Tension mounts in TV fund dispute

CTF's future in question as industry and cable providers criticize proposed CRTC reforms

GRANT ROBERTSON - MEDIA REPORTER
theglobeandmail.com

Some of the biggest players in Canadian television are accusing the federal broadcast regulator of pandering to the cable and satellite industry with new policies they fear will result in a flood of second-rate U.S. actors coming north.

The debate hangs over a proposed revamp of the $265-million Canadian Television Fund, which will have its future decided in the next few months.

The latest concerns come after industry groups were required to voice their opinions on the changes. Several of those positions will be made public this week.

Already, a stalemate appears to have developed, where several key players are opposing recommendations put forward to the Canadian Radio-television and Telecommunications Commission, aimed at reaching a consensus to save the fund.

Jim Shaw, chief executive officer of Shaw Communications Inc., the CTF's largest single contributor, has questioned whether the fund can continue operation, despite the efforts to fix it, since no sides can agree on a strategy to make it work.

The CTF, which provides money to help make domestic TV series such as Trailer Park Boys, Da Vinci's Inquest and Little Mosque on the Prairie, faces several key modifications, including one that could change the requirements for a show to be deemed Canadian under federal rules.

The proposal comes after Shaw Communications and Vidéotron Ltée, the cable arm of Quebecor Inc., began raising questions about the fund in January, criticizing how the millions of dollars contributed by the industry are being spent.

Cable and satellite carriers are required to pay $145-million, or 55 per cent, of the fund's annual budget through money collected from their customers, while the government foots the remainder, about $120-million.

Shaw threatened to halt payments until changes were made. In particular, Mr. Shaw said he wants the money put toward programming that has a better chance at being successful in the ratings, suggesting recently that the fund mostly props up "shows nobody watches."

An independent report done for the Canadian Radio-television and Telecommunications Commission last month proposed to push the fund toward a more market-oriented approach, indicating "audience success must be the primary criteria for continued funding."

However, in a move that has shocked many in the production industry, the report calls for Canadian content requirements to be lessened in several key areas. Under existing rules, domestic shows must score 10 points on a checklist of items in order to be eligible for CTF money. Two points are allocated for using a Canadian director or scriptwriter, and one point is given for other roles such as lead actor, second-lead actor, director of photography, art director and editor.

The report recommends dropping the requirement to eight points. The deadline for responses to the report was Friday and many of the industry's biggest players will make their stances public this week.

But the Directors Guild of Canada is not waiting to voice its criticism, arguing the new point system will freeze out Canadian actors and directors, since some productions think adding a well-known U.S. name will result in higher ratings.

"We do not know why the commission has proposed this," said Monique Lafontaine, general counsel and director of regulatory affairs for the organization that represents Canadian TV directors.

"The production budgets for Canadian TV shows won't be able to afford the top Hollywood actors. So it's not going to be that type of actor. They'll get B-level American actors."

The guild argues millions of dollars collected from Canadian taxpayers and through monthly cable and satellite bills would flow to non-Canadians, with no guarantee that the ratings will improve.

"In television, stars do not generally drive the shows. The shows create stars, and we've seen that time and again," Ms. Lafontaine said in an interview. "There will be a loss of either a writer, director or actor. It's not a potential loss. There will be a loss of one of the three on every production."

The CTF has become a sore spot within the industry in recent months as the battle between the cable and production industries is waged. Mr. Shaw gives credit to some of the shows the fund helped produce that have turned into hits, but suggests Canadians would be at a loss to recognize the majority of the programs it has made.

Hits such as Trailer Park Boys and Little Mosque get a portion of their budgets from the CTF, receiving roughly $2.8-million and $2.5-million, respectively, last year.

Mr. Shaw said he wants more detail on how spending decisions are made at the CTF and has questioned why the fund doesn't take an equity stake in the shows it helps produce, so that money can be recovered when the programs are sold internationally.

An official with the CRTC said the regulator plans to use the responses that have been submitted by dozens of industry groups and individuals to devise a final report on the future of the fund, which will be determined in the coming months.