put the finishing touches on next year's CBC budget, the company is "exhausting all possible avenues for financial flexibility to find a way to spread the impact of this crunch over more than one year, including the sale of some of our assets," said Mr. Lacroix.
"The combination of a severe slump in our commercial revenues, coupled with rising costs of production, is a menacing test that will demand some tough choices on our part. Tough choices that will affect, in one way or another, jobs, services and programs in our corporation," he told employees, adding that "nothing has yet to be determined."
On Wednesday, a CBC spokesman said executives are examining a number of options as they prepare to submit a budget to the company's board next month, including requesting a bridge loan to be drawn from future federal funding commitments.
"We are not asking for a handout," said Marco Dube, CBC's director of media relations.
The CBC received a parliamentary appropriation of $1.1-billion in 2007-08. After adjusting for inflation, that compares with the $1.5-billion the broadcaster received in 1990, before the Liberals slashed CBC funding in their quest to balance the budget.
This year, the broadcaster also received $60-million in funding to support Canadian programming, as it did in the previous seven years. However, the prime minister's office on Wednesday appeared to shut the door on funnelling any emergency funds to the company.
"The government just introduced a budget, and we're not looking at making any changes," said Mr. Teneycke.
Private-sector media companies such as Canwest Global, CTV Globemedia and Quebecor Media have struggled as the economic downturn has sapped advertising revenues, forcing them to lay off staff, chop expenses and shut underperforming operations. On Wednesday, CTV announced it will close two A-Channel stations in southwestern Ontario, warning more closures could be on the horizon.
A spokeswoman for the union that represents CBC employees said the government needs to recognize that the CBC provides important public services that private broadcasters do not, such as operating radio stations in remote communities.
"It fulfils a really important role in this country. It would be wonderful to see some recognition that," said Karen Wirsig of the Canadian Media Guild. "The CBC is woefully underfunded when you compare it with public broadcasters in other countries."
But Christopher Waddell, a journalism professor at Carleton University, said the CBC will be hard-pressed to make the argument for more federal money, especially to support its TV operations, which compete with private broadcasters for ad dollars.
"The difficulty you face when you move a public broadcaster to more of a commercial basis, you make it harder to make the argument that you should get special treatment at some point," said Mr. Waddell, a former parliamentary bureau chief for CBC Television News.
Even while in government, the Conservatives have appealed to distaste for the CBC among grassroots supporters to raise funds for the party. But Mr. Waddell said there is likely little support for a CBC bailout, even among the general public.
