TORONTO – It might be a bit of a scare tactic – and if you work for Corus Radio, this might scare you – but thanks to the recent Copyright Board ruling that increases fees paid by radio stations to artists, Corus Entertainment may be forced to trim its radio division workforce, said company CEO John Cassaday today.
Eleven days ago, the Copyright Board of Canada significantly increased the tariff levels that radio stations have to pay to the Society of Composers, Authors, and Music Publishers of Canada (SOCAN), and to the Neighbouring Rights Collective of Canada (NRCC) for the use of their music.
Some increases are as high as 46%, according to the Canadian Association of Broadcasters, which is strenuously objecting to the ruling, as reported by www.cartt.ca, and will likely appeal it to the Federal Court of Canada.
During this afternoon’s conference call with financial analysts to discuss Corus Entertainment’s very good 2005, Cassaday lit into the board’s surprising fee increase.
“(The decision) went well beyond our expectation and well beyond what we think is reasonable or warranted,” said Cassaday. “This decision will cost Corus in excess of $6 million (immediately) and we estimate the annual incremental costs at $2.5 million.”
The Copyright Board seems to be punishing private radio companies for good results and efficient operations, positives that artists are already sharing in, he continued.
“With radio revenues growing in excess of 8% last year, composers and performers have seen their income increase far ahead of inflation even before this newly imposed rate,” added Cassaday.
“Regrettably, this will force us to reduce our costs and given the magnitude, this will likely mean a loss of jobs – which is disappointing given that Corus employs 16% of Canada’s radio workforce and that 50% of these copyright fees goes to non-Canadians.”
When asked by the analysts on the call (reporters are allowed to listen only) if anything else would be done instead, Cassaday said Corus Radio will be “scrubbing all of our costs” to look for ways to offset the fee increase before turning to payroll.
“We are committed to achieving the earnings growth that we laid out for everyone at our investors conference a couple of weeks ago… we will look at everything that moves and hope not to have to impact jobs (but) we won’t let this become a shareholders’ problem.”
Cassaday added later in the call that Corus and the industry will probably appeal the ruling to the Federal Court, “but the bad news is that even if (the court) thinks we make a valid point, they then put it back to the Copyright Board so we’re not sure there’s going to be much of a difference.”
