CRTC walks back on licence renewals, ups PNI spending

The CRTC published its reassessed baseline spending requirements for programs of national interest (PNI) following industry backlash and a government request to revisit the decision that set minimums at five per cent of a broadcaster’s previous year revenues. The regulator said Thursday it is increasing the minimum threshold for BCE Inc. and Corus Entertainment Inc. to 7.5 and 8.5 per cent, respectively, while maintaining the five per cent for Rogers Communications Inc. PNI include documentaries, dramas, comedies, and Canadian award shows that communicate Canadian stories. The licensing conditions will apply this Sept. 1 through the rest of the five-year term to 2022. The CRTC projects the new minimums for the three companies will amount to a yearly average of $206.8 million through the rest of the term, while some creative groups said Thursday it could be as high as $289 million. The commission considered 6.5 per cent ($171 mllion per year for all three companies) as a balance, according to its decision, but noted that it would be lower than the historical requirement because of the now-condensed term of roughly four years to the end of the period. That could mean the CRTC may revisit the figures at the end of the term. In separate press releases on Thursday, the Canadian Media Producers Association (CMPA), Writers Guild of Canada (WGC) and the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) praised the decision as a “win” for Canadian creators. “Today’s CRTC decision means more jobs, more economic output, and most importantly, more of the shows that Canadians love,” CMPA board chair Scott Garvie said in a Thursday press release. Bell and Corus both offered a one per cent increase to six per cent for a revised minimum last year, which they said would result in a windfall of “tens of millions of dollars.” That suggestion came after an order-in-council last August directing the CRTC to review the May 15 license renewal decision which first standardized those minimums. In the aftermath of the May decision, the creative groups lambasted it for its potential to devastate the industry. Historically, the broadcasters have spent more than that minimum on PNI. Bell declined to comment on the decision. Corus said it is still reviewing the decision and can’t comment at this time. The CRTC reviewed the impact of a six per cent PNI and found that the resulting spend would’ve been lower compared to the previous licence term. “The net effect of these levels would result in an average expenditure by the groups of $158.9 million per year from the 2018-2019 through 2021-2022 broadcast years, resulting in a likely decrease in PNI expenditures relative to the previous licence term,” Thursday’s decision read. The creative groups estimated that a five per cent PNI would amount to a $200-million loss over the five-year term. Factored into those numbers are projected revenue declines of 9.7 per cent over the course of the new licence period compared to the previous term, though the CRTC noted that the larger reason for its decision is based on the impact of the comparatively lower six per cent PNI. It said that the broadcasters would likely spend the minimum five per cent in the event the revenues slide. A report by analyst Mario Motaduring initial consultation on the licence renewals showed that Bell and Corus spent an average of eight per cent for PNI. The regulator further reasoned that the spending requirements should be based on historical spending, in-line with the rationale Rogers proposed in its intervention and the reason why the company can keep its five per cent minimum -- it increased its PNI spend from 3.8 per cent to five in 2013. In an emailed statement, WGC executive director Maureen Parker praised the commission’s decision to go back to historical spend instead of a “whimsical figure that the broadcasters came up with.” But ACTRA national executive director Stephen Waddell warned in the organization’s release that the decision doesn’t erase the challenges in the digital space. “ACTRA knows there’s much more to do to ensure a future for Canada’s film and television industry in a digital era.” The OIC requested that intervenors consider how the CRTC can ensure that “significant contributions” are made to PNI, music programming, short films and short-form documentaries, with Rogers and Bell suggesting that the CRTC expand PNI funding categories to include those aforementioned genres. Currently, English-language groups aren’t required to contribute directly to music programming. On Thursday, while the regulator said additional funding to short-form content is unnecessary, it honoured a temporary expenditure requirement to music of 0.17 per cent from both English- and French-language groups’ previous year revenues, but elected not to add music to PNI for fear that it would take away from spending for other genres in the basket. The money from the English groups will go to an existing fund known as Factor and to Musicaction from the French groups. “MuchFACT, Bravo!FACT and vidéoclip financing helped give so many of us our start in this business, including many of our most internationally acclaimed filmmakers,” Directors Guild of Canada national directors division chair Warren Sonoda said in an emailed statement. “At a time when we’re looking to tell stories from more diverse voices, we have got to support that emerging talent.” Also on Thursday, the CRTC revised its May decision that declined to impose specific requirements to fund original French-language programming from Bell, Corus, Group V Media Inc., and Quebecor Inc., suggesting that the groups now commit 75 per cent of their Canadian programming expenditures (CPE) annually to that programming after the first year (because of the reduced time-frame, it is imposing a 50 per cent requirement in the first year). It initially argued that spending for these programs was sufficient, but changed tack and set the requirement based on historical spending levels. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Bryson Masse at bmasse@thewirereport.ca

CRTC walks back on licence renewals, ups PNI spending

News | August 30, 2018

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CRTC walks back on licence renewals, ups PNI spending

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