CBC Spin is amazing but true

CBC Exposed recently obtained the following information from a CBC insider ...

A few examples of the spin that the CBC management seems to be so adept at:

1) Spin: The CBC No Longer Receives Over A Billion Dollars A Year from the Taxpayers

Recently the CBC management has begun the spin that the taxpayers no longer fund the CBC to the tune of over a billion dollars per year and the media has bought it – here is an article by the Globe and Mail’s John Doyle where cites this:

“Opponents sneer at the hundreds of millions of dollars in public support the CBC receives. (They can no longer bray about the catchy “billion-dollar subsidy” because the Conservative government cuts have taken the figure well below $1-billion.) Accusations of left-wing bias will be shouted. More accusations about overstaffing and overpayment to staff will be thrown around.”

http://www.theglobeandmail.com/arts/television/were-asking-the-wrong-question-about-the-cbc/article17893998/

It is just not true as the first $115 million in Fed cuts is over 3 years and then the first year of $115 million per year is not until the 2015/16 budget. So how do the CBC management come up with the spin to say they are not getting less than a billion a year? They take the $115 million from the $1.1 billion and that leaves $985 million.

But hold on a minute; the CBC receives other taxpayer funded programs like the CMF. In the 2014/15 budget period, the CBC Television (English/French) will receive over $83 million dollars from the CMF, who’s major funding source is Heritage Canada. Note: this is just the CMF Television funding we receive; it doesn’t include the CMF Digital and Convergence funds.

http://www.cmf-fmc.ca/documents/files/env-admin/allocations/2014-15-pep-allocations.pdf

This is not the only funding that the CBC uses for its television productions that adversely affect the tax payers. When the CBC uses outside production companies to produce show for them, the production budget is funded with the following basic formula: 1/3 License Fee from CBC, 1/3 CMF dollars (part of the CBC’s $83 million CMF allocation) and 1/3 tax credits that the productions companies receive and apply against the show’s production budget.

So on a $15 million television series, only 1/3 or $5 million comes from the actual CBC budget that is provided by Federal funding. The rest, $10 million, is from the CMF and tax credits.

2) Spin:  That NHL Hockey on CBC funded other CBC activities:

A quote from Hubert Lacroix:

When CBC president Hubert Lacroix spoke with employees last year in the wake of a cut to federal funding, he said the public broadcaster was working ardently to renew its agreement to carry National Hockey League games. “It’s an important piece in the funding and the assumptions that we have, because of what it represents in advertising revenue,” he told them. Estimates are that hockey may contribute as much as half of the CBC’s $450-million in annual advertising revenue, helping to fund many of the broadcaster’s other activities.

Ever notice how no CBC executive (or the media) ever discuss the costs associated with NHL hockey? It’s always a discussion about the revenue it brings in. Fact: the CBC has lost money on the NHL rights for years now – let me repeat that; the CBC has lost money on the NHL rights for years now. Also, those ad revenue “estimates” stated above are always provide to the media “off-the-record” by CBC executives (stating confidentiality clauses in the advertisers agreements).

The actual ad revenue was $120 million to $135 million over the last few years. The rights fees paid to the NHL have been over $100 million US per year. The cost of production has been $30 million a year (that figure does not include the number of full time positions that must be maintained year round even though the hockey season is 9 months – add another $4 million). The cost of sales, promotion and advertising was another $40+ million a year (those huge Hockey Night in Canada billboards on the Gardiner aren't cheap).

So now the spin is has turned into, “Hey, take it easy with those government cuts as we were just hammered by losing the NHL!”, when in fact the loss of hockey saves money.

3) Spin:  The deal with Rogers to Broadcast Hockey on CBC is a good thing for Canadians:

Once more, Hubert Lacroix:

“A little bit about our deal with Rogers. CBC pays no rights costs for the broadcasting of hockey games. Rogers is bearing the sole risk around hockey revenues; (they sell the inventory and keep the revenue – the overall selling process is yet to be defined), while we continue to make Canada’s game available to all Canadians wherever they live.”

The Rogers negotiating team (Keith Pelley and Scott Moore) absolutely took the CBC to the cleaners with this deal. Of course they did, just look at the two CBC executives that were negotiating as they were hardly qualified to do the deal, 1) Neil McEneaney, a CPA, bright man but a true bean-counter who knows very, very little about the world of hockey and is not part of the extremely small NHL inner circle, and 2) Jeffrey Orridge, a trained lawyer and CBC newbie who was made head of Business for CBC Sports without ever having spent a minute in the broadcast industry and had never produced a second of TV in his life. This position was created due to politics by Kirsten Steward as she knew the head of sports would always be powerful with the board so she divided up the Executive Director, Sports position into two (business and production) to limit their power. When Orridge was hired, he had never done a single broadcast/production deal…and he was the CBC negotiator on the NHL deal? The CBC never had a chance.

Side note: Orridge's first rights deal at CBC was with the IOC for one Winter and one Summer Olympics. The CBC was the only entity bidding (both Bell and Rogers publicly stated they would not be bidding) and the IOC still managed to get three bids out of CBC. The CBC was bidding against itself. The IOC is still telling that story in the back rooms and laughing. Needless to say, the Olympics are a money-loser for CBC.

Rogers made out like a bandit as they get 350+ hours per year of CBC prime time to broadcast their NHL games for 4 years which gives them time to build Citytv into a national network. They keep 100% of the revenue, control all the content and they use CBC production facilities and staff at discounted rates (CBC is still paying for many of the staff for the 4 years).

So how did the Canadian taxpayer make out in the Rogers deal? CBC loses a revenue source of more than 1,400 hours of prime time ad inventory over the 4 years, pays for production staff and facilities and controls none of the content on Canada’s public broadcaster. Why was this just given away to a private corporation? To save jobs? Mr. Lacroix again:

“While this deal will result in job losses, the staffing impact would have been much greater had we lost hockey entirely, as CBC is still producing hockey.”

So CBC saved some union jobs and gave away the farm to do it. Many people wonder out loud if the CBC is even allowed to give over 1,400 hours of airtime away to a private corporation under their mandate – but then again, the management would just find a way to spin it as a good agreement for the CBC.

These are just a few of the ‘amazing but true’ situations at the CBC, but what is most amazing is that the vast majority of the media in Canada buy the spin. Why?

CBC Insider