On the eve of the CBC's biggest broadcasts in years, its president says poor ratings for the current TV season and lower-than-expected revenue are creating "dark clouds on the horizon" that could spur a fundamental overhaul of the public broadcaster.
In a memo issued to employees last week, CBC president Hubert Lacroix said he had informed the broadcaster's board that "we are projecting significant financial challenges: a weak advertising market across the industry, lower-than-expected schedule performance in the key 25-54 year-old demographic on CBC Television, lower than expected ad revenues from Espace Musique and CBC Radio 2, and the loss of the NHL contract (and its anticipated ripple effect on our ability to sell the rest of our television schedule next year and beyond) have combined to create an important revenue shortfall for the whole of CBC/Radio-Canada, starting with the next fiscal year."
In November, Rogers Communications announced it had paid $5.2-billion for rights to 12 years of NHL games, beginning this fall. While the CBC will continue to show Saturday night games for at least the next four years, Rogers will earn the ad revenue on those broadcasts. The "ripple effect" referred to by Lacroix stems from the fact that CBC sales reps previously used hockey as a calling card to help them sell ad time on other broadcasts across the network.
Lacroix noted that the shortfalls come on top of cuts to the broadcaster's federal funding as well as the discontinuation of the Local Programming Improvement Fund, which funnelled $47-million to the CBC in 2011. He implied that the lack of revenue could prompt permanent changes to the way CBC approaches its mission, particularly given the federal government's continuing refusal to commit to multiyear funding.
"We are working hard to confirm the bottom line. However, it's clear that tough and more fundamental decisions will have to be made to establish a longer-term, sustainable, financial model for our corporation. This will be a central priority of our strategic plan beyond 2015. We can't be resizing the public broadcaster every second year."
Lacroix concluded the memo on an upbeat note, citing the CBC's high hopes for its Olympics broadcasts as well as the NHL playoffs starting in April and the FIFA World Cup beginning in June. "I wrestled with the timing of this particular message. But, while I fully admit the timing is not ideal, as we prepare for the Games, I have always believed that you need to know, and always promised to be as frank and direct with you as I can be. In that spirit, I promise to have updates for you as they become available."
"In the meantime, let's continue to show Canadians what we're made of."