TV profits down: CRTC

New report by the federal watchdog shows profit drop at conventional stations due to higher programming spend. Told you so, says CAB.

Conventional TV stations saw profits plunge in 2006 because of increased spending on foreign and domestic programming, according to new numbers from the CRTC.

Private conventional stations across Canada saw revenues stay relatively flat last year, at $2.2 billion, while expenditures rose, sending profits before interest and taxes way down to $91 million from $242.2 million in 2005, according to a report released by the Commission on Wednesday, which charts recent and four-year trends in TV finances.

Much of the money went to programming. Foreign shows were the biggest inflation drivers, with spending up 12.2% to $688.3 million, while homegrown programming increased 6.3% to $623.7 million. ‘Of this amount, $144.7 million was paid to independent producers to acquire Canadian programming, an increase from the $138.5 million paid to them in 2005,’ says the CRTC. Programming expenditures have increased 10% from 2002 to ’06.

The biggest expense at home was news at $328.1 million, while the lowest were game shows at $5.7 million. In addition to programming costs, $593.6 million was paid in salaries to 8,197 employees in 2006.

The Canadian Association of Broadcasters says the lower profits match its own recent report. ‘This is in line with what our members presented during the [CRTC's] television review in February,’ says CAB VP communications Pierre Pontbriand. ‘The figures really speak for themselves.’

Mario Moto, SVP of broadcast regulations and research at the CFTPA, notes that cash-strapped broadcasters are seeking price cuts from producers. ‘We’ve also noticed that private broadcasters are now spending more on foreign programming than they are on domestic. That’s not good enough for us, and we don’t think it should be good enough for the CRTC.’

This story first appeared in Playback Daily.