CTV, Global hit by global economy woes

MONTREAL — The global economic woes are beginning to bite in Canada where two of the country’s big three networks, CTV and Global, unveiled job losses and other cost-cutting measures last week.

Ivan Fecan, CEO of CTVglobemedia, which owns CTV, held a townhall-style meeting at its Toronto headquarters on Nov. 19 to inform staff that job cuts were coming — but, critically, did not reveal numbers or how much money the company needs to save.

He cited the disastrous economic climate, noting that some of the network’s biggest customers were facing potential bankruptcy.

The news follows CanWest Global’s decision to eliminate 560 positions in a bid to save about C$61million a year ($48.6 million). CanWest owns the Global and E! Networks and a number of pay TV channels.

In a memo to staff sent on Nov. 18, Fecan wrote: ”We have concluded that it is no longer possible to maintain the current status quo of our company’s operations. So, effective today, we are going to implement a number of immediate measures that allow CTV to save significant costs while utilizing our resources more efficiently and effectively.”

CTVglobemedia also owns a slew of pay TV channels including sports channels TSN and RDS and  MuchMusic. But Fecan’s memo did suggest the cuts might not be across the board.

”Where there is strong revenue or competitive reasons, we may choose to add, not cut, resources,” he said.

Both networks are suffering from the Canadian Radio-Television and Telecommunications Commission’s recent refusal to allow terrestrial networks to charge cable and satellite operators for carrying their channels, which would have brought in extra coin.

“We don’t have our heads in the sand,” says Peter Murdoch, veepee at the Communications, Energy and Paperworkers Union of Canada, which reps staffers at both CanWest Global and CTV. “There’s a downturn in the economy and a pretty drastic one at that, so of course the media is going to get hit. And of course these corporations are going to look at some cost-cutting. Everybody is getting hit here.”

 One of the worries for the union is that these job cuts will result in a drop-off in local programming at the networks.

 “At a time of crisis in the economy, it’s precisely the time that viewers turn to their local television stations to find out what’s going on with their municipalities and their education system and their pension plans and the job market,” Murdoch says. “There’s an opportunity to build audience. As long as the networks don’t start eating away at their local news programming, I think at the end of it that they could come out in very good shape. But if they start to really axe local programming then I fear the worst.”

However, Chris Waddell, an expert in media and business at Carleton U., criticized the companies for taking on too much debt.

“CTVglobemedia and CanWest Global have made major acquisitions, much of which is financed with debt,” Waddell told the Canadian Press. “And when you finance yourself with debt … it may not take a lot to put yourself into a position where you have to pay your debt costs — so you have to cut back in order to do that.”

The head of the country’s producers’ body remains hopeful that the cuts will have a minimal impact.

”It’s a challenging time,” says Canadian Film and Television Production Assn. prexy Guy Mayson.

”However, I’m hearing that the major networks are not backing away from their programming commitments. They’re cutting to be more efficient but programming is their strength and I don’t think they can cutback on programming because they have to keep the schedules healthy.”

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