SPECIAL REPORT

ASSESSING THE SPOILS

JOHN DALY December 17 1990
SPECIAL REPORT

ASSESSING THE SPOILS

JOHN DALY December 17 1990

ASSESSING THE SPOILS

THE PRIVATE STATIONS STAND TO GAIN

Owners of private television stations serving 10 cities across Canada found themselves racing against one less rival last week to provide news coverage of local fires and snowstorms. To conform with CBC president Gérard Veilleux’s plan to slash $108 million from the corporation’s budget, local CBC stations in communities from Comer Brook, Nfld. to Calgary cancelled what, for most, are their last remaining locally produced shows—their supper-hour and late-night local newscasts. Private broadcast executives maintained, however, that Veilleux’s cuts likely will produce no huge ratings or profit windfalls.

And many of the private broadcasters repeated their long-standing complaints about government-subsidized competition. Said Adrien Pouliot, president of Montreal-based CFCF Inc., which owns the nine-station Quebec network Quatre Saisons:

“Why is the government still paying the CBC $1 billion in subsidies, if it is doing the same thing as the private networks?”

Crunch: Pouliot's company is among those that stand to gain some relief from the CBC shutdowns. Veilleux halted local production at three CBC stations—CJBRT in Rimouski,

CBST in Sept-Iles and CBGAT in Matane—that compete directly with Pouliot’s private network. Still, he and other executives predict little immediate improvement in earnings as advertisers continue to cut back on spending during the current recession. Adds Derrick Leach, a media analyst with the Toronto-based investment dealer Deacon BZW: “We may also have a crunch with one of the private networks. Anything that takes the weight off is very helpful at the moment.” The private broadcasters are being squeezed just as hard as the CBC by the current downturn. The network’s only national com-

petitor, the privately owned CTV network, last week declined to disclose its earnings for its fiscal year that ended on Aug. 31. But CTV chief financial officer Tom Peddie acknowledges that the results were worse than the $7.4million profit it posted in 1988-1989—a result that was itself down sharply from a $23.8-

million profit the year before. In Quebec, CFCF Inc. lost $15.9 million in 1989-1990, compared with a $3.2-million profit in 1988-1989. Toronto-based Baton Broadcasting Inc., which owns 41 television stations in Saskatchewan and Ontario, including CFTO-TV in Toronto, one of the country’s largest, suffered an 85-per-cent decline in profits to $3.1 million. Says Baton president Douglas Bassett: “These are hard times for everyone.”

Even though the CBC is eliminating local

production at 11 stations in the 10 communities—closing both its Frenchand Englishlanguage outlets in Toronto—rival owners say that it will be difficult to gain at the network’s expense because the stations will continue to transmit the CBC’s national programming. Says Baton executive vice-president Joseph Garwood: “The competition is not being lessened. All it means is that for a couple of hours in their daily schedule, they don’t have a local aspect to it.”

Still, many of the CBC’s competitors are planning to augment their local news coverage in order to win new viewers and advertisers from the network. In Windsor, Ont., the CBC last week shut down production at CBET, leaving the city of 250,000 without any local newscast. But Alan Brooks, director of programming for CKCO in Kitchener, Ont., a CTV affiliate 285 km to the east, says that CKCO is considering opening a sister station in Windsor to fill the vacuum. In Calgary, Shaun Purdue, president of CTV-affiliate CFCN, says that he could raise advertising rates by 30 per cent if he could win just half of the 68,000 viewers who formerly watched the local CBC’s supper-hour newscast.

Bid: Private broadcast executives also dismiss protests by cultural groups that Veilleux’s cuts will deprive the 10 cities of crucial local news coverage. In Toronto, Stephen Hurlbut, news director at independently owned CITY TV, says that Veilleux’s decision to shut down local production at CBLT makes sense. Says Hurlbut: “In terms of local news, a fire engine is a fire engine. In Toronto, I don’t think the national dream is better served by having six or seven reporters chase the same fire engine.” Indeed, many private broadcasters say that they hope the CBC’s financial diffi§ culties will force it to make g further cuts. Pouliot, for one, I says that when CBC TV began broadcasting in 1952, it was I the only source of programI ming for most Canadians. But “ now, he argues, the CBC uses much of its budget to bid up the cost of game shows, sports and U.S. programming that could be telecast by private networks. Asks Pouliot: “Why are they paying $140 million for Hockey Night in Canadá” For his part, Bassett adds that, despite protests over last week’s cuts, “the people of Canada just are not prepared to pay for more CBC programming with higher taxes.” Clearly, the CBC’s management now also shares that view.

JOHN DALY

PAUL KAJHLA