GATINEAU – One thing the aggregate annual financial returns of Canadian broadcast and distribution companies showed is holding the rights to the Olympics, even a home one, isn’t all it’s cracked up to be.
(Last Friday, February 10th, the CRTC released the 2011 broadcast year aggregate annual returns of large distribution undertakings, multi-system operators and conventional television and radio ownership groups, a requirement under Broadcasting Regulatory Policy CRTC 2009-560. The 2011 broadcast year ended on August 31st.)
The figures show that at Bell Media (which during the 2010 Vancouver Winter Olympics was still CTVglobemedia) 2011 national ad sales were way off compared to 2010, down 11.4% to $650.4 million, which seems a pretty solid reflection of a come-down after the Vancouver Olympics, which it broadcast along with Rogers. Bell Media’s overall revenue decreased 10.4% in 2011 to $836.6 million.
But, what also came down in 2011 – much, much, further – were the company’s expenses. Programming and production expenses in 2011 were $519.4 million, compared to $724.5 million in 2010, a drop of 28%. Sales and promotional expenses also dropped 17% to $87.6 million at the broadcaster. In all, that led to a more than $214 million drop (22.6%) in expenses for Bell Media (which in this case means only the company’s conventional broadcasting arms CTV and CTV Two) from 2010 to 2011. It also meant a $57.8 million profit before interest and taxes in the last broadcast year compared to a $54 million loss back in 2010.
The company also kept its figurative wallet in its pocket far more during its 2011 trip to Los Angeles, spending $293.4 million on foreign (mainly U.S.) TV shows, or 18.4% less than the prior year and 24% less than 2009. The company’s overall Canadian content expenditure also took a dive compared to 2010, but again, that was primarily due to the lack of Olympics in 2011 (sports production went from a $137 million cost in 2010 to zero) as well as a 40% cut in spending on Canadian drama, to $12.5 million, which, notably, is also well below CTV’s 2009 and 2008 drama spend.
(It’s important to note that these dollar figures represent over-the-air financials only and not specialty channels, whose results are published separately by the Commission.)
When it comes to Canadian content, of course, no one can touch the CBC. Thanks to the dollars it gets from all Canadians, the English and French TV divisions spent $709.6 million on the production of Canadian television content ($409.1 million and $300.5 million, respectively – and 48% more than the $478.5 million the private ‘casters spent on Cancon). National ad sales also saw a nice jump at CBC TV English in the 2011 broadcast year, rising 11.4% to $215.3 million. Ad sales at Radio-Canada were up slightly.
Leading French private broadcaster TVA was a Cancon leader, too, especially given its smaller market, spending $111.3 million in 2011, only slightly under Shaw Media’s (Global Television) $114 million Cancon expenditure. However, when it comes to ad dollars in the French TV market, Radio-Canada is the clear leader, pulling in $123.4 million compared to TVA’s $106.9 million.
Of the private broadcasters, only Rogers’ conventional stations (Citytv, OMNI) took a loss, albeit a small one of just $203,000. While it trimmed its Cancon spend 5% in 2011 (mostly from news), Rogers went the other direction in L.A., spending 8.7% more on foreign programming in 2011 at $154.3 million. Shaw TV stayed about the same on its Cancon and foreign programming spends from 2010 to ’11. Shaw TV’s net income after taxes was $45.4 million (a 34% increase) and Bell Media’s figures you see above. CBC TV, on the other hand, took a $1.4 million loss on the English side in 2011, a vast improvement over the $20.6 million hit the prior year, thanks to spending decreases.
As for the two main French broadcasters, TVA’s net income came in at $36 million, which was a 26.5% drop compared to 2010. Radio-Canada posted a net loss of $1.3 million on the year, which was an improvement over the $16 million loss of 2010.
THE DISTRIBUTION SIDE, however, is where the real money resides. Even the smallest publicly traded carrier, Cogeco Cable, took in $1.13 billion in revenue (from TV, phone and Internet) during the 2011 broadcast year, almost exactly what CTV, CTV Two, Citytv and the OMNIs took in, combined, in the same year.
Wholesale fees, or affiliate payments, are on the way up, however. Both Rogers and Shaw Communications (Shaw Direct plus Shaw Cable) each paid 7.3% more in fees to American and Canadian specialty channels in 2011 ($572 million and $805.7 million, respectively). Videotron’s rose 6.7% to $342.6 million while Bell TV’s (Fibe and some small cable systems as well as its satellite division) rose just 3.8% to $711 million. Only Cogeco bucked the trend as its affiliate fees dipped 5% to $253.8 million.
The distribution divisions of the vertically integrated companies spend far, far more on technology, however, than do the broadcast sides. As an example, Videotron spent $447.5 million on technology in 2011 (it’s ramping up wireless and outspent even Rogers there) while all the broadcasters together only spent $176.2 million on the technical side, and that was in a year where they all had to complete many digital upgrades to make the August 31st deadline to switch from analog.
When it comes to the PBIT line (profit before interest and taxes) Bell TV had a tough 2011. Costs on its terrestrial side are plenty high as it rolls out Fibe so its 2011 loss came in at $137 million (even though revenue climbed 51% to $91 million – from 96,500 customers as of August 31st). On the Bell satellite TV side, increased costs, amortization and depreciation led to a loss of $44.8 million, worse than last year’s $3.3 million loss, based on 1.97 million customers, which is down 10,000 from 2010.
Shaw Communications saw its PBIT lines drop in 2011 as cable decreased 2.4% to $876.6 million and Shaw Direct satellite dipped 10.5% to $153.4 million. At Rogers, thanks to growing revenue and total expenses that held the line compared to 2010, its PBIT jumped 30% to $828.8 million while at Videotron, revenue grew but expenses jumped, meaning PBIT fell off 16% to $657.6 million. Finally, Cogeco saw an increase in PBIT of 15.5% to $398.2 million.
Those big carriers also contributed a total of $363.4 towards the production of Canadian content, either to the production funds or towards the creation of community channel programming. The cable companies mentioned (Shaw, Rogers, Videotron and Cogeco) collectively spent $106.4 million on their community channels in the 2011 broadcast year on 862,000 hours of television (when counting all the hours aired by all of their cable systems, that is, since there are but 8,760 hours in a year).
While Canadian broadcasters neither added nor significantly cut staffing levels in 2011, (Rogers’ cut about 9% of staff from its TV ranks and was the largest mover among broadcasters), there were some significant alterations on the distributors’ side. Videotron added nearly 800 employees in 2011, taking staffing levels to 5,621 and Bell added about a hundred on the terrestrial TV side.
However, there were over 900 positions eliminated in 2011 as Shaw Cable reported 200 fewer employees, Bell DTH 226 fewer workers and Rogers Cable cut 503 positions in 2011.
Average salaries (all of which grew in 2011), which can be calculated, too, with these figures as staffing levels are listed along with remuneration, are also interesting.
Broadcast TV average salaries:
CBC TV English: $98,200
Bell Media: $94,000
Rogers Television: $89,200
CBC TV French: $89,200
Shaw Television: $85,200
TVA: $77,900
Distribution average salaries:
Bell TV Terrestrial: $153,000*
Bell TV Satellite: $114,900
Rogers Cable: $83,100
Shaw Cable: $83,000
Videotron: $73,000
Cogeco Cable: $66,900
Shaw Direct: $62,500
* We wonder if this isn’t a typo since according to the figures, the average salary there rose 168% over 2010.
