Broadcasting - Secretary General Letter addressed to Matt Thompson (Corus Entertainment Inc. )
Ottawa, 19 October 2023
Reference: 2022-0946-0
BY EMAIL
Matt Thompson
VP and Associate General Counsel
Corus Entertainment Inc.
matt.thompson@corusent.com
RE: Part 1 application to amend conditions of service applicable to Corus Entertainment Inc. (“Corus”) English-language television group
Dear Matt Thompson,
This letter is in response to Corus’ 11 October 2023 Part 1 application seeking urgent amendments to certain conditions of service applicable to the company’s English-language television stations and discretionary services.
Corus has found itself in a unique financial situation. As set out in the application, the company’s debt ratio has increased to unacceptable levels owing to a 61 percent free cash flow decrease over the previous year, and rapidly declining profitability. The Commission notes Corus’ unique position as Canada’s largest non vertically integrated private broadcaster.
Corus has requested immediate consideration for timely, short term regulatory relief. The application requests that the Commission restore Programs of National Interest (“PNI”) expenditure requirements on Corus’ English-language stations and services to the 5 percent level established in Broadcasting Decision CRTC 2017-150 and extend the Canadian Programming Expenditure (“CPE”) under-expenditure repayment deadline applicable to its English-language television group beyond the end of the licence term. Corus is seeking the flexibility to continue to carry its 10% under-expenditure forward.
Given the urgency of the situation, the Commission determines that it is appropriate to give immediate consideration to Corus’ application on an exceptional basis.
In light of the unique circumstances and Corus’ stated commitment to continue contributing to the policy objectives of the Broadcasting Act, including through investments in Canadian journalism and through support for the Canadian creative sector, the Commission is of the preliminary view that it would be appropriate and in the best interest of the Canadian broadcasting system as a whole to amend the conditions of service that apply to Corus’ English-language television stations and discretionary services. This approach would recognize the urgency of the situation and provide short term flexibility. At the same time, the Commission continues to implement the modernized regulatory framework, which includes consideration of expenditures related to Canadian programming.
In accordance with subsection 9.1(4) of the Broadcasting Act, the Commission is hereby publishing the order that it proposes to make under subsection 9.1(1) regarding the above-noted conditions of service. The proposed order is appended to this letter. This letter and Corus’ application will be added to the record of the proceeding for application 2022-0946-0.
Interested parties will have until 3 November 2023 to provide interventions with respect to the proposed order. The applicant will have until 8 November 2023 to file its replies to the Commission and to intervening parties.
Yours sincerely,
Marc Morin
Secretary General
Appendix: Proposed amendment to conditions of service that apply to Corus Entertainment Inc.’s English-language television group
Pursuant to subsection 9.1(4) of the Broadcasting Act, the Commission invites interested parties to comment on the following draft order:
By order pursuant to subsection 9.1(1) of the Broadcasting Act, the Commission makes the following amendments to the conditions of service that apply to Corus Entertainment Inc.’s English-language television group.
Replacing the condition of service found in Broadcasting Decision CRTC 2017-150, Appendix 2, condition of service #7, and Appendix 3, condition of service #7, as amended by Appendix to Broadcasting Decision CRTC 2018-335, with the following:
In accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010, the licensee shall in each broadcast year devote to the acquisition of or investment in programs of national interest, as defined in paragraphs 71 to 73 of that regulatory policy, a minimum of 5% of the previous year’s gross revenues of the undertaking.
Replacing the condition of service found in Broadcasting Decision CRTC 2017-150, Appendix 2, condition of service #12(a), and Appendix 3, condition of service #12(a), as amended by Broadcasting Decision CRTC 2020-220, with the following:
In each broadcast year of the licence term, the licensee, in concert with the other undertakings that form the Corus Group, may expend an amount on Canadian programming and/or on programs of national interest that is up to 10% less than the minimum required expenditure for that year calculated in accordance with conditions 11(a) and 11(b), respectively; in such case, the licensee shall ensure that the undertakings that form the Corus Group expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year’s under-expenditure.
- Date modified: