MONTREAL – While it’s all-hands-on-deck time for the CBC’s 16 days of broadcast and new media coverage of the Sochi Winter Olympics, CEO Hubert Lacroix sent out a note of caution to employees last week, warning hard decisions are coming once the sliding, riding, skiing, skating and sledding comes to an end.
“I couldn’t imagine a better start to the year than the Sochi Games!” Lacroix enthused in the staff memo. “Whenever I walk down the hall, wherever I happen to be, the energy is palpable. And the most exciting thing is, in just a few short days, that energy will be felt on every main street, coffee shop, living room, sports bar and smart phone in the country. We should all take pride in knowing that we are bringing those Games home as Canada’s Olympic Broadcaster.”
However, with the pubcaster still struggling to deal with $115 million in funding cuts from the federal government (to be carried out within three years); rumours that the ad market this past fall was rather soft for the public broadcaster; the knowledge that it won’t be able to earn any revenue from Hockey Night In Canada next season (and how not having that carrot will make it extremely difficult to interest advertisers in buying the rest of the CBC schedule); and its plans to sell some real estate and rent out space at its Toronto headquarters is not proving as lucrative as hoped, the CEO was forthright with his staff in the memo.
“I also see dark clouds on the horizon,” he wrote. “On Monday (January 27th), I informed the 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. These challenges are in addition to the last year of reductions announced from the Deficit Reduction Action Plan (DRAP) in 2012, the elimination of the Local Programming Improvement Fund (LPIF) and another two-year government-wide salary inflation funding freeze.
We can't be resizing the public broadcaster every second year." Hubert Lacroix.
The CBC had hoped to pull in about $11 million in annual revenues with ad sales on Espace Musique and Radio 2, something the CRTC only gave it permission to try in its license renewals in May.
“We are working hard to confirm the bottom line,” added Lacroix’s memo. “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,” he added.
“We’ve been through this before. Doesn't make it easier though.
“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.”
