Headline, Industry News

Canadian TV profit picture

Ottawa (CP) _ Rising costs for buying popular U.S. shows like American Idol may be helping Canada’s private television stations win the ratings war, but they’re interfering with the profit picture.

The Canadian Radio-television and Telecommunications Commission said Wednesday that pre-tax and interest profit for Canada’s private broadcasters plunged to $91 million last year from $242 million in 2005.

The key reason for the drop was the higher cost of purchasing foreign programming.

Revenues from the sale of local advertising grew modestly at 3.4 per cent and national advertising sales held steady at $1.5 billion.

But expenses for programming rose 10 per cent, with foreign programs registering an even bigger hit on the bottom line by rising 12.2 per cent.

Private Canadian stations paid $688 million for foreign programming in 2006, up from $613 million the previous year.

Spending on Canadian programming was up also, but only half as much at 6.3 per cent.

Last year, broadcasters spent $74 million on Canadian drama shows and $101.6 million on general-interest programming.

News programming cost $328 million and another $66 million was spent on other information programs.