CTV boss brings the doom, gloom
CEO Fecan predicting 'significant' losses on b'cast sideTORONTO -- In the latest sign of trouble for Canadian TV, the CTV network on Friday signaled that the ongoing recession is having a dramatic effect on its profits.
"This year, we will lose a significant amount of money in conventional (TV)," Ivan Fecan, CEO at CTV-parent CTVglobemedia, said in an internal memo to employees.
Fecan said the situation at the main CTV network is "alarming" thanks to the advertising downturn and continued audience fragmentation, while the condition of his secondary A-branded channels remained "grave."
As a result, CTVglobemedia is prepared to ask Canada's TV watchdog to renew the A channels for only one year at upcoming hearings so it can stem their continuing losses.
The CTV network remains Canada's primetime ratings leader on the strength of such U.S. series as "American Idol," the "CSI" franchise and "Desperate Housewives."
The Canadian Radio-television and Telecommunications Commission traditionally grants seven-year license renewals, and grants one-year extensions only to TV stations in imminent danger.
Also Friday, rival Canadian broadcaster Canwest Global Communications was facing a deadline to renegotiate an existing $300 million with senior lenders or risk defaulting on its growing CAN$3.9 billion debt load. Canwest said late Friday that it extended its debt refinancing talks with bankers to March 11. The broadcaster added it had "sufficient liquidity" to continue operating until its next deadline.
The Canadian broadcaster, which also holds a controlling stake in Australia's Network TEN, has hired an investment bank to help it sell off assets and raise cash to service its debt load.
CTV and Canwest Global are only the latest Canadian broadcasters to succumb to an advertising slowdown and credit squeeze. Also Friday, Chum Radio, a division of CTVglobemedia, said it is shedding 40 jobs as a cost-cutting move during the current recession.
Newspaper publisher Torstar Corp. on Thursday wrote down its 20% stake in CTVglobemedia, which also operates the Canadian ratings leader CTV, by $95.7 million, to $200 million (HR 2/26).
And the Canadian Broadcasting Corp. said it may have to air more U.S. programming to make up for a growing advertising revenue shortfall.