Allarco’s Super Channel asked to justify its license renewal before the CRTC

GATINEAU — Either Allarco Entertainment 2008 Inc. is an essential part of the independent Canadian broadcasting landscape, critical to Canadian content producers, or it chronically falters on its Canadian programming expenditures, while short changing Canadian content producers through its financial difficulties, amounting to a consistent violation of the conditions of its broadcasting license. Whether or not Allarco’s and its Super Channel licensee have its license renewed and what kind of conditions will be placed on it will depend on which argument the CRTC is more swayed by, after both were put forward in a day-long public hearing before three of the regulator’s commissioners on Tuesday. In interventions from several organizations representing content producers, they asked the CRTC to place new conditions of license on Allarco, including a shorter license term, yearly Canadian content production reports, and in some cases repayment of arrears to Canadian content producers who were left unpaid by the company when it went into creditor protection in two separate incidents in 2009 and 2016. The CRTC itself also floated the idea of requiring Allarco to spend significantly more money on regional outreach to meet the conditions of its original 2006 license and 2013 renewal, something that Allarco said it financially would not and could not do. The company is struggling under the burden of the pressure of a changing broadcast market that is moving towards over-the-top (OTT) streaming services. In 2014, Allarco unsuccessfully asked the CRTC if it could change the Canadian content conditions of its license. In September, the company filed a lawsuit against four Canadian retailers — Best Buy Canada Ltd., Staples Canada ULC, Canada Computers Inc., and London Drugs Ltd. — for selling what the company says are media boxes that feature pirated content. In its submission, the Canadian Media Producers Association told commissioners that “Super Channel should play an important role in the Canadian broadcasting system as the only independent premium discretionary service,” but also that the company had failed to pay content producers while it was under creditor protection. As such, the CMPA asked the CRTC for certain assurances in the license renewal: the maintenance of the 30 per cent Canadian programming expenditure condition, the $500,000 per year spent on regional outreach programs, and another $500,000 spent on script and concept development, and to “no longer log filler programming as Canadian unless it meets Canadian certification requirements.” The CMPA and several intervenors also asked the CRTC to explicitly prohibit Allarco from listing staff costs like those for a chief financial officer and IT staff as falling under Canadian programming expenditure obligations. Matthieu Pierre Dagonas, the executive director of the Documentary Organization of Canada — the founding body of the Hot Docs film festival — took a hard line in asking the commission to require Allarco to repay producers that had been left hanging. “I cannot stress this enough,” Dagonas told the commission, “when Allarco went bankrupt, they threatened the documentary industry across the company.” “We understand that the Commission has been generally unwilling to regulate the business relationships between producers and broadcasters,” Dagonas said, but added that his organization “considers it entirely appropriate for the Commission to impose a condition of license that ensures producers are treated fairly.” There were also several interventions in support of Allarco, attesting to the relatively easy process for getting greenlit at Super Channel, as opposed to bigger players like Netflix, Inc. and BCE Inc. Kyle Bornais, executive producer and co-founder of FarPoint Films of Winnipeg told commissioners by video link that his film company wouldn’t exist without Super Channel. “Super Channel has continually helped foster growth in our industry by working with emerging talent and helping walk them through how to create a successful program,” he said. Another filmmaker, Adam Scorgie of Edmonton-based Score G Production Films, said in his intervention that he and his “entire production team would not have a 15-year career in the film industry without the tremendous support of Super Channel over the years.” “Losing a quality network like Super Channel would be a travesty to all Canadians and only continue to strengthen US companies from further taking over the Canadian film industry.” The company’s executives also touted a partnership with Amazon Inc.’s Prime, as positive signs of growth for Allarco. They also pointed to the partnership — announced in 2017 — with UK-based Ginx TV Ltd. to launch a 24-hour e-sports gaming channel in Canada, with original content produced in Mississauga. As for the Commissioners themselves, they presented Allarco with a list of expenditures the broadcaster claimed towards meeting the regional outreach programs, and asked the company to explain that the expenses were not double counted toward two separate conditions of license. Allarco president and CEO Don McDonald told commissioners during the company’s presentation that the expenses identified consisted of the sponsorship of a number of film festivals across the country, and that such sponsorships had long counted toward the regional outreach expenditure condition of Allarco’s license. In the CRTC’s exhibit of the expenditures, it warned Allarco that if the regulator determined that the company’s expenditures toward the regional outreach and script and content development conditions of its licence — dating from its last license renewal in 2013-2014 up until the broadcast year of 2017-2018 — were deemed ineligible, the company could face a shortfall of up to $11 million. McDonald replied that he felt the company had met its obligations, and that such a shortfall would place the company’s future in question. The company has until November 14 to justify the expenditures to the commission. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Allarco’s Super Channel asked to justify its license renewal before the CRTC

Broadcast | November 6, 2019

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Allarco’s Super Channel asked to justify its license renewal before the CRTC

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