Corus knocks on the door and the CRTC can no longer ignore local TV news

July 6, 2023

Applications from Bell and Québecor to shed their license obligations to broadcast local television news have put the CRTC on the spot: for how many more years will the Commission ignore the unravelling of local TV?

The networks have been goaded into asking for license relief on local TV thanks to the CRTC’s one attentive moment to local TV in the last six years, its bizarre ruling in June 2022 to strike down the CBC’s local programming requirements in Canada’s seven biggest cities. Bell and Québecor want the same, even though the federal cabinet overturned the CBC ruling and told the Commissioners to rethink it.

However there is another local TV issue on the CRTC’s stovetop that the previous chair thought he could leave on the back burner. Now it is boiling over.

That issue is the recent application of the Corus-owned Global News for admission to the $19 million Independent Local News Fund (ILNF) that currently is distributed to 18 local television stations not owned by cable companies. The ILNF was created in 2017 by the CRTC, financed by contributions tithed from cable companies.

Now that the Shaw family has sold its telecommunications and cable TV properties to Rogers, its Corus operation has become an independent broadcaster and Global News is eligible for ILNF funding.

But the impact of admitting Global News’ fifteen stations to the Fund will be to swipe half of the $19 million for Global, leaving the remainder for the existing 18 stations. (There’s a chart at the bottom of this post, missing all sorts of caveats and explanations, that lists the stations, their market size, and local TV competition. Please e-mail corrections to Howard.law@bell.net.).

If Global News gains admission to the ILNF it can cancel out the $10 million in special news funding it lost on April 1st after it was cut loose from its former parent company Shaw Cable (the CRTC requires cable companies to spend 1.5 % of its revenues on either its community or local TV stations). Global’s annual news budget is about $130 million.

On the other hand, its fairly obvious that the 18 independent stations — calling themselves the Local Independent Television Stations (LITS) —get the short end of the stick. Global’s admission to the ILNF will result in the LITS stations losing half of their ILNF funding to broadcast the news. It was an eyebrow-raiser to learn from the LITS’ CRTC filing that their stations collectively spend $27 million on news. That means they are already 70% funded by the ILNF even before having their allocation cut in half by admitting Global to the fund.

The CRTC is entirely responsible for this mess that everyone saw coming. When considering the Rogers-Shaw merger application eighteen months ago, the Commission was warned about overwhelming the ILNF with twice as many animals drinking from the same waterhole. Its solution was to ignore the problem, or rather punt it. In three short paragraphs in the merger ruling, the CRTC confirmed Global would be eligible for the ILNF and that the Commission would, when it got around to it, reconsider the income stream that feeds the ILNF pool.

Unfortunately, the CRTC didn’t think to say anything helpful in those three paragraphs about synchronizing the admission of Global to the INLF and reappraising its financing. It also didn’t schedule the public proceeding to review ILNF funding, a review that will take a year to complete.

Global is eligible for the $10 million in ILNF funding now and wants it right away, having already lost the $10 million local TV funding from its cable parent in April.

The LITS stations point out that despite Global’s technical eligibility for the $10 million, the CRTC merger ruling has yet to give its formal permission to access the Fund.

The LITS stations say Global can afford a 10% hit to their news budget because of the Corus’ profitable specialty television channels, more than LITS can afford a 50% hit. The LITS stations also give Global’s owners, the Shaw family, a jab in the ribs by suggesting they are flush after cashing in on the merger. Not to be outdone, the Corus filings point out that five of the eighteen LITS stations have their own corporate sugar daddies with profitable media divisions that can cross-subsidize local stations, specifically Stingray (specialty channels) and Pattison (outdoor advertising).

The solution of course is for the Commission to hold a hearing immediately to sort this out and be prepared to work at high speed. There’s a little bit of slack: as a condition of approving the merger, the CRTC directed Rogers to pay the ILNF a $4.35 million lump sum. That could be used for about eight months of full ILNF funding to all LITS and Global stations.

But unless the Commission is prepared to let several of those LITS stations go dark —and I know some Heritage MPs who will make the Commission’s life miserable if that happens—- it needs to replenish the ILNF waterhole by the end of 2023 with an additional income stream. That money can only come from cable companies or some other source.

The Commission has to do all of this while the ground is shifting underneath its regulatory feet.

The Commission’s main proceeding for implementing Bill C-11, BNOC 2023-138, will be re-engineering the responsibilities of all broadcast undertakings, including licensed Canadian broadcasters and foreign online undertakings. Local news is part of that review. But as it stands, the local news file is not one of the issues scheduled for the first round of consultations that begin in November. The Commission isn’t scheduled to even consider local news until some time in 2024.

The other wild card is Bill C-18. In policy theory, that legislation should have no bearing on the ILNF: stations will finally get paid by Google and Facebook for their intellectual property, news content, and be able to hire more journalists. But the CRTC will likely want to take C-18 into account in assessing what is needed to keep these stations alive.

For years, the Commission’s approach to local TV news has been feckless. Now it’s time to be decisive and bold.

Let’s see if the Commissioners are up to it.

***

***

If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page; 

or e-mail howard.law@bell.net to be added to the weekly update; 

or follow @howardalaw on Twitter.