Losses accelerated at Sun News Network as the fledgling news service invested heavily in Canadian content, according to filings that shed light into the channel’s finances just weeks ahead of a hearing that could seal its fate.
Sun News is asking the Canadian Radio-television and Telecommunications Commission to grant it mandatory carriage, which means it would be included on every digital basic television package in the country. The designation means it could charge more for advertising because it would be in more homes, and comes with guaranteed revenue from subscriber fees.
The channel lost $18.5-million in the year ending August 2012, according to the CRTC filing, compared to $13-million in its first year. But it also ramped up program spending, allocating 89 per cent more toward Canadian programming than it did in 2011, pushing its total to $14.1-million.
It also directed more money toward its staff – increasing its payroll by 47 per cent while only adding three new employees to its 150 person head count. It spent $10,864,064 on salaries, with the average worker earning $72,427.
Its heavy reliance on self-produced, Canadian content is at the heart of its mandatory carriage bid. Without five years of mandatory carriage, the channel’s executives have said, the channel faces an uncertain future. The channel was in 4,856,022 homes when the filing was compiled, but there are about 12 million households in Canada with basic television packages or better.
The channel brought in $5.6-million in revenue in 2012, with $2.9-million coming from subscriber revenue and $1.4-million from national advertising and the rest coming from other sources. If it received the designation, it could almost triple its subscriber revenue and come close to a profit.
Sun News said it needs to get into every home to give it a fair shot at winning over subscribers. The country’s other all-news networks were given the same opportunity when they were founded, the Sun said, and have been able to translate that early advantage into long-term stability.
CTV News Channel now has 8.7 million subscribers, and posted a $5.9-million pretax profit. CBC News Network has 11 million subscribers, and earned $15-million in the same time.
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