CTV’s bitter family feud

RAE CORELLI March 23 1987

CTV’s bitter family feud

RAE CORELLI March 23 1987

CTV’s bitter family feud


The axe finally fell at week’s end— and it fell heavily. After weeks of speculation, the CTV Television Network bowed to the cost-cutting demands of its owner-affiliates and fired 20 people from its news and current affairs division. Among the highprofile casualties: veterans Harvey

Kirck and Helen Hutchinson of CTV’s documentary program W5 — their contracts will not be renewed in September—world-travelled Ottawa correspondent Bob Evans and Montreal correspondent Doreen Kays. On Friday night Tim Kotcheff, the network’s weary and dispirited news director, left on a planned European vacation, his division in tatters. Other departments may be targets. Said one CTV insider: “Believe me, this is only the beginning.”

Indeed, the future of the network itself may be at stake. The Canadian Radio-television and Telecommunications Commission has yet to decide on CTV’s application last November for

a renewal of its licence. Network sources said last week that the cutbacks would jeopardize CTV’s ability to fulfil the commitments it made in the application.

Last week’s dismissals were in large part a result of a prolonged and bitter battle between CTV and its affiliates over declining commercial revenues. In fact, CTV is hurting because, with a few exceptions, advertising revenues in the television industry are down sharply across North America. The chief reasons: the growing number of stations and the popularity of specialty cable channels which have splintered audiences and reduced everyone’s share of the revenue pie. But TV networks have been hit especially hard because advertisers have become more interested in specific markets than in national exposure.

CTV’s recent history illustrates the problem. In the 1984-1985 broadcasting year (September through August) it

had net revenues of $138.2 million. But by 1985-1986, revenue had slipped to $135.4 million, and last fall’s projection for the 1987 fiscal year was fixed at $132.7 million.

Soon, even that sobering target dissolved like a 30-second commercial. At a December meeting in Toronto, the network gave its 14-member board of directors—all of them except network president Murray Chercover representing the affiliate stations—the grim news: on the basis of sales for the first quarter of the broadcast year, it appeared that revenue for 1986-1987 would be $122.1 million—a shortfall of more than $10 million.

It was not the kind of news the stations wanted to hear. With the exception of Toronto’s bland but hugely successful CFTO and BCTV in Vancouver, all were either experiencing or facing lower revenues in their own operations. In fact operating profits for Ottawa’s CJOH have dropped by 57 per cent in just two years. Said one broadcasting executive: “It has become a beggar-your-neighbor situation. Now, if you’re growing, somebody else is shrinking.” That view could be prophetic for the Ottawa region. The Canadian Radio-television and Telecommunications Commission recently granted the thriving Toronto-based Baton Broadcasting Inc., whose stations are CTV affiliates, a licence to open another in the nation’s capital. CJOH owner Allan Slaight called that decision “naïve and pernicious.”

Since the network first went on the air in 1961, there have been repeated feuds between CTV—the initials do not stand for anything—and its often irascible owners. The most recent and most serious revolves around money. In 1976 CTV agreed to pay the stations 75 per cent of the money it made from selling airtime the affiliates set aside for network shows. The network would keep the remaining 25 per cent as operating money for the following year.

But CTV’s production, program purchase, distribution and overhead costs soon made that deal unworkable. Instead of 75 per cent, the stations now get what is left after the network pays its bills. In 1985-1986, CTV’s net operating revenue was $135.4 million, but its

expenses were $107 million. That left less than $27 million for the 16 affiliates to divide—a far cry from the golden visions of 25 years ago. Said one industry expert: “The net proceeds to the affiliates will be cut in half in the current year. And next year they will be cut in half again.”

Early this month the CTV board’s executive committee finally acted on the $10-million shortfall: it told the network to make up the deficit by “whatever moves are most appropriate.” Because the network had already spent the money for most of this year’s entertainment program-

ming, the axe fell on news and current affairs and likely will land next on the support staff at its rented nine-storey headquarters building in midtown Toronto.

Meanwhile, the two sides continue to blame each other. Said an executive of a CTV affiliate: “The God

damned place is in trouble because the network has been spending too much money. They should have seen some of these storm clouds coming.” Retorted a CTV network insider: “The stations are so cheap they wouldn’t spend two bits for a box seat at the Second Coming.”

Yet the stations dictate the network’s fortunes, and at week’s end, after days of acrimonious meetings and boardroom shouting matches, they were at a low ebb. In CTV’s windowless newsroom (in CFTO’s broadcast centre in suburban Toronto), reporters and producers pondered the layoffs, which included foreign editor Barry Barnett. Said one: “They’ve thrown red meat at the wolves, but nobody here thinks it will have been enough. People are

scared.” Indeed, the company has also scrapped plans to appoint a reporter to its vacant Quebec City bureau; a vacancy in Winnipeg will not be filled in the near future; and Martin Himel’s job as Jerusalem bureau chief may also be threatened.

Bickering between the affiliates and the network has been chronic. The stations complain that CTV charges too little for commercial time. As a result, they claim, advertisers can sometimes buy time more cheaply on the national network than in local markets. Wealthier affiliates say that their production facilities

often stand idle while CTV hires independent houses to produce Canadiancontent programs for the network.

Another irritant has been the illconcealed and long-standing animosity between CTV and Baton, which has a 25-per-cent interest in the network and owns Toronto’s CFTO and CTV affiliate stations in Regina and Saskatoon. For years there has been speculation that John Bassett, who won the CFTO licence in 1960 and retired as Baton’s board chairman on Dec. 18, 1985, wanted to break away from CTV and go it alone—perhaps setting up his own network. But Bassett reportedly told the board earlier this month that he will quit altogether in September, abandoning the field to the Eaton department store family, which already controls the company. Asked about the report, Bassett said, “I have nothing to say at all, okay?”

Other industry experts were less reticent. Said one analyst: “There is going to be a massive power struggle between the Baton group and the rest of CTV, either with the network as the

prize or with the Eatons making an effort to break away, which would be very destructive for CTV. The Eatons have decided that their future—their excess cash and everything else—is going into broadcasting. They want to be No. 1 in broadcasting in this country.”

Whatever its internal power struggles, the fate of Canada’s only national private television network is on the line. But to Moses Znaimer, president of Toronto’s slick and energetic independent CITY TV, that crisis is as much one of style as of structure. Said Znaimer: “The bloom is off the net-

work rose in general.” He added: “People have got to start thinking about television in something like the categories they are used to thinking about in radio: stylistic choices that run all the way from all-news radio to middle-of-the-road, to dance music, rock ’n’ roll, heavy rock and soft rock. In television, though, you have an apparent multiplicity of channels and in large measure they are all middle-ofthe-road. These people all wear the same suits.”

Asked about rumors in the broadcasting industry that he has ambitions to take over CTV, Znaimer replied: “Are you kidding? My God, madness and paranoia stalk the land. Structurally, there is room for networks like CTV, but they simply cannot continue to operate the way they operated yesterday.” But given the tensions, personality clashes and depleted bankroll at Canada’s beleaguered private network, tomorrow—not yesterday—is the major concern.

RAE CORELLI in Toronto