Rogers gets shorter term, lower Cancon requirements in CRTC group licensing renewals

Rogers Media Inc. will get a shorter licence term and lower spending requirements for Canadian content than the other major broadcasting groups, the CRTC announced Wednesday in its decision on the licence renewals for large, English-language broadcast groups. Bell Media Inc., which owns several specialty channels and the CTV network of stations, was quick to criticize the decision Wednesday. "Bell Media is deeply disappointed by today's decision. This proceeding's initial intent was to implement a licensing policy that symmetrically applied to the three large English-language broadcast groups,” Kevin Crull, president of Bell Media, told The Wire Report in an email statement Wednesday evening. Rogers’ new licence is good until 2014, whereas the other large broadcasting groups involved in the proceeding—Bell Media, Corus Entertainment Inc. and Shaw Media Inc.—got five-year terms good until 2016. Rogers will have to spend at least 23 per cent of its gross annual revenues on Canadian programming for its conventional television stations. The other groups must spend 30 per cent of revenue on Canadian programming overall, the CRTC said. Bell and Shaw will also be required to commit five per cent of those expenditures to programs of national interest, which include dramas, comedies, long-form documentaries and some awards shows, while Corus is required to allocate nine per cent. Rogers must direct 2.5 per cent of its Canadian expenditures to national interest programs and 2.5 per cent to new local programming over the first two years of its licence. Those numbers will increase to three per cent and two per cent, respectively, in the third year. Crull said that, during the process, the CRTC effectively turned “a licensing proceeding into an impromptu policy proceeding” and that Canadian programming expenditures should be consistent across the board. “We are deeply troubled by the lack of symmetry resulting from this decision, which advantages certain competitors over others,” Crull said. “Our industry is undergoing such dramatic change. To ignore trends that are reshaping it, while essentially applying a status quo approach to some broadcast groups, while conferring a regulatory advantage on another, is not an appropriate way to regulate." Based on revenues from the past three years, the commission estimated that the policy will generate approximately $106 million for Canadian programming from Rogers in its first licence year and $774 million combined from the three other broadcasters in their first year. The commission noted that Rogers’ media assets include fewer specialty channels than the other groups, and said the company’s conventional stations would have to meet a “burdensome” level of Canadian programming to reach the overall 30 per cent target required of the other major broadcasters. “Having examined all of the evidence submitted by the groups and interveners, the Commission concludes that a CPE level of 30% would be unduly burdensome on the Rogers Media group at this time,” the CRTC said in its decision. “Unlike for the groups, the Commission’s analysis of the Rogers Media group’s financial information and asset mix indicates that requiring it to meet a group CPE level of 30% would significantly limit its ability to compete with other services in at least the first years of the new licence term, placing it at a significant competitive disadvantage vis-à-vis the other groups.” But Rogers will not receive the flexibility of group licensing—which will allow the other companies to count one service’s Cancon spending toward another service’s requirement. At the hearings in April, Rogers asked to pull out of the group licensing framework, telling the commission that a 30 per cent overall requirement would cause its Citytv stations to lose money over the licence term. CRTC chair Konrad von Finckenstein said during the hearings that he “would be lying if I said I wasn’t deeply disappointed” with Rogers’ request. Keith Pelley, president of Rogers Media, wrote in an email statement to The Wire Report that his company is pleased with the decision. “The CRTC has recognized our unique situation and that our significant contributions appropriately reflect our asset mix,” Pelley wrote. Jay Thomson, vice-president of broadcasting policy and regulatory affairs at the Canadian Media Production Association (CMPA), said in an interview he is disappointed that Rogers received different treatment and lower Canadian programming requirements—especially those relating to programs of national interest. Thomson said the CMPA supported the CRTC policy and participated in the hearings in to resist broadcasters’ efforts to water it down. “For the most part we were successful and therefore we’re happy about that,” he said. “That being said, we are disappointed that Rogers has been treated differently.” The commission said the 30 per cent Cancon expenditure requirement is consistent with historical spending, provides stable funding for Canadian programming and limits spending on foreign programs. The policy offers flexibility for the broadcasting groups to play one service’s expenditures off another. “Specifically, qualifying specialty and pay television services will have the flexibility to attribute 100% of their required CPE to any other qualifying specialty or pay television service or qualifying conventional television station, within the same designated group. Conventional television stations will have the flexibility to share 100% of their expenditure requirements among themselves and to attribute a maximum of 25% of their required CPE to qualifying specialty or pay television services within the same designated group,” the commission decision said. For required spending on programs of national interest, the CRTC said it looked at each group’s historical levels and rounded down. At least 75 per cent of the national interest programming expenditures must be allocated to independently produced programs, the CRTC said. The commission noted that Rogers doesn’t broadcast much content that falls into the national interest category and to make up for the shortfall required expenditures on local programming, which must be spent on Citytv conventional stations outside Toronto. “The Commission considers that new local programming would provide a significant benefit to viewers in the Edmonton, Calgary and Vancouver markets. As proposed by the Rogers Media group, the Commission will also require that 80% of this new programming be produced in markets outside of Toronto,” the CRTC said. The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) said it was “encouraged” by the decision, but noted it fell short of the 10 per cent spending on programs of national interest that the union had sought. ACTRA said it was disappointed to see the CRTC turn down its request that conventional broadcasters air at least two hours of programs of national interest in prime time each week. “It's not enough to just fund Canadian programming,” Ferne Downey, ACTRA’s national president, said in a release Wednesday. “You also have to put it where the most eyeballs are, and that's on the conventional television networks. We agree that broadcasters need flexibility, but ghettoizing Canadian drama on specialty stations would not be the answer.” The Writers Guild of Canada issued a release Wednesday saying it is also concerned that the policy will lead to less Canadian drama on television. “t’s better to have this expenditure floor than no minimum at all. The 30% CPE is at the level we requested. But the PNI is well below our recommendation," Maureen Parker, executive director of the guild, said in a release. "We won’t really know what this figure means until we see how broadcasters spend, but we’re concerned about the potential impact on production in Canada. We will monitor carefully how these numbers play out on our screens, and work with the CRTC to ensure there is a real choice of quality Canadian drama.” Jean Brazeau, Shaw’s senior vice-president for regulatory affairs, said in a statement Wednesday that Shaw is pleased with the outcome and welcomes the flexibility it provides. mburgess@thewirereport.ca

Rogers gets shorter term, lower Cancon requirements in CRTC group licensing renewals

Broadcast | July 27, 2011

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