3 Min Read
TORONTO (Reuters) - The Canadian Broadcasting Corp, the publicly owned operator of national television and radio networks, will chop about 800 jobs and seek to sell assets to fight a growing financial shortfall caused by a sharp advertising downturn, it said on Wednesday.
The CBC, which has about 9,850 employees and receives more than C$1 billion ($813 million) a year in funding from the federal government, said it expects the shortfall to hit C$171 million in its 2009-2010 fiscal year.
It said its projections assume the government will authorize C$125 million in asset sales. It blamed its woes on weak ad markets, higher costs, a base-salary funding shortfall and aging infrastructure.
About 400 employees are being let go from the CBC's English-language service, 335 will depart the French-language arm and 70 are being cut in other areas of the company, said chief executive Hubert Lacroix.
"It's not easy," he told Reuters.
Like other media companies, the CBC, which operates television and radio networks in English and French, is struggling with a plunge in ad revenue as the recession forces marketers to reduce spending. It has also been difficult to predict when a recovery may take place, which further complicates broadcasters' plans.
"The kind of visibility that we have is very foggy, like the other broadcasters," Lacroix said.
The CBC also said on Wednesday it will scale back regional radio and TV programing and make cuts in news, drama, music and current affairs. As well, it will cut executive compensation by up to 20 percent, trim discretionary spending and reduce hiring.
Aside from government funding, the CBC normally generates roughly C$600 million a year in revenue from commercial activities, including about C$340 million from advertising.
The broadcaster has turned to the government for help, but it insists it isn't asking for more money. Instead, it has suggested a line of credit or an advance on future funding to deal with the current crisis.
The Conservative government has replied that it expects the CBC to cut costs just like its private-sector competitors.
"I've been told that it is a dead end," Lacroix said on Wednesday of the prospect of government aid. "We've been told publicly that CBC/Radio Canada is not going to get a dollar more."
He added that if Ottawa had provided the CBC with temporary financing to deal with the crisis, it is possible it could have avoided asset divestitures such as the real estate sale leasebacks that it now plans to undertake.
Cost cuts at two private-sector Canadian broadcasters, CTV and Canwest Global Communications Corp, have already resulted in hundreds of layoffs. CTV has cut 225 jobs since late November, while Canwest has cut 560, including 210 at its broadcasting operations.
Canwest is also looking to sell five conventional TV stations and CTV has announced it will shut two TV stations.
Reporting by Wojtek Dabrowski; editing by Rob Wilson