CBC cuts 657 jobs, slashes $130 million from budget

TORONTO -- The CBC is slashing 657 full-time positions over two years and will no longer pursue broadcast rights to professional sports as it grapples with a budget shortfall it blamed on poor TV ratings, a softened advertising market and stiff competition from private rival networks.

The public broadcaster announced a swath of cuts Thursday that will shave $130 million from its 2014-15 budget while gutting CBC Sports and reducing local news coverage.

CBC president Hubert Lacroix detailed the austere measures at a town hall meeting that stressed the need for the public broadcaster "to reimagine itself" in a changing media landscape.

"There's no easy way to deliver news like this," Lacroix said in prepared remarks that were posted online moments after his private address.

"I know many of you are sad. I know there will be many questions. We will answer them straight up, both in our Q&A session today, in the meetings that will follow, and as things take shape over the coming days."

Heather Conway, executive vice-president of English Services, said the equivalent of 334 full-time jobs will come from her branch. It's expected to save roughly $82 million. Of that, about 115 full-time positions will come from CBC News and Centres.

The belt-tightening -- which will incur one-time severance costs of $33.5 million -- are geared to guiding the corporation "towards a smaller, more nimble and more open public broadcaster," Lacroix said.

But it will mean coverage of "fewer events and fewer sports" -- including less amateur sports -- and the cancellation of planned regional expansions. About 38 jobs will be lost from CBC Sports, roughly 40 per cent.

Nevertheless, Lacroix said CBC/Radio-Canada will maintain its news-gathering capabilities in the regions and remain committed to "signature events of national importance such as the Olympics." But only if they make money.

"We will only broadcast events that allow us to break even," he said in the statement.

When it comes to professional sports, CBC said it can no longer compete with private rivals that have specialty channels and multiple media platforms.

Last November, the CBC lost the rights to longtime staple "Hockey Night in Canada" to Rogers Media, which paid a staggering $5.2 billion for a 12-year broadcast deal with the NHL that will put games on channels including City, Sportsnet, Sportsnet ONE, Sportsnet 360 and FX Canada.

The CBC will continue to air "HNIC" under a four-year sub-licensing deal but will surrender editorial control -- and all advertising revenue -- to Rogers.

Meanwhile, CBC-TV programming also took a hit from private rivals, with CBC noting its prime-time TV schedule "performed poorly in attracting 25-54-year-old viewers," considered the most important demographic for advertisers.

Conway said the network is looking to new shows, including the Eugene Levy comedy "Schitt's Creek," to draw in younger viewers, as well as cheaper unscripted programs "that aren't necessarily the kinds of things that everybody else is doing."

"When you're going to take some risks with this stuff you can't blow your brains out with these hugely expensive shows that then have a high risk of either they succeed or they fail. But if they fail you've bet the farm," she said.

"So instead of that, we're going to look and say we can do two or three smart, distinctive, very Canadian, very unique unscripted shows -- things like ('Canada's Smartest Person') -- and that's a lot less money so we hope it's going to work."

In combination with the softened ad market, Lacroix said disappointing TV ratings represented a $47-million hit.

Meanwhile, "much lower-than-expected" ad revenues from Espace musique and CBC Radio 2 amount to a $13-million shortfall, nearly all of it impacting English Services.

Lacroix said other pressures come from fixed-cost increases of $42 million and a two-year salary inflation funding freeze by the federal government that amounts to $30 million.

The president of the Canadian Media Guild's CBC branch said the job cuts mark "the end of an era."

"CBC Sports is diminished, the public broadcaster is diminished and we're wondering now when Canadians are going to notice that their public broadcaster is not the same public broadcaster that used to exist a few years ago," said Marc-Philippe Laurin, noting this is the third major staff cut in five years.

In 2009, funding woes forced 800 positions to be eliminated, and in 2012, the introduction of a $115-million reduction in federal appropriation funds slashed 650 jobs.

"When will the bleeding stop? What can Canadians expect from their broadcaster? People create programs, you know, it's not a production line. You need people to create programs and if you don't have people where's the CBC going to go?" he asked.

Program cuts include a 10-minute late-night news program in northern Canada, weekend shows in Alberta that will become regional instead of local to specific cities, and a Sudbury-Thunder Bay rationalization in Ontario that will see Sudbury produce a show serving Thunder Bay, said Conway.

The watchdog group Friends of Canadian Broadcasting was wary of Conway's pursuit of younger viewers, and what it signalled for the future of CBC.

"That is code for we are behaving like a private broadcaster, we are delivering audiences to advertisers," said spokesman Ian Morrison, who blames the money woes on reduced funding from the federal government.

"That's not the thing that a public broadcaster that is concerned with delivering programming to citizens would say."

Morrison also expressed concern over scaled-back regional coverage, warning the move would centralize operations to the detriment of the rest of the country.

"This becomes more and more a 'Toronto Broadcasting Corporation' -- that's really what is happening because they're reducing their capacity to cover and the hours of local content that are live throughout the country," he said, blaming money woes on "a hostile" Conservative government that reduced the CBC's funding.

"That's very, very serious."

Lacroix said these were "tough decisions necessary to balance our current budget."

"As the media landscape changes, CBC/Radio-Canada will also need to reimagine itself in order to continue delivering on the mandate with which we were entrusted over 75 years ago," Lacroix added in a release Thursday.

Laurin said redundancy notices will start to be handed out at the end of the month, with the majority dispersed before the end of August.

The English Services cuts include about 100 regional jobs, approximately 62 positions from revenue and sales operations, 38 from operations/technology, 34 in communications and marketing, and 12 from radio/music, said Conway.