BARGAINING IN BAD FAITH

Local news cuts at Bell come after it was granted $40M in regulatory relief: St-Onge

Mickey Djuric, The Canadian Press

As Bell Media blamed regulators and policymakers for its decision to announce a fresh round of layoffs Thursday, federal and provincial politicians accused the company of unnecessarily killing off local journalism.

Heritage Minister Pascale St-Onge decried the company for breaking its promise to invest in news after it was granted more than $40 million in annual regulatory relief.

That's the same amount the company said its news division, which includes CTV News and BNN Bloomberg, is losing annually.

Facing $40 million in annual operating losses, Bell Media's parent company, BCE Inc., announced it was cutting 4,800 jobs. BCE Inc. has an operating revenue totaling $6.7 billion, up from $6.44 billion a year earlier.

"They are not going bankrupt. They're still making billions of dollars. They're still a very profitable company," St-Onge said Thursday on Parliament Hill.

"And they still have the capacity and the means to hold their end of the bargain, which is to deliver news reports."

St-Onge said the government has worked to help the news industry, and at some point companies have to chip in, too.

The Liberals' update to broadcasting law, the Online Streaming Act, came into effect last April. It abolished certain licensing fees, which St-Onge said will save the company some $40 million a year.

Bell Media is also expected to receive money because of the Liberals' Online News Act, which came into effect late last year.

Broadcasters are expected to receive $30 million through a side deal the government struck with Google.

It agreed to pay news outlets $100 million a year to avoid being regulated under the new law, which requires tech giants to compensate news producers for content that is shared on their platforms, and from which they financially benefit.

Still, Bell Media is blaming its cuts on the federal government, saying Ottawa took too long to provide relief for media companies.

It also blames the Canadian Radio-television Commission, saying the regulator is too slow to react to a "crisis that is immediate."

The CRTC is expected to release final regulations aimed at helping the news industry in the coming months. Until then, St-Onge said, "we need everybody to hold strong."

Labour Minister Seamus O'Regan, a former journalist, said Thursday that the layoffs are "atrocious" and it's "hard seeing journalists being treated as rounding errors in what I think are healthy profit margins."

And British Columbia Premier David Eby said Bell Media has "overseen the 'en-crap-ification' of local news."

He said the layoffs — along with the sale of 45 of the company's 113 regional radio stations — is "catastrophic."

"Bell and corporations like Bell have overseen the assembly of local media assets that are treasures to local communities. They bought them up. Like corporate vampires, they sucked the life out of them, laying off journalists," Eby said Thursday.

The federal NDP said this should serve as a wake-up call for Ottawa and its relationship with corporations.

"The federal government needs to start showing leadership, first off, and any funding that is going to Bell or any other corporation needs to come with the key guarantees in terms of jobs and maintaining professional journalism," NDP House leader Peter Julian said.

When St-Onge was pressed on the cuts by the Bloc Québécois during question period, she stated in French that the Liberal government would not be giving any more money to billionaire companies.

Conservative Leader Pierre Poilievre responded to the cuts on Thursday by placing blame on Prime Minister Justin Trudeau.

He said high taxes, burdensome red tape and an uncompetitive business environment "is driving our jobs and our money out of the country to foreign nations that are prospering at our expense."

This report by The Canadian Press was first published Feb. 8, 2024.

BCE slashes 9% of workforce, puts blame at the feet of regulators and policymakers

Sammy Hudes, The Canadian Press

The parent company of Bell Canada announced it is slashing nine per cent of its workforce and could further scale back network spending as it remains at loggerheads with the CRTC over what it calls "predetermined" regulatory direction.

The cuts, which affect about 4,800 jobs including 750 contractors, were announced to employees Thursday morning in an open letter by chief executive Mirko Bibic. The company also reported its fourth-quarter profit fell compared with a year ago, but raised its quarterly dividend.

BCE said it earned net income attributable to common shareholders of $382 million or 42 cents per diluted share in its latest quarter compared with a profit of $528 million or 58 cents per diluted share a year earlier.

Operating revenue totalled $6.47 billion, up from $6.44 billion a year earlier. On an adjusted basis, BCE says it earned 76 cents per share in its fourth quarter of 2023, up from 71 cents per share in the last three months of 2022.

On Thursday, the company also announced plans to sell 45 of its 103 regional radio stations and close 107 The Source stores. It said the restructuring is expected to save Bell around $150 million to $200 million in 2024 and $250 million on an annual basis.

"Restructuring the business is never an easy decision, but it's what we need to do to simplify our organization and accelerate our transformation," Bibic told analysts on the company's earnings call.

Bibic said in his letter that Bell is moving away "from highly regulated parts of the business to new growth areas" while aligning costs to revenue potential in each business segment.

"We know these decisions are hardest on those leaving Bell."

The changes came as BCE said it would now pay a quarterly dividend of 99.75 cents per common share, up from 96.75 cents per share.

The job cuts follow the elimination of 1,300 positions last June, when Bell announced a restructuring and pinned the blame on untenable regulatory conditions.

Dwayne Winseck, a professor at Carleton University's School of Journalism and Communication, said Bell's move is likely an attempt to try and sway the telecommunications regulator.

"You've got new leadership at the CRTC that are basically sending some tough signals," he said.

"I think Bell's engaged in a war right now with the CRTC to put them in line."

Bell chief legal and regulatory officer Robert Malcolmson acknowledged in an interview with The Canadian Press that the 6,000-plus jobs cut since last year was "a big number." 

"It's really the current regulatory and public policy environment that's causing profound structural change and that we have to mitigate through the measures we're announcing today," he said.

"We have to make tough decisions sometimes and hopefully these decisions will cause government and regulators to notice. Hopefully we can have a rational conversation about pivoting to public policy that supports investment and employment."

The latest job losses will be felt across the media and telecom company's various divisions, including some vacant positions that will go unfilled.

The company said fewer than 10 per cent of the total job cuts were at Bell Media specifically.

Some employees have already been notified or will be informed throughout the day Thursday of having been laid off. The balance will be told by the spring, the company said.

The move also comes ahead of hearings next week by the federal telecom regulator as part of a review into the rates smaller internet competitors pay the major carriers for network access.

"What Bell is doing, it's just saying, 'If you don't think we will sacrifice lambs on the way to get what we want on the regulatory front, here we go,'" said Winseck.

"This is the first killing on the platter." 

The CRTC announced last November it would temporarily require large telephone companies, namely Bell and Telus Corp., to provide competitors with access to their fibre-to-the-home networks in Ontario and Quebec within six months. (The rule doesn't apply to Canada's other major carrier, Rogers Communications Inc., which uses a cable network.)

The decision was meant to stimulate competition for internet services, as the CRTC said at the time its review could potentially make that direction permanent and apply it to other provinces.

Bell responded by announcing a plan to reduce its network investment by $1.1 billion by 2025 — "and counting," Malcolmson noted — including a minimum reduction of $500 million this year.

"We, needless to say, take a dim view of the decision because ... it reduces any incentive we have to continue building out our fibre network," he said. 

At the time, Bell also filed documents with the Federal Court of Appeal requesting permission to appeal the CRTC's temporary ruling, and for a stay of the decision pending the outcome of the court process. Last week, it asked the federal cabinet to review the regulatory decision.

Malcolmson said Bell would wait and see what the CRTC decides following the hearing before making further decisions on future network investment, but that "it seems like the outcome is predetermined."

Asked if that meant Bell was preparing to announce further scalebacks, he said "that's up to the CRTC and ultimately the government."

"We hope not. We're in the business of building networks," said Malcolmson. "That's what we want to do. That's what our shareholders invest in us for."

In a statement, the CRTC said it was concerned about the job losses.

"The CRTC does not determine how private companies allocate their profits," said spokeswoman Mirabella Salem.

"The CRTC is an independent, quasi-judicial tribunal that regulates the broadcasting and telecommunications industries in the public interest."

Malcolmson said before last November, Bell planned to reach nine million locations through its fibre network build by the end of 2025, which has been scaled back to 8.3 million.

"We can't justify investing that capital when we're just building a network for our competitors to resell," he said.

Bibic hinted at further cost reductions in the years to come if the company feels it has to stay ahead of regulatory decisions it finds unfavourable.

"The short answer is there could be more to come depending on where this goes," he told analysts.

"The question we have to ask ourselves is why continue to invest at the pace that we did in 2020, 2021, 2022 and 2023?"

This report by The Canadian Press was first published Feb. 8, 2024.

BNN Bloomberg is owned by Bell Media, which is a division of BCE.

Bell ends some CTV newscasts, sells radio stations in media shakeup amid layoffs

Sammy Hudes, The Canadian Press

Bell Media is ending multiple television newscasts and making other programming cuts after its parent company announced widespread layoffs and the sale of 45 of its 103 regional radio stations.

In an internal memo to Bell Media employees on Thursday, it said news stations such as CTV and BNN Bloomberg would be affected immediately.

The radio stations being sold are in British Columbia, Ontario, Quebec and Atlantic Canada.

The memo, signed by Dave Daigle, vice-president of local TV, radio and Bell Media Studios, and Richard Gray, vice-president of news at Bell Media, said weekday noon newscasts at all CTV stations except Toronto would end. It is also scrapping its 6 p.m. and 11 p.m. newscasts on weekends at all CTV and CTV2 stations except Toronto, Montreal and Ottawa.

Daigle and Gray said "multi-skilled journalists" would replace news correspondent and technician teams reporting to CTV National News in Alberta, Manitoba, Quebec and Atlantic Canada, while other correspondent changes would be made in Ottawa.

Earlier in the day, Bell Media's parent company BCE Inc. announced it was cutting nine per cent of its workforce.

The company, in an open letter signed by chief executive Mirko Bibic, said 4,800 jobs "at all levels of the company" would be cut. Fewer than 10 per cent of the total job cuts are at Bell Media specifically.

Some employees have already been notified or were to be informed Thursday of being laid off, while the balance will be told by the spring. Bibic said the company will use vacancies and natural attrition to minimize layoffs as much as possible. 

Unifor said 800 members it represents were laid off in the Bell cuts, around 100 of which from the media sector and the balance from the telecom sector.

"Executives and shareholders are doing just fine while our members are being thrown out of work, including once again in the media," said Unifor national president Lana Payne.

"Our union does not accept the use of government policy changes as a smokescreen to justify the company’s actions."

Bell is also ending evening programs The Debate, This Hour and Top 3 Tonight on CTV News Channel, which will be replaced by a four-hour news broadcast on weeknights beginning at 6 p.m.

At BNN Bloomberg, weekday daytime programming is "being streamlined" to reduce the number of separate broadcasts. 

Daigle and Gray also said W5 will shift from a standalone documentary series to a "multi-platform investigative reporting unit" featured on CTV National News, CTVNews.ca and other news platforms.

The job cuts mark the second major layoff at the media and telecommunications giant since last spring, when six per cent of Bell Media jobs were eliminated and nine radio stations were either shuttered or sold.

In an emailed statement, a spokesperson for Corus Entertainment confirmed the company has also made changes this week across several stations, albeit small changes. They said the company has no plans to reduce its current program offerings. 

In a separate internal memo, Bell Media president Sean Cohan said the company intends to divest 45 radio stations to seven buyers: Vista Radio, Whiteoaks, Durham Radio, My Broadcasting Corp., ZoomerMedia, Arsenal Media and Maritime Broadcasting. The sales are subject to CRTC approval and other closing conditions.

"That's a significant divestiture and it's because it's not a viable business anymore," said Bell chief legal and regulatory officer Robert Malcolmson in an interview with The Canadian Press.

"We will continue to operate ones that are viable, but this is a business that is going in the wrong direction."

While the sales signal Bell's recent struggles, new ownership could be beneficial for the divested stations, said Dwayne Winseck, a professor at Carleton University's School of Journalism and Communication.

He pointed out the buyers are mostly "well-established, smaller, regional and local broadcasting stations."

"This might be OK. It could be not a bad thing," said Winseck.

"They're more connected to the communities. They don't have the punishing demand of the financial markets of Bay Street that Bell has."

Malcolmson said Bell Media is in the midst of a "digital transformation" for both entertainment and news.

But whether or not prioritizing digital growth is viable for the company in terms of generating profit remains to be determined.

"We're investing in it; we'll see," said Malcolmson. "Without some form of regulatory supports, it's tough."

He blamed the federal government for taking too long to provide relief for media companies as well as the CRTC for being too slow to react to a "crisis that is immediate."

That extends to two pieces of legislation intended to help Canada's struggling media sector: Bill C-18, also known as the Online News Act, meant to force tech giants to compensate Canadian news outlets for their content, and Bill C-11, which updates the Broadcasting Act to require digital platforms such as Netflix, YouTube and TikTok to contribute and promote Canadian content.

Ottawa remains in a standoff with Facebook parent company Meta over C-18, with the company continuing to block news links on its platforms. Meanwhile, the federal government capped the amount of money broadcast media can get from Google's $100 million annual payments at $30 million, with the remainder to go to print and digital news outlets.

"In practice, it's not going to do anything. It's underwhelming to say the least," said Malcolmson.

The federal government argues it has done a lot to help the news industry and accused the company of breaking its promise to invest in news after being granted more than $40 million in annual regulatory relief. 

"They are not going bankrupt. They’re still making billions of dollars," Heritage Minister Pascale St-Onge said on Parliament Hill on Thursday. 

"They’re still a very profitable company and they still have the capacity and the means to hold their end of the bargain, which is to deliver news reports." 

Thursday's job losses at Bell Media are also directly tied to regulator direction on Bill C-11, Malcolmson said.

The CRTC held a hearing late last year exploring whether streaming services should be asked to make an initial contribution to the Canadian content system to help level the playing field with local companies. The commission hopes to implement new rules in late 2024.

But the Bell executive said the company needs immediate relief, which could come from a fund it has proposed that would see streamers subsidize local or national news.

"We hope they do that but we can't wait two years for that to happen, so then you see actions like this today," he said.

Bell has fought other regulatory decisions over the past year that it says makes things harder for its struggling broadcast division.

That includes an October application to the Federal Court of Appeal seeking to overturn a CRTC decision that renewed its broadcast licences for three more years. It argued that decision was made without a public hearing and could result in the regulator prejudging its requests last June to waive local news and Canadian programming requirements for its television stations.

Bell Media's advertising revenues declined by $140 million in 2023 compared with the year before, and the company's news division is seeing more than $40 million in annual operating losses, Bibic stated in his letter.

On Thursday, Bell said it could also further scale back network investments on its telecom side as it remains at odds with the CRTC over what it calls "predetermined" regulatory direction.

Asked about the company's image in light of continued cuts, Malcolmson noted the size of Bell's executive team has been reduced in recent years and executive salaries remain frozen.

"We have a duty both to our shareholders and to our employees to make sure we manage the business in a rational way," he said.

List of divested Bell Media radio stations (New owner)

• CHOR, Summerland, B.C. (Vista Radio)
• CJAT, Trail, B.C. (Vista Radio)
• CKKC, Nelson, B.C. (Vista Radio)
• CKGR, Golden, B.C. (Vista Radio)
• CKXR, Salmon Arm, B.C. (Vista Radio)
• CKCR, Revelstoke, B.C. (Vista Radio)
• CJMG, Penticton, B.C. (Vista Radio)
• CKOR, Penticton, B.C. (Vista Radio)
• CJOR, Osoyoos, B.C. (Vista Radio)
• CICF, Vernon, B.C. (Vista Radio)
• CHSU, Kelowna, B.C. (Vista Radio)
• CILK, Kelowna, B.C. (Vista Radio)
• CKFR, Kelowna, B.C. (Vista Radio)
• CKNL, Fort St. John, B.C. (Vista Radio)
• CHRX, Fort St. John, B.C. (Vista Radio)
• CJDC, Dawson Creek, B.C. (Vista Radio)
• CKRX, Fort Nelson, B.C. (Vista Radio)
• CFTK, Terrace, B.C. (Vista Radio)
• CJFW, Terrace, B.C. (Vista Radio)
• CHTK, Prince Rupert, B.C. (Vista Radio)
• CKTK, Kitimat, B.C. (Vista Radio)
• CKLH, Hamilton, Ont. (Whiteoaks)
• CHRE, St. Catharines, Ont. (Whiteoaks)
• CHTZ, St. Catharines, Ont. (Whiteoaks)
• CKTB, St. Catharines, Ont. (Whiteoaks)
• CKLY, Lindsay, Ont. (Durham Radio)
• CKPT, Peterborough, Ont. (Durham Radio)
• CKQM, Peterborough, Ont. (Durham Radio)
• CFJR, Brockville, Ont. (My Broadcasting Corporation)
• CJPT, Brockville, Ont. (My Broadcasting Corporation)
• CFLY, Kingston, Ont. (My Broadcasting Corporation)
• CKLC, Kingston, Ont. (My Broadcasting Corporation)
• CJOS, Owen Sound, Ont. (ZoomerMedia)
• CHRD, Drummondville, Que. (Arsenal Media)
• CJDM, Drummondville, Que. (Arsenal Media)
• CFEI, St-Hyacinthe, Que. (Arsenal Media)
• CFZZ, St-Jean-Sur-Richelieu, Que. (Arsenal Media)
• CIKI, Rimouski, Que. (Arsenal Media)
• CJOI, Rimouski, Que. (Arsenal Media)
• CFVM, Amqui, Que. (Arsenal Media)
• CIKX, Grand Falls, N.B. (Maritime Broadcasting)
• CJCJ, Woodstock, N.B. (Maritime Broadcasting)
• CKBC, Bathurst, N.B. (Maritime Broadcasting)
• CKTO, Truro, N.S. (Maritime Broadcasting)
• CKTY, Truro, N.S. (Maritime Broadcasting)

— With a file from Mickey Djuric in Ottawa.

This report by The Canadian Press was first published Feb. 8, 2024.

BNN Bloomberg is owned by Bell Media, which is a division of BCE.