CBC would keep asset sale proceeds: minister

Thu Mar 26, 2009 6:27pm EDT
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TORONTO (Reuters) - Canada's federal government is ready to let the Canadian Broadcasting Corp keep the money from any assets the public broadcaster sells as part of its plan to cope with a growing financial shortfall, a minister said on Thursday.

"The return on the benefits of those sales would go to the CBC," Heritage Minister James Moore told CBC Newsworld in an interview.

His comments suggest that the government may be prepared to approve asset sales the CBC undertakes in a bid to cope with an estimated C$171 million shortfall for fiscal 2009-2010.

They also come just a day after the CBC -- which receives more than C$1 billion in government funding a year -- announced it would have to cut 800 jobs and reduce programing across its television and radio networks because of a plunge in the advertising market.

The CBC said it expects the cost cuts will also include about C$125 million in sales of assets such as real estate.

Like other media companies, the CBC is struggling with a plunge in ad revenue as the recession forces marketers to reduce spending.

Aside from government funding, the CBC 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.   Continued...

<p>A sign is seen at the Canadian Broadcasting Corporation building in Toronto, March 25, 2009. REUTERS/Mark Blinch</p>