Shakeup at CTV
A new president makes his mark on a network
On becoming head of Toronto-based CTV last March, corporate whiz kid John Cassaday, 37, proclaimed his intention to make the troubled network “world-class.” But, within weeks, the new president and chief executive officer drew expressions of dismay from some CTV insiders and industry analysts with his first concrete proposals. Addressing the Association of Canadian Advertisers on April 17, the former Campbell Soup Co. Ltd. senior executive cited comedian Martin Short and author Margaret Atwood as ideal candidates to fill in occasionally for Norm Perry and Deborah McGregor, the coanchors of CTV’s morning news show, Canada AM. In an interview with Maclean ’s, Cassaday insisted that the proposal was only halfserious. “I was trying to jolt people into thinking about what could be,” he said. “People said to me, ‘You must have been kidding about Martin Short, but Margaret Atwood—now that’s not a bad idea.’ But I knew that if I hadn’t said Martin Short, I would never have been able to sell Margaret Atwood.” Added Cassaday: “My point was simple: How do we tap in? How do we become more interesting? How do we start getting viewers back in the habit of watching CTV?”
Cassaday’s questions reflect the hard times at Canada’s only private, fully national network. Last month, CTV revealed that its ratings in the 1989-1990 season had dropped 14 per cent from a year earlier. And in the 12 months that ended last Aug. 31, profits were about $7.4 million—roughly one-quarter of the $28.3 million that the network earned in 19871988. That meant that CTV, which distributed an estimated $22 million to the affiliates in 1987-1988, handed out just $2 million in the following year.
At the same time, CTV is facing challenges from pay TV and cable-delivered rivals for viewers’ attention. And in the lucrative Toronto-area market last fall, the aggressive Global Television outlet drew better prime-time ratings than CTV’s Toronto affiliate, CFTO, for the first time ever.
But Cassaday is also presiding over a network that is threatening to tear itself apart. CTV’s two largest affiliate owners, CFTO owner Baton Broadcasting Inc. of Toronto and WIC Western International Communications Ltd. of Vancouver, have both undergone expansions that could test the network’s working arrangement among the nine affiliate owners. Last week, WIC, operator of two affiliates that generate about 16 per cent of CTV revenues, bought Edmonton-based broadcasting giant Allarcom
Ltd. for $157 million. That purchase—which still needs approval from the Canadian Radiotelevision and Telecommunications Commission (CRTC)—prompted several industry observers to question whether WlC’s president, Douglas Holtby, might be preparing to abandon CTV and forge his own mini-network. Holtby made no comment.
Only one week earlier, Baton president Douglas Bassett had sought CRTC permission to purchase nine small television stations in central Ontario. If the transaction is approved, Baton’s contribution to CTV revenues would
exceed 35 per cent, up from the current 32 per cent. And Bassett says bluntly that the acquisitions by his company and WIC will only renew pressures to restructure the decision-making process on the CTV board, which allows one vote for each of the affiliate owners, regardless of how many stations they own or how much revenue they generate. At the top end is Baton, which owns Toronto’s CFTO and Ottawa’s CJOH, as well as CFQC in Saskatoon and CKCK in Regina. The smallest is St. John’s-based Newfoundland Broadcasting Ltd., which owns only one station, NTV, responsible for just under two per cent of the network’s revenues. Said Bassett: “How can we at CTV remain equal partners when some of us are getting so big?”
Cassaday plays down the internal tensions that have plagued the 29-year-old network in recent years. Although he concedes that there is work to be done to reduce conflict in the boardroom, he says that his first mandate is to bring more viewers—and, in the process, more advertisers—to the network. To that end, Cassaday has focused in recent months on developing a fall lineup of what he calls “proven winners,” while at the same time working to convince advertisers that CTV is an effective vehicle. And beginning this week, the network will launch a new promotional campaign, developed by SMW Advertising Ltd. of Toronto, trumpeting its new jingle, “Tuned into you,” sung by Toronto’s Juno Award-winning Liberty Silver.
Although the CTV job is Cassaday’s first in broadcasting, the Hamilton native and University of Toronto MBA is no stranger to the world of corporate merchandising. He became marketing manager for Toronto-based tobaccomaker RJR MacDonald Inc. in the mid-1970s. In 1977, he joined General Foods Inc. of Toronto and moved quickly up the corporate ladder. By 1984, he had become an international marketing director.
But Cassaday is probably best known within corporate circles for his role in helping to reverse the sagging fortunes of London-based Campbell Foods PLC. As the senior vice-president of marketing and sales for the company’s Canadian operation, Toronto-based Campbell Soup Co. Ltd., in the mid-1980s, Cassaday was instrumental in launching such successful products as Swanson Gourmet Dinners, which the company went on to market internationally.
During his first four years at Campbell’s Canadian branch, profits doubled to $21.9 million— an increase that several industry observers attributed largely to Cassaday’s vision.
A year ago, Cassaday became president and chief executive officer of its British operations. But when the CTV board offered him a chance to
run the network last winter, he says, he jumped at the opportunity. Interviewed in his downtown Toronto office, Cassaday was poised and affable as he explained his move to broadcasting. “I love watching TV,” he said, “and I believed in TV as a powerful vehicle when I was an advertiser.” A number of observers see
Cassaday’s stewardship as a _
positive development. Said former broadcaster Peter Desbarats, dean of the graduate school of journalism at the University of Western Ontario in London, Ont.: “I think it’s good to bring in good sales talent and good management talent to a network that has been wandering around a bit.”
Cassaday acknowledges that he has much to learn about the industry. But at least he has better access to the network’s own profits than did his predecessor,
Murray Chercover, who headed the network for 24 years until his retirement in February. Unlike the large, private American networks, which are centrally owned or controlled, CTV—with several owners—divides its profits according to an unconven-
tional formula. The network provides the affiliates with about 70 hours of programming each week. Of those, half are considered “station sales times,” and the advertising revenue that they generate goes straight to the affiliates. Revenues for the other half—known as “network sales times”—go to CTV itself. But, after
CTV pays its programming, operating and administrative costs, it hands a portion of the balance back to the affiliates, who take it as payment for carrying the network hours.
Until 1986, CTV remained cash-starved, because the affiliates were guaranteed fully 75 per cent of those network revenues. As a
result, while the affiliates routinely enjoyed healthy profits, Chercover often had to plead poverty in the face of CRTC demands for more original Canadian programming by the network. But, in response to the CRTC’s growing impatience, in 1986 the CTV board adopted a more flexible accounting formula that allowed for profit-sharing adjustments each year, depending on CTV’s financial needs. And in 1988, a new affiliation agreement revised the cost-and-revenue-sharing formula between the affiliates themselves, requiring the larger players to pay more of the network’s expenses.
Still, Cassaday faces the possibility that the new moves by the network’s two largest affiliates will heighten tensions in the boardroom. WlC’s purchase of Allarcom’s CITV in Edmonton and CKRD in Red Deer, Alta., when added to its ownership of CFAC TV in Calgary, gives the broadcaster three independent stations, in addition to its two CTV affiliates and one CBC station (CHBC in Kelowna, B.C.). Despite industry speculation that WIC might leave CTV, Toronto investment ana•ç lyst Derrick Leach, for one, expressed í skepticism. Said Leach, who works I with the Toronto firm Deacon Barg clays de Zoete Wedd Ltd.: “I doubt g that they will want to become their £ own network. Besides, with the current glut of broadcasting, there probably is not room for a third network in Canada.”
Bassett, meanwhile, continues to lobby for greater clout for Baton. Last week, just days after CRTC hearings into his company’s purchase of nine Ontario stations, Bassett told Maclean ’s that he believes the network should be controlled by one owner who would provide “strong leadership.” Declared Bassett: “It was fine to say, ‘We will all be equal partners’ when the affiliates got together in 1966. But, in the past 30 years, the broadcasting environment has changed a lot. We are now looking at some pretty big economic units.”
One of Cassaday’s responsibilities is to run board meetings, and he said that it is a challenge to keep conflict at bay. “You don’t expect to dive in and solve the problems,” he added. “You keep moving around until you get closer and closer. You’re never going to fix them, but you fix enough around the edges to come up with a livable solution.” Several board members agreed that the network is running more smoothly under Cassaday. Said Randall Moffat, president of Winnipeg-based Moffat Communications Ltd., which owns CTV affiliate CKY in Winnipeg: “He has made a very positive contribution, and the meetings are running much smoother than they were before.”
Cassaday may have reduced fractiousness within CTV, but he still faces
a growing threat from the network’s chief private-sector rival, Global Television. Last December, Winnipeg-based Israel H. (Izzy) Asper bought out his two partners in Global Communications Ltd., which operates the lucrative Ontario-based Global Television system. Asper’s Winnipeg-based company, CanWest Communications Enterprises Inc., paid $131 million to Paul Morton and Seymour Epstein, winning the remaining 39-per-cent control of Global that it did not yet own. Asper, 57, has stated that he intends to form what he calls a national co-operative broadcasting “system”—starting with Global and the four independent TV stations he controls in Winnipeg, Saskatoon, Regina and Vancouver.
Asper is still awaiting the seal of approval from the CRTC for that transaction. But, at CRTC hearings last June, CTV filed an application objecting that Asper will get a “de facto network” without the traditional obligations. CRTC conditions of licence generally require networks to undertake certain responsibilities— service to remote areas, comprehensive news coverage, a specific amount of original Canadian dramatic productions—from which local independent stations are exempt. Said Cassaday: “If it’s a network, let them play by network rules. Let them make the same commitment to Canadian content, to international news bureaus that we do. Let them get their signal into Split Lip, Man., like we have to.”
Programming has been a major preoccupation for Cassaday since he arrived at CTV. Shortly after joining the network, he made some dramatic—and controversial—changes in CTV’s news and current affairs division. Last April, he moved the venerable, Sunday-evening current affairs program, W5, from the 8 p.m. slot that it had held for four years to 7 p.m.—the same spot as the popular U.S. news program 60 Minutes. That change allowed CTV to air the hit U.S. series America’s Funniest Home Videos at 8. At the time, some insiders grumbled that Cassaday was cynically trying to increase the network’s audience in time for the spring ratings tally—and that W5 would lose out to 60 Minutes. But Cassaday points out that JF^s ratings have since increased by 23 per cent. Said Cassaday with evident pride: “That’s the kind of progress I want to make here. We’re getting the juices flowing again.”
More recently, Cassaday and his staff have been assembling CTV’s fall lineup. The network bought seven hours of new U.S. prime-time programming last season and made 47 changes to its evening schedule. The result, said Cassaday, was “a fallout from too much new product.” For the new season beginning in September, CTV is concentrating on proven winners. The network has renewed such successful American imports as Roseanne and China Beach, while securing other established U.S. hits, including the soap opera Knot’s Landing.
The CTV president stressed that he also wants to build even bigger audiences for the network’s popular Canadian offerings, including Bordertoum, an action-adventure show set
on the U.S.-Canadian border, and E.N.G, a dramatic series focusing on the news department of a TV station. His strategy: to schedule them between bigger-drawing U.S. shows. The made-in-Canada lineup also features a new, one-hour dramatic series, Neon Rider. CTV collaborated with Toronto’s Atlantis Films in creating the show, aimed at teenagers and set on a ranch for troubled adolescents.
Cassaday, who with his wife, Mary, has three children ranging in age from 2 to 9, also said that he has long been concerned about programming for young people. And this fall, he is introducing what he calls a “motherdirected” Saturday-morning lineup, including the sort of shows that concerned mothers would choose for their kids. The network will
replace its traditional fare of U.S. cartoons with strictly Canadian productions, including OWL TV, the environment-nature series based on the successful children’s magazine, the pioneer drama series The Campbells and a new science show called Wonder Why.
In an effort to revitalize the network’s news and sports divisions, CTV has also lured several prominent journalists. In June, Ralph Mellanby, former executive producer of CBC’s Hockey Night in Canada, signed a five-year deal with the network. Mellanby, whose projects will include CTV’s coverage of the 1992 Summer Olympics in Barcelona, cited the opportunity to work with Cassaday as a primary reason for his decision to join the network.
The new president is also recruiting highprofile on-camera personalities to join such established CTV stars as newscasters Lloyd Robertson and Pamela Wallin. Beginning this fall, veteran CBC broadcaster Eric Mailing, who for 14 years co-hosted the current affairs show the fifth estate, will co-host CTV’s W5. Changes are also coming to Canada AM. This September, Perry ends a 15-year stint as anchorman, and Cassaday has been narrowing the list of
potential replacements. Among the rumored candidates: Dan Matheson, who for three years has been Canada AM’s sportscaster, and J. D. Roberts, a former anchorman at Toronto’s CITY TV, who since last year has worked at WCEX in Miami.
With those changes in place, Cassaday is determined to lure more advertisers to the network. In order to pursue them more aggressively, in May he created the position of senior vice-president of marketing, filling it with Campbell’s former manager of the soup division, Paul Robertson. And last month, Cassaday installed a special telephone in his Toronto office and encouraged advertisers to call him directly. Archibald McLean, advertising manager of Florenceville, N.B.-based McCain Food Ltd., was one of the first. Said McLean: “I think
his ideas are a good step forward in his industry.”
Another challenge facing Cassaday is the renewal next year of CTV’s licence with the CRTC. In 1987, then-CRTC chairman André Bureau ordered the network to spend at least $403 million on Canadian programming by 1991—a 75-per-cent increase over the fiveyear period that ended in 1986. But the new president says that he is confident about fulfilling CRTC requirements. Indeed, he has sent a videotape to the current CRTC chairman, Keith Spicer, in which he personally explains CTV’s choice of programs for the coming season.
That communication to the federal broadcasting regulator reflects Cassaday’s confidence about improving CTV’s fortunes. “My biggest challenge right now,” he said, “is to harness the conflicts from within, and the challenges from without, into a competitive advantage for the network.” The corporate Wunderkind who set a fire under Campbell’s Soup has a bright new picture in mind for CTV.