Commission is told small TV stations are living on borrowed time
GATINEAU – The local TV environment is so bad for some small independent over the air broadcasters that they risk shutting their doors in the coming months if they don’t get financial assistance from the CRTC. A case in point is Dougall Media’s Thunder Bay Electronics, the owner of two stations in the northwestern Ontario city.
VP and GM Don Caron explained during a closing statement to the Small Market Independent Television Stations Coalition (SMITs) appearance that his two stations (a CTV and Global affiliate) have remained open only because of money from life insurance policies on their deceased founder and past general manager is helping to fund operations and make ends meet. (founder Fraser Dougall died in August at the age of 73). Caron noted that his statement wasn’t meant as a warning, but simple reality and that unless changes are made and the stations get additional funding, they will close.
A decision will be made by September as to whether the stations will continue to operate, he said, adding that without funding changes, Mr. Dougall’s widow not willing to continue to cover the station’s operating losses.
“Our scenario is such that we’re probably the most desperate of the stations sitting here in front of you at this point,” said Caron.
“We’re the only broadcaster that provides television for northwestern Ontario. The reason that we’re still in business and we’re still operating is the fact that unfortunately we had a general manager and an owner who passed away in the last year and the company had fairly significant life policies on them – and the reason we’re still operating is we’re burning those non-broadcast assets to stay in business, awaiting to see if there is some way we can work out and the Commission can hear our plight of angst if you will,” he continued.
“I just want to make you aware that I’m struggling to stay in the business until September and if it goes beyond that, then I really have no choice but to consider shutting the whole place down.” – Don Caron, Dougall Media
“I just want to make you aware that I’m struggling to stay in the business until September and if it goes beyond that, then I really have no choice but to consider shutting the whole place down, which will blacken Northern Ontario.”
“I’m not doing this as a threat, I’m telling you the realities of the financial scenario we face at this point so I just
wanted you to be aware that we are the smallest of the small and when something goes soft like it does, we have no way of subsidizing it except through non-broadcast assets and we’re not prepared, and the owner’s wife who is now the owner, is not prepared to let me keep spending that money forever," Caron (pictured) concluded.
Unfortunately, the Thunder Bay Electronics situation isn’t unique. As Jeff Thiessen of the Miracle Channel in Lethbridge AB noted, SMITS stations would have long ago been in the red if it weren’t for growth in local advertising and some previous funding.
“Without your help, some member stations will start going dark, and soon,” he said.
SMITs has argued that a solution lies in treating small independent stations differently than the others. It suggested that the Commission set aside a portion of the 5% local TV BDU contribution specifically for small independent conventional broadcasters. This is over and above the Small Market Local Programming Fund (SMLPF) and would constitute a new source of funding for small independnt stations.
“Our recommendation is that your preserve and increase, through a direct contribution from cable, the funding of small market independent stations and introdcce whatever funding you feel appropriate for a broader arrange of services that provide local news and reflection,” said Glenda Spenrath from Newcap.
SMITS has asked for an incremental $20 million in funding. Commissioner Candace Molnar wanted to know what viewers would get back in return for the additional money. For some stations such as CHEK, the Victoria B.C. station owned by its employees, this money would make them viable, for others it would be a life line, allowing them just to continue to operate at current levels, while for others it would represent capital to expand services.
“For some of us, success would be not turning the lights out tomorrow.” – Glenda Spenrath, Newcap
“For some of us, success would be not turning the lights out tomorrow. For some of us, success would be maintaining. For some, success would be increasing the amount of programming that they’re currently doing,” said Spenrath.
Cogeco Cable was also looking for additional financial relief during its morning appearance, not in the form of new money, but just the ability to allocate existing resources in a different way. In a nutshell, the independent BDU wants a freer hand in distributing money to community TV across its regions. These financial resources would go towards producing news in markets where there isn’t a local over the air broadcaster. In fact, if the right rules are in place, the company would invest in local news production in 14 communities (seven in each of Ontario and Quebec) where local over the air stations don’t operate. Cogeco has already implemented a community TV local news production in North Bay, Ontario after CTV exited the market several years ago. The company’s plan is to essentially replicate that model in 13 additional communities. Cogeco is the only TV news provider based in North Bay.
A key aspect of the Cogeco proposal was the Commission look at each company as a group and not each cable system. This, noted the company, would provide the right amount of flexibility needed for each BDU to address their unique requirements
Tim Caddigan, senior director of programming for Cogeco in Ontario, noted that there are a number of benefits to the company’s proposed approach including ongoing support for access programming, not taking away anything from public and private broadcasters and maintaining its contribution to the Canada Media Fund.
“It will deliver additional and much needed local television news and information to small size markets within our cable footprint where the traditional OTA broadcast platform and model has demonstrably failed,” he said. “Second, it will keep the money coming from our cable customers and earmarked for local expression at work within the community sector, for the direct benefit of the communities we serve and that are totally deprived of any local television news and information.”
Cogeco’s proposal didn’t appear to sit well with CRTC chair Jean-Pierre Blais. He questioned company executives and advisors for several minutes on how the company accounts for community TV channel expenses and whether there’s an opportunity for BDUs to game the system, potentially moving money out of small markets and into larger ones under this type of model.
Yves Myrand, former executive and now advisor to Cogeco, noted that the company doesn’t have any incentives to game the system and move money from small to large centres. “The flexibility requested is really to allow actually for communities that are much smaller to get more resources without adding to the overall financial contribution that must be expended towards that end,” he said.
The hearing continues tomorrow with Rogers, Unifor and RNC Media, among others, appearing.
Photos screen-capped from CPAC.ca
