Study: Ending TV Ad Revenue Would Undermine CBC

Wheel of Fortune Wheel 2011
Sony Televison

Wheel of Fortune Wheel 2011

The Canadian pubcaster released a commissioned report that projects a $533 million hit to the domestic broadcast industry if Ottawa ends its dependence on advertising dollars.

TORONTO - The Canadian Broadcasting Corp. (CBC) on Monday said the federal government eliminating its TV ad revenue would produce a $533 million hit to the Canadian TV industry.

That blow, or even a negative move to reduce the CBC's TV ad revenue, would come on top of deep job cuts and programming changes anticipated as Ottawa looks to axe the pubcaster's operating budget by 10 percent.

“The elimination of advertising revenues would seriously compromise the corporation’s ability to fulfill its mandate and roll-out initiatives planned under 2015: Everyone, Every Way,” CBC/Radio Canada president Hubert Lacroix said Monday as he released the ad revenue impact study by the Nordicity Group.

The commissioned report projected the CBC, which secures essential ad dollars airing programming like Hockey Night in Canada and U.S. game shows like Jeopardy! and Wheel of Fortune, would lose $368 million in TV revenue if its access to the national advertising pool was cut off.

In addition, the pubcaster is projected to have less money on hand to spend on local programming and would need to offset an estimated $190 million in added costs to fill airtime freed-up by an end to advertising and lucrative sports programming on the CBC schedule.

Of course, that scenario would suit private Canadian broadcasters that have long complained to Ottawa that the taxpayer-funded CBC receives TV ad dollars that they covet.

The pubcaster, while getting most of its operating funds from the federal government, depends on TV ad revenue to close the gap between its taxpayer subsidy and production costs.

Those ad dollars will become even more critical to the CBC’s survival after Ottawa told all government departments and crown corporations like the pubcaster to model cuts to their operating budgets of five percent and 10 percent.

No final decision on the eventual chop to the CBC’s operating budget has been received by top network executives.

But they are understood to be working on the assumption a 10 percent cut to the CBC's annual $1.1 billion parliamentary appropriation is in the works to help the federal government balance its books by 2014-15.