CRTC, St-Onge highlight Bell’s profitability in response to 4.8K job cut, CTV and radio closures

BCE Inc. announced Thursday that it will be restructuring by eliminating 4,800 positions, divesting more than 40 per cent of its radio stations, cutting CTV newscasts, and shifting away from the “overly regulated” parts of its business due to several factors among which is an “unsupportive government and regulatory decisions.” The layoffs, which represent nine per cent of Bell’s workforce, will be implemented "over the coming weeks," according to an internal memo signed by Bell president and CEO Mirko Bibic. Bell will also divest 45 of its 103 radio stations in regional markets to seven buyers, subject to CRTC approval, while keeping the stations on the iHeartRadio Canada platform. All CTV weekday noon newscasts, with exception to Toronto, are set to come to an end. Bell is also closing the lights on its 6 p.m. and 11 p.m. newscasts on weekends at all CTV and CTV2 stations with exception for Toronto, Montreal and Ottawa. The changes come less than a year after Bell announced the company would be cutting 1,300 jobs, closing six radio stations and selling three. Bibic also told analysts in a fourth quarter earnings call that Bell will be shifting its focus toward cloud and security services, advanced advertising and digital transformation. “Given the lack of government and regulatory support for the historic capital investments Bell has made since the onset of COVID in 2020 and an unwillingness or inability to level the playing field between domestic competitors and global tech giants, we’re shifting our focus away from overly regulated parts of our business,” he said. The CRTC issued a statement responding to the Bell financial results stating it is concerned about job losses while emphasizing that it is not responsible for how private companies operate their business. “The CRTC does not determine how private companies allocate their profits. Companies are best placed to answer questions related to their business decisions. The CRTC is an independent, quasi-judicial tribunal that regulates the broadcasting and telecommunications industries in the public interest. We hold public proceedings and make decisions based on broad public records. We will continue to fulfill our mandate for Canadians.” Canadian Heritage Minister Pascale St-Onge said “it's a really dark day for the company, and my thoughts go to the affected employees and their families. And I must say that I am extremely disappointed and in disagreement with Bell Canada's decision for several reasons." She then noted that her government already responded multiple times to the media crisis and changes were already made at the CRTC to alleviate some of the pressures. “But at some point companies also have to chip in,” she told reporters. “They are not going bankrupt. They’re still making billions of dollars. They’re still a very profitable company and they still have the capacity and the means to hold their end of the bargain which is to deliver news reports.” Bell has been at war with the regulator in recent months over both its telecom and broadcasting policies. Bibic told staff that the CRTC “undermine investment in our networks, fail to support our media business in a time of crisis and fail to level the playing field with global tech giants.” "Of particular concern is a recent decision by the CRTC forcing Bell to provide third party resellers access to our high-speed fibre network before we have even had an opportunity to recoup our multi-billion dollar investment," Bibic wrote. In November, the CRTC directed large incumbent telephone companies to provide wholesale access to their fibre to the premises (FTTP) networks in Ontario and Quebec. The decision affects Bell and Telus Corp., who were given six months to implement the decision. The CRTC noted that incumbent local exchange carriers have primarily focused on FTTP deployment, passing more than 10 million Canadian premises by the end of 2022 while cable carriers have limited FTTP coverage, reaching around 625,000 Canadian premises. Due to Telus’ tiny footprint in those regions, Bell maintains that the decision singles it out and will cause irreparable harm. Bell is appealing the decision in court on the grounds of legal error and jurisdictional overreach and petitioned cabinet to overturn the decision. Bell also immediately responded to the announcement by reducing its network investments by $1 billion in 2024-2025. “If it gets worse on the regulatory front in terms of some of these rules… fibre access in this particular case, we will do more. And that could be cutting investments in these areas and then redirecting monies to growth capex and transformation capex and there could be more restructuring for sure,” Bibic told analysts Thursday. On the broadcasting side, Bibic attacked the CRTC’s new framework saying it “curiously still does very little to assist Canadian media companies” as they face increased competition from foreign tech giants. The CRTC held three weeks of hearings in November on whether foreign streaming platforms should make initial base contributions to support Indigenous and Canadian programming. Bell proposed a 20 per cent initial contribution from online undertakings and the creation of a news fund, among other things. The commission has not released its decision on the matter. Bibic also called out the regulator for renewing its broadcast licence until 2026 without a consultation “despite the fact that we're mired in an ad recession and an existential media industry crisis.” “The has greater flexibility on their news obligations than we do despite the fact that we've made it very public that we lose $40 million a year on news. We want to deliver news but we want to find a way to make this work,” he said. Bell, along with Corus Entertainment Inc., Rogers Communications Inc., and Quebecor Inc.’s Groupe TVA have all asked the CRTC to lighten its CanCon obligations. Bell is seeking to lift the requirements pertaining to the amount of locally reflective news it must broadcast and to reduce its Canadian programming expenditures and programs of national interest requirements from 30 per cent to 20 per cent and from 7.5 per cent to five per cent respectively. (So far the commission has only given Corus’ request special attention due to its status as Canada’s largest non-vertically integrated private broadcaster.) Instead, the CRTC renewed Bell’s 66 television and specialty channel licences for three more years on an administrative renewal basis despite its Part 1 application. Bell responded by filing a leave to appeal with the court. For Q4 2023 Bell reported that profits declined by 23 per cent compared to its Q4 2022, dropping from $567 million to $435. Total revenue remained relatively flat at $6.47 billion. While gross mobile subscribers increased by almost 18 per cent, net mobile subscribers decreased by 25 per cent year-over-year for a total of 92,085 new customers. Average revenue per user (ARPU) came in at $58.71 compared to $58.49 in Q4 2022. Bell’s net high-speed internet subscribers sat at 55,591, a 12 per cent decline compared to last year and its net retail television subscriptions saw a loss of 2,318. Bell noted that in Q4 2022 it saw an increase in its retail high-speed internet and retail IPTV subscriber bases due to its acquisition of Distributel. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Phalen Tynes-MacDonald at pcreed@thewirereport.ca

CRTC, St-Onge highlight Bell’s profitability in response to 4.8K job cut, CTV and radio closures

Broadcast | February 8, 2024

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

CRTC, St-Onge highlight Bell’s profitability in response to 4.8K job cut, CTV and radio closures

Broadcast | February 8, 2024

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Marie-Philippe Bouchard to take over from Catherine Tait at CBC

CBC head Tait grilled once again on executive pay, exit package

Tories shake-up membership of House of Commons committees

Government working with AI researcher Mila on governing use of cultural content

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us