CAB says up to 50 radio stations may close
By Denis Carmel
TO NO ONE’S SURPRISE, Covid-19 has taken a grim toll on Canadian broadcasters. In that context, the Canadian Association of Broadcasters, acting on behalf of its members, sent an emergency application to the CRTC on July 13th seeking temporary relief from several regulatory obligations.
The Commission has not yet responded, despite the letter’s expressed desire to see action taken prior to the first week of August. The letter was sent to Cartt.ca on Friday (August 21) morning. The CAB’s membership includes all big broadcasters and a large number of smaller chains and independents.
Covid-19 impact is devastating
While TV viewing is up and radio listenership remains at 85% of pre-Covid levels despite a dramatic decrease in commute-time consumption, says the CAB, revenue is down significantly across the board while costs have risen.
“March saw overall advertising revenue declines of 14.6% in private TV and 17.5% in radio, as advertising began plummeting mid-month; Private TV saw 46.4% advertising declines in April and 50.4% declines in May; Private radio saw declines of 65.5% in April, 67.3% in May and 56.9% in June; and pacing for the remainder of the summer projects revenue declines of 40–50% through August 2020, and significant ongoing declines through the Fall and 2021,” reads the CAB application, signed by board chair and Bell Media senior counsel, regulatory affairs, Lenore Gibson.
“Indeed, almost four months into this crisis, it is clear that without express relief, virtually all private broadcasters will fall short of certain requirements codified in their conditions of licence and the regulations,” the application continues.
TV stations need relief from their 2020 and 2021 Canadian program expenditure (CPE) as well as programs of national interest (PNI) obligations because the impact of Covid-19 will leave them unable to meet them – nor will the broadcasters be able to make up such shortfalls in the future. It’s not something that can be put off, only to be picked up later on.
Broadcasters are in “survival mode” right now, diverting all funds to keeping the lights on and to delivering vital news to viewers and listeners, says the letter.
Without immediate action, says the CAB, the CRTC will be inundated with individual requests for relief, not to mention a raft of job losses and station closures. If changes to radio regulations alone aren’t allowed, up to 50 stations may well close, adds the application.
Remedy
The CAB proposes a “deemed compliance” policy where, “absent evidence of bad faith, licensees would be deemed compliant with their expenditure-based conditions of licence and applicable regulations for the 2019–2020 broadcast year.”
This simply means licensees would be considered in compliance with their conditions of licence and applicable regulations for the 2019–2020 broadcast year regardless of actual expenditure levels; and the Commission would not require any shortfalls or under-expenditures resulting from this broadcast year (2019–2020) to be carried forward or made up in any way.”
“Second, necessary flexibility would also be formally confirmed for exhibition and other regulatory requirements,” adds the letter.
The CAB acknowledges these changes, and the fact so many resources have been redirected to news, will impact independent producers. However, the association argues the producers have been successful in securing material government support in ways the broadcast industry has not. (Ed note: That hasn’t kept some other broadcasters from proposing good ideas.)
“The Commission should dismiss any calls from certain sectors that Covid-19 related ‘shortfalls’ in production must be made up. There is no ‘making up’ for Covid-19 related losses. Broadcasters are not going to be able to make up for lost revenues. Nor are other Canadian businesses. Everyone must operate (or not) based on a new set of economic realities,” the CAB argues.
“CAB members report that advertising bookings for the first quarter of the 2020-2021 broadcast year are already pacing substantially off Q1 of 2019-2020. This outlook will prove even more bleak if broadcasters are expected to make up expenditure shortfalls from the 2019-2020 broadcast year on top of their required expenditures in 2020-2021.” The CRTC broadcast year begins September 1st, so Q1 runs through November, normally a very high revenue quarter.
Finally, the association is proposing to accelerate the treatment of local management agreements, where radio stations in a local market work together when it comes to local sales and operations. “We urge the Commission to suspend the radio LMA pre-approval requirement effective July 31, 2020, for a minimum of eighteen months,” says the application. Such approvals tend to take many months and some CAB members want to put together such deals now in order to gain efficiencies. That, however, will still mean layoffs.
“The Commission’s historic concern over the negative impact of LMAs ‘on the diversity, dynamics or competitive forces in any given market’ has been rendered moot by the Covid-19 crisis,” explains the CAB letter. “Local private broadcasters are in survival mode. Indeed, the Competition Bureau recognized this reality in a statement issued on April 8, 2020: The Bureau ‘recognizes that the exceptional circumstances surrounding the Covid-19 pandemic may call for the rapid establishment of business collaborations of limited duration and scope to ensure the supply of products and services that are critical to Canadians’.”
The letter also asks for a break on radio stations’ Canadian content development (CCD) requirements, which normally go to concerts and other events – all of which have been effectively cancelled since March.
The CAB proposed a “fast-track” treatment of this application where instead of a 30-day period for intervention and 10 days to reply, which are the normal timelines for Part 1 applications, it asked for a consultative process of five days intervention time and two days reply.
This application was filed more than 50 days ago.
A CRTC spokesperson said to Cartt.ca in an email: “We are currently reviewing the application and determining the next steps, which will be announced in due course.”
