OMNI cuts comply with licence terms, Pelley tells MPs

OTTAWA — Amid grilling before the House of Commons heritage committee on Wednesday, Keith Pelley, president of Rogers Communications Inc.’s media division, repeatedly stated that despite recent cuts to news programming, OMNI stations are in compliance with their licence terms. “We, in every aspect of OMNI, are meeting our conditions of licence, and that is very important for you to understand,” Pelley said. In May, Rogers said it would cut about 110 conventional-TV jobs as a result of programming changes at its City and OMNI over-the-air television networks. Those programming changes included the elimination of local newscasts in Punjabi, Cantonese, Mandarin and Italian on OMNI stations. NDP MP Mike Sullivan said Wednesday that Rogers committed to a licence that “expects the licensee — I say the word expects and I know you’re going to yell ‘well, that’s not a condition, it’s an expectation’ — expects the licensee to maintain a local presence.” Sullivan said that local presence “includes providing seven-day-a-week original local news coverage distinct to the market, employing full-time journalists — which you don’t anymore — and operating a news bureau or gathering office in the market. That’s what you committed to do.” In response to a question from Sullivan about why Rogers can’t use revenues from its other TV stations to subsidize OMNI, Pelley said: “OMNI is not a not-for-profit organization. OMNI is a separate entity that is part of a private company.” Rogers can’t use revenue from a profitable channel like Sportsnet to subsidize OMNI because “that’s not the way you run a private business. … You have to look at whether they’re sustainable on their own,” Pelley responded. “If the station was created to serve multiple communities locally, and you can no longer fulfill that mandate, why don’t you surrender the licence?” Sullivan asked. “Because I believe that we are meeting every condition of licence,” Pelley said. Pelley said people should not be surprised at the cuts, and referred to Rogers’ licence-renewal hearing last year, during which he told the CRTC that OMNI stations were facing a "financial crisis." “We were pretty clear in the hearing that if in fact we were not able to get licence changes that we requested— and we requested a plethora of them — that there would be gargantuan changes to OMNI coming,” he said Wednesday. “The industry has changed dramatically. Unfortunately, ethnic programming and the audiences have deteriorated significantly and the ad revenue just cannot match the actual programming cost.” Pelley said OMNI’s source of income was always ad revenue from American programming, like reruns of sitcoms, which funded the ethnic programming. “Since 2011, OMNI’s advertising revenue has dropped from $80 million to, this year, advertising revenue will be about $22 million,” he said. “As a result, we no longer can fund the ethnic programming like we did because the U.S. programming is not generating that type of margin anymore.” Pelley said OMNI has also faced increasing competition, including from BCE Inc.’s CTV Two, piracy and more than 130 foreign ethnic specialty channels. “This, unfortunately, as I’ve said over and over again, is not 1979 anymore.” Colette Watson, Rogers’ vice-president of TV and operations, told The Wire Report after the committee meeting that viewership of OMNI has dropped by 68 per cent in the past three years, though even before that drop it was not high enough to draw the ad revenue necessary. She told the committee during her appearance that research conducted by Rogers found that “OMNI programming was not highly visible, it was seen as tired and outdated, particularly by young viewers who are the key demographic for advertisers.” Additionally, while newcomers to Canada previously immigrated “knowing only the language of their origin, many now come to Canada proficient in either English or French.” The trend toward online consumptions of news has made it harder to draw the necessary audiences to OMNI newscasts, she added. “All of this suggests that a new approach is required,” she said. The CRTC is currently considering a Part 1 complaint by Unifor, a union representing media workers at OMNI, which asked the regulator to hold a public hearing on the cuts next month. Watson said she wasn’t concerned about the possibility of a hearing, “because, as we reiterated over and over again, we are completely compliant on all of our conditions of licence.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

OMNI cuts comply with licence terms, Pelley tells MPs

Broadcast | June 18, 2015

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OMNI cuts comply with licence terms, Pelley tells MPs

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