Profit slide, labor unrest has industry reeling

MONTREAL — Like their neighbor to the south, Canuck networks are feeling the double whammy of a cash crunch and poor economy.

The profits generated by Canada’s big three commercial broadcasters — CTV, Global and Rogers — plummeted last year to C$8 million ($6.4 million) from $91 million a year earlier, and that’s hurt everyone in the production milieu.

“It’s not a good scenario,” says Stephen Waddell, national executive director of Canadian actors union ACTRA. “We are pleased that some Canadian shows, like ‘Flashpoint and ‘The Listener,’ are being produced for both the Canadian and U.S. networks. But in the long-term, the industry is dependent on the health of the broadcasters and this industry is being impacted by the economic slowdown. Further, production in Canada is being affected by the labor unrest, by SAG not being able to come to a deal. The result is that there’s very little U.S. production in Canada. So it’s very difficult for Canadian performers.”

Aside from the slumping world economy, the huge profit slide is also due to the fact that Canada’s cable channels are stealing away more and more advertising from the commercial webs.

Last year, the main networks went to federal broadcast regulator the Canadian Radio-Television and Telecommunications Commission (CRTC) to argue that they should be allowed to collect a fee from cable and satellite operators in return for letting them carry their channels. The CRTC nixed that idea.

But this spring the nets are returning to the CRTC to plead their case during license-renewal hearings. Using the poor financial results as evidence, the webs are likely to seek a cut in the amount of Canadian programming they are obligated to air. The networks much prefer to run American fare, which delivers bigger audiences than local shows.

The commercial broadcasters spent $625 million on American programming in 2008, up 7.4% from $582 million the previous year. Waddell from ACTRA believes networks like CTV and Global are already paying way too much for Hollywood hits.

Besides, many of the webs’ parent companies — including CTVglobemedia and CanWest Global — own cable channels that are in much better fiscal shape.

“The broadcasters have an obligation to produce and broadcast Canadian programs,” he says. “These are the Canadian airwaves that they’re licensed to broadcast on.”

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