Canada considering broadcaster bailout

ACTRA's Waddell warns against relaxing content obligations

TORONTO -- Canada's federal cabinet is considering the creation of a CAN$150 million ($121.5 million) fund to help rescue local TV operations at private broadcasters such as CTV and Canwest Global Communications Corp. as their ad revenue tanks in hard times.

Stephen Waddell, national executive director at Canadian actors union ACTRA, welcomed the small-market TV station lifeline Wednesday, but warned Ottawa not to relax Canadian-content obligations as CTV and Canwest Global prepare to buy U.S. at the Los Angeles Screenings.

"If the government or regulator takes that awful step, our broadcasters will be indistinguishable from the U.S. networks," he said.

And Lise Lareau, president of the Canadian Media Guild, said the $150 million fund should be extended to the Canadian Broadcasting Corp., which last month unveiled plans to cut 800 jobs and programming costs to deal with its own TV ad revenue shortfall.

News of a potential Canadian TV bailout comes a day after Canwest Global secured another extension in debt repayment talks with senior lenders.

But as bad as things seem for over-the-air broadcasters, new numbers released Wednesday show that cable providers and those with pay channels in their portfolios have been able to withstand the pressures of dwindling TV ad revenue.

Domestic broadcaster Corus Entertainment said that weaker kids advertising sales for its YTV and Treehouse Television brands led to lower second-quarter earnings of CAN$29 million ($23.5 million), compared with a profit of CAN$35.4 million in 2008. But revenue for the three months ending Feb. 28 actually rose 1% to CAN$181.4 million ($147 million), against a year-earlier CAN$178.7 million.

The increase stemmed from a jump in ad revenue at Corus' female-skewing cable channels and a growing number of subscribers at its Movie Central pay TV channel after it introduced HBO Canada.

And Canadian cable operator Shaw Communications on Wednesday posted lower second-quarter earnings on a smaller tax gain, compared with 2008. But when one-time items are excluded, Calgary-based Shaw said it earned CAN$128 million ($103 million) on revenue of CAN$839.1 million ($680 million), up from a profit of CAN$113 million on revenue of CAN$763.2 million in 2008.

Shaw said that its cable and digital TV subscriber growth was "solid" during the latest quarter despite the recession.

Canadian TV's reporting season continues Thursday when Astral Media, a rival cable and pay TV channel, reports along with Cogeco Cable.
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