Tag Archives: CTF

Government renews cash to embattled TV fund amid industry standoff

OTTAWA (CP) _ Heritage Minister Bev Oda has renewed $200 million over two years to the Canadian Television Fund, now rocked by a crisis of industry support that could staunch its cash flow and threaten fall productions.

Her statement Friday comes as two of Canada’s largest cable companies are refusing to pay monthly contributions to the fund in protest of how it operates.

Oda has invited five of the major players in the fund to discuss their concerns with her and another senior official on Tuesday.

She said the boycott by Shaw Communications (TSX:SJR.B) and Videotron, which is controlled by Quebecor Inc. (TSX:QBR.B), is a serious matter. And it will essentially kick-start another review of the fund under pressure from private-sector contributors.

In the last month, Shaw and Videotron have stopped monthly payments that so far total more than $6 million.

"By withholding their mandatory payments, it will create a challenge for the television fund to meet its cash flow requirements," Oda told a news conference on Parliament Hill.

"It is by regulation of the CRTC (Canadian Radio-television and Telecommunications Commission) that they’re asked to make a contribution to the production industry."

Still, she said: "I’m confident that we can find resolution."

The minister says she wants to hear any complaints, particularly about how the fund is governed. She noted that the $260-million Television Fund, set up 12 years ago to support homegrown programs, was reviewed in 2001. A new governance structure was subsequently announced in 2005.

"Obviously there’s still some concerns and discomfort with the structure that was set up.

"I would like to hear what those discomforts are."

Shaw and Videotron are pushing for more control over how $150 million a year in industry contributions is spent, including the one-third share of television fund cash that helps to independently produce programs used by the CBC and its French-language counterpart. It’s a sore point among some private contributors because the public broadcaster already gets more than $1 billion a year from taxpayers.

The CBC says is doesn’t receive any money from the fund, but that a third of CTF productions are earmarked for the broadcaster because it is the single largest investor in original Canadian programming.

Douglas Barrett, chairman of the fund, says the TV production industry faces an impending $63-million budget shortfall after the Shaw and Videotron pullout. The fund counts on the two companies for 20 per cent of its revenues, Barrett said.

"Our biggest and most immediate concern is all the production applications in hand right now," and the tens of thousands of jobs that depend on related projects, he said in an interview Friday.

"We need to find a solution by the end of the fiscal period (March 31) so we can be in business for next year."

Oda’s announcement Friday "saved the day" as a show of confidence in the fund and a step toward a long-term solution, Barrett said.

Her willingness to reviewing the fund’s rules and structure showed "open mindedness," Quebecor executive vice-president Luc Lavoie said Friday. But the company’s terms aren’t negotiable.

"It’s not enough (for the government) to say ‘We will review,"’, he said from Montreal. "We want to know the details, we want to know where it’s going. Because even though we’re going in there with an open mind, we’re going in there with a very firm position as well."

Videotron, along with Rogers Communications (TSX:RCI.B), Cogeco (TSX:CGO) and Bell ExpressVu have been invited to the Tuesday meeting, he said. Rogers Communications declined comment on Friday.

Created in 1994 at the request of the CRTC, the fund has helped pay for such TV shows as "Degrassi: The Next Generation" and "Da Vinci’s Inquest."

If Shaw and Videotron refuse to co-operate, Barrett will ask the CRTC to explore legal action to recoup that money.

"The regulators have a duty to enforce the law."

New Democrat MP Charlie Angus, the party’s Canadian Heritage critic, says Oda must take much of the blame for the current standoff.

"It took a full-fledged crisis in Canadian television for the public to finally see the elusive heritage minister," he said Friday in an interview.

"She sent very, very mixed messages as to whether this government was committed to the Canadian Television Fund.

"And then when Shaw announced they were pulling out, there was radio silence from Bev Oda. She didn’t take this on at all until it was all out in the public media, and we’d already lost Videotron.

"It’s nice that she showed up, but she definitely, I think, is responsible."

Oda’s message to Shaw and Videotron should be: "Pay up," says Angus.

"They’re already laying down the terms and conditions of what they want from this government. It’s not their place. They have absolutely no business pushing their weight around like this."

Contributing relatively small amounts to the creation of independent programs is a sweet deal for the cable companies, Angus said.

The television fund was set up "following massive deregulation that was allowed by the CRTC.

"They’re in protected markets _ they’re not facing open competition from American cable giants across the border who would love to be able to get into our markets."

The fund’s board of directors includes representatives from the Canadian television production and distribution community, Canadian Heritage, Canadian cable and direct-to-home satellite companies and Canadian broadcasters. Board members are elected each year, and at least five must be independent.

Videotron contributed $14.3 million to the fund in 2005 and estimates that its obligation will be about $16 million this year. Shaw contributes about $56 million.

CTF could be in chaos

TORONTO (CP) _ Videotron’s decision this week to stop making its monthly payments to the Canadian Television Fund makes it impossible for the agency to plan for the upcoming year and that could put thousands of jobs at risk, the fund’s chairman said Wednesday.

CTF chairman Douglas Barrett said the Canadian television production industry will become "chaotic" as the fund struggles with an impending $63-million budget shortfall after Shaw Communications (TSX:SJR.B) said last month and then Videotron announced Tuesday that they would suspend their contributions.

"This is tens of thousands of jobs," Barrett said in an interview from the Quebec’s Eastern Townships, where the fund’s board is holding a retreat until Thursday.

"If these productions don’t proceed, this has an impact on broadcast schedules and production companies in this country who are already in a fragile state."

The fund said Wednesday it will ask Canada’s broadcast regulator, the Canadian Radio-television and Telecommunications Commission, to take legal action against Shaw and Videotron..

"The CRTC has regulations and it’s their legal duty to enforce them," Barrett said. "And we’re going to ask them to do so."

Quebecor Inc. (TSX:QBR.B), which controls Videotron through Quebecor Media, is also demanding that Heritage Minister Bev Oda launch a review of the management of the fund, which is coming up for renewal in March.

The latest developments are "very concerning" and will have a "significant impact" on Canada’s television industry, Chisholm Pothier, a spokesman for Oda, said from Ottawa.

"We hope that the sides come to a quick resolution, but in the meantime, we’re going to monitor these events as they unfold and what action we take will be determined in the wake of what happens in the next few days," he added.

CRTC regulations require medium and large cable and direct-to-home operators to contribute to the fund, based on a formula which includes gross revenues and the number of subscribers.

The CTF invested about $264 million in Canadian programming in its 2005-2006 year and receives about $100 million annually from the federal government.

But the two cable distributors say they are frustrated with the CTF, which they say isn’t paying enough attention to the concerns of its private-sector contributors.

Quebecor also objects to the fund reserving 37 per cent of its production funding for the government-owned Canadian Broadcasting Corp. and its French-language counterpart, Societe Radio-Canada, even though the CBC/SRC also receives more than $1 billion in government funding annually.

Videotron contributed $14.3 million to the fund in 2005 and estimates that its obligation will be about $16 million this year. Shaw’s contribution is about $56 million.

A spokeswoman for Rogers Communications, owner of the country’s largest cable distributor, declined to comment about the funding pullout, but said Rogers has contributed between $25 million to $29 million annually to the fund over the past few years.

Rogers estimates that its contribution to the fund will be about $34.1 million in 2006, but the company, like many who contribute to the fund, has the option to divert 20 per cent of their contributions to another CRTC-approved independent production fund.

Created in 1994 at the request of the CRTC, the CTF has helped fund such television shows as "Degrassi: The Next Generation", "Trailer Park Boys" and "DaVinci’s Inquest."

The fund’s board includes representatives from the Canadian television production and distribution community, Department of Heritage, Canadian cable and direct-to-home satellite companies and Canadian broadcasters. Board members are elected each year and at least five directors must be independent.

The fund’s board of directors is expected to meet in late January for a previously scheduled strategic planning session to establish the future direction of the organization.

But already, Videotron’s decision to join Shaw in withdrawing its financial support of the fund is sending shockwaves throughout the domestic television industry, whose could see project funding dry up within the next few months.

"The Canadian production industry would die a slow death _ maybe not such a slow death _ and the Canadian creators would no longer have work," said Pamela Brand, executive director of the Directors Guild of Canada, which represents over 3,800 people in the film and television industry.

"The Canadian voice would be completely gone, and the industry would wither and die. That’s what is at stake for us."

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