Hubert T. Lacroix : My speaking notes

Where we are

Well, here we are again. This is the third time I have to stand up before you in these circumstances, and, I have to tell you, I hate doing this. I imagine you feel the same way.

I told you in February about dark clouds. My job is to deal with, and communicate the facts, however unpleasant. My promise to you has always been, and continues to be, to give you the truth and to tell you what our circumstances are.

So how did we get here?

Many of you might be thinking: It’s all because of hockey. Well, no. It would be too easy to blame everything on the decision by the NHL to go exclusively with Rogers.

I will be the first one to admit that hockey was for us an integral part of our Corporation, anchored our CBC Television schedule and mobility offering, gave us clout in the advertising markets, and factored in when we allocated our financial resources between CBC, Radio-Canada and our non-media services.

And, the choice by the NHL of a single, exclusive broadcaster also affects the overall ad market, the balance of power between the conventional broadcasters and the sports specialty channels. The media environment in the francophone market is also affected with TVA now holding rights to the Saturday evening national games and play-offs.

So yes, the loss of the hockey contract is significant but is only one piece of a much more complicated puzzle. Let’s talk about that.

pressureFirst, television, where there’s an industry-wide softening of the television advertising market – down approximately 5% overall in the last year. This is common to all conventional broadcasters, and neither CBC nor Radio-Canada was spared. In addition, on the CBC side, since last summer, our prime time TV schedule performed poorly in attracting 25-54 year-old viewers, the most important demographic for advertisers. And yes, on top of that, we now have to plan the revenues coming from our prime-time CBC TV schedule without the pull effect of hockey and with Rogers/TVA now holding the NHL rights.

The combination of these factors represents about a $47M hit to our revenue.

Second, as you know, advertising sales on CBC Radio 2 and Espace musique are much weaker than expected. This is a major disappointment. We’re trying to fix this, but the initial projections won’t be met. We are not close. This represents a $13M shortfall, nearly all of it impacting English Services.

Third, we are facing other pressures from factors such as fixed cost increases of $42M and the $30M impact of a two-year salary inflation funding freeze by the federal government.

So, by the time we get to the bottom of this slide, you see what kind of a challenge we were facing just to balance our 2014/2015 budget.

And we can’t forget that these reductions come after we will have managed almost $390M in financial pressures since 2009 due to the 2008-2009 recession, DRAP and the actions we took to adjust our business strategies then, the elimination of the LPIF by the CRTC, salary funding freezes in 2010, 2011 and 2012, cost increases and reductions in our CMF funding.

Balancing our 2014/2015 budget wasn’t easy. Probably the most difficult budget to land since I came in on January 1, 2008. But this challenge made one thing very clear: we can’t be resizing the public broadcaster every two years. It’s not good. It’s not healthy. And it’s not the normal course of business.

So, there will be two parts to our announcement today.

First, we’ll tell you how we did balance the budget for this year.

Then, we’ll talk about more fundamental changes to come as we develop our next strategic plan and aim to achieve a sustainable financial model, which includes an ability to invest for the future.

To balance our budget this year, we’ve had to cut $130M from across the Corporation and, in addition, incur one-time severance payments of $33.5M. This means that we are eliminating the equivalent of 657 positions over the next two years.

We went at these cuts the same way we did the DRAP cuts. We looked at everything, systematically, and through the prism of our 2015 strategic plan and its priorities.

However, as we looked for solutions and tried to shield our Canadian programming in prime time, our commitment to the regions and our commitment to digital from these cuts, we realized that the numbers were too big and our margin for manoeuvring too thin from the cuts we’ve had to make since 2009.

We were not able to protect these priorities as much as we would have liked. And Canadians will notice.

And, in the context of these reductions, I wanted to tell you that there will be no voluntary retirement program. The incremental costs of such a program are too great. We simply can’t afford one. So, I wanted you to hear it immediately from me: there is no VRIP.

There’s no easy way to deliver news like this. 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.

I promise that those who will be affected will be treated with respect. We will work with your union leaders to implement these reductions fairly and in the spirit of our labour agreements. And support will be available for those who will be affected as well as those who will see our friends and colleagues go.

We’ll do it together, as we must. But that won’t make it easy, and I know that.

As we made our choices to balance 2014-2015, we had to accelerate the work already started for our next strategic plan that will carry us to 2020. We had to make sure that the measures announced today weren’t made in a vacuum, and weren’t jeopardizing future strategic choices by reacting to immediate needs.

So, we established a few rules to help us make these choices:

  • On the national level: TV prime time has to perform; talk programming has to resonate; national news continues to be the service of record; national websites continue to strive for impact and differentiation;
  • On the regional level: focus and commitment to the regions remain but an urgent need to modernize/rationalize the “how we deliver” in light of budget realities; any further expansion of our local services that was envisioned in Strategy 2015 is immediately stopped; and
  • On the digital level: still, a commitment to allocate 5% of media programming budgets, but resources can/should be focused on fewer high impact initiatives; and protect strategically important projects (like tou.tv).

But, by applying these rules, very tough and controversial choices needed to be made, and were made. Before turning to Heather and Louis for more specific details on how our media lines will be affected, let me tell you about three areas that are affected by these choices. This will also shed some light on what kind of a public broadcaster we will become.

First, sports. As of today, CBC and Radio-Canada are out of the business of competing with the privates for professional sports rights. It’s quite obvious that we can’t compete in this area anymore against private broadcasters that have specialty sports channels (often more than one) and multiple media platforms to monetize the broadcasting rights now expected to be paid.

The cuts will also mean fewer events and fewer sports being covered and the loss of 50 hours of original programming on CBC’s schedule in 2014-2015.

Our coverage of amateur sports will also be reduced. From now on, we will only consider broadcasting events that allow us to at least break even.

In light of these decisions, we are thus substantially reducing the size of our sports departments in both CBC and Radio-Canada

That being said – and this is very important – we remain committed to signature events of national significance like the Olympics. I am of the strong opinion that these are part of our mandate and that, eventually, if we don’t care about them, no other broadcaster will. We will simply have to find a way to go about them differently, as we did in Sochi.

Second, with the loss of hockey, the importance of self-generated revenue is even more important and more strategic. We need to regroup our sales force, and share our vision for a Canada-wide multiplatform offering with our business partners.

That’s why we plan to consolidate the revenue groups under one department head, and provide a more streamlined service to advertisers.

Next is regions, where we will maintain our presence and our news-gathering capabilities. This means that we’ll need to pool even more resources in the regions, and in some cases, substitute local programs with regional, network or syndicated ones.

I hope these examples give you a sense of where we’re going. It’s all about choices, about combining the strengths of CBC and Radio-Canada even more, and about rethinking our services.

I have to tell you that our challenges go far beyond balancing the 2014-2015 budget. When we look to 2015-2016 and beyond, we still have a lot of work to do to achieve financial sustainability.

I’ll tell you more about the process we’ve undertaken as part of our next strategic plan, the one that will take us to 2020. But first I want to invite Heather and Louis to tell you more about the impact the budget will have on our networks.

Heather in Toronto – the floor is yours.

[HEATHER CONWAY'S PRESENTATION]

[LOUIS LALANDE'S PRESENTATION]

Merci Louis, thank you Heather.

So, this is where our next strategic plan comes in.

As I said earlier, we’ve accelerated this process. We had originally envisioned completing our work in 2014, and announcing our conclusions in the fall or, at the latest, in the first quarter of 2015. Now, look for announcements at the beginning of the summer.

Over and above Canadian programming in prime time, the importance of regions and a strong digital/mobility presence, and the guiding principles I mentioned earlier, we’ve begun identifying priority areas. We’ll also need to find, within ourselves, the dollars to invest in them. This will mean exiting some lines of business, or completely re-inventing them. This will mean making significant changes about what we can afford to do with a much different revenue base.

The fundamental changes we will make must serve us for many years to come. So, we are reviewing everything, and asking ourselves big questions like:

  • Will we need this service in 2020 when you look at it through the prism of our mission/vision statements?
  • Which services will Canadians need from us in 2020?
  • What infrastructure is needed to meet these needs?
  • How can we transform some of our lowest performing services into new, more mobile, more digital offerings?
  • We need to find dollars to invest in our next priorities. They must come from within. How will we do that?
  • We just went through licence renewals that bring us to 2018, but that was in a completely different environment. Can we afford to do what we promised we would?
  • Many stakeholders look to us for investment and support. They’ll have to realize that there are now important limits to that support and that past commitments will not necessarily be a base for future commitments. So, how should our partnerships evolve?

At the same time we’re looking abroad. We’re having discussions with public broadcasters around the world. Most are struggling with the very same questions as we are.

In all these reflections, our goal is to build an economic model that avoids announcements of the kind we’re making today. The fact is we can’t shield ourselves from budget reductions from government decisions and fluctuations in the markets. But we can increase our ability to weather the storms.

In 2020, we need to be a leaner and more focused public media company, one that is more agile and can adjust as the media consumption habits of the audience change, while still fulfilling the spirit of the mandate that we were entrusted with more than 75 years ago.

Through Sochi we reached over 33 million Canadians.

We did it together, CBC and Radio-Canada working more closely than ever.

We did it differently, leading with our mobile offering.

We partnered.

And we [acted] quickly, met our revenue and [audience] targets and we wowed them all!

That’s the spirit in which we need to go forward.

And with that, we’re here to take your questions…

- Hubert T. Lacroix, President and CEO, CBC/Radio-Canada

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The Paralympic Games: An Energizing Experience

Arrived in Sochi safe and sound the night of March 3. We’ve got really nice rooms in the Para-Nordic athletes’ luxury village, where the temperatures are hitting Olympic heights.

The air is full of energy! Flags are flying on balconies all over the village and the athletes have started the traditional pin exchange.

The snow conditions are difficult, but the energy and smiles of the Canadian Paralympic Committee volunteers and team – who are treating us like royalty – more than make up for that.

Fifteen of the fifty-four Canadian athletes are on the para-Nordic ski team, which consists of cross-country skiing and the biathlon. That’s 11 skiers and 4 guides for those with impaired vision.

It’s a great honour for me to be among such exceptional athletes as Brian McKeever – who has won 11 Paralympic medals and is the only Canadian athlete to qualify for both the Paralympic Games and the Olympic Games at the same time – and Robbi Weldon – who won the gold medal in paracycling at the London Games.

The Games kicked off on Saturday, March 8, 2014 with the short-distance biathlon, attended by Russian president Vladimir Putin, who’s a real sports fan. We don’t get many spectators at the World Cup. The crowd generated an impressive amount of energy, inspiring Mark Arendz to take the silver.

I came in last, but was totally pumped by my first Paralympic experience, having earned 7/10, my best international shooting score ever. At my first World Cup in January 2012, I missed all my targets.

I’m especially pleased to be representing Canada in the biathlon. The sport is really big in Europe, but much less popular in Canada, partly because of the lack of facilities. Only 3 of 11 Canadian skiers qualified for both the biathlon and cross-country skiing.

There are three trials left to come: the mid-distance biathlon, cross-country sprint and mid-distance cross-country. The experience continues!

- Caroline Bisson, Para-Nordic athlete

Note: Since writing this post and at the time of publication, Brian McKeever won two gold medals at the Paralympic Games, Mark Arendz a bronze medal in biathlon 12.5 km and Caroline Bisson ranked 11th in biathlon 10 km and 14th in biathlon 6 km.

 

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A few thoughts on Les Rendez-vous de la francophonie 2014

In my opinion, we should be celebrating the Francophonie every day of the year. Les Rendez-vous de la francophonie is a fine example of what the public broadcaster can accomplish with Canada’s Francophones and Francophiles. Unifying Francophones across the country via programming that tells their stories and gives them a voice is an integral part of our mandate.

With that in mind, we’re again playing a role in Les Rendez-vous de la francophonie, a celebration of the French language and Francophone culture to be held this year from March 7 to 23.

For Radio-Canada, Les Rendez-vous is a golden opportunity to showcase various initiatives that aim to keep French-Canadian culture alive and kicking. Our involvement is also part of a larger programming strategy focused on proximity and regional roots – two key priorities in CBC/Radio-Canada’s five-year plan Everyone, Every way.

Here are a few examples:

  • In fall 2013, we began providing a news presence seven days a week right across the country. This multiplatform service was then further enhanced by such initiatives as regional radio renewal, and added coverage of regional realities in our network programming.
  • As part of our role in Les Rendez-vous de la francophonie, we’ve collaborated for several years now with the Association canadienne d’éducation de langue française on the Histoires collectives (in French only) project – an exciting group writing contest open to primary and secondary students across Canada.
  • The 14th annual Prix des lecteurs Radio-Canada (in French only) is a literary competition promoting French-language books published outside Quebec in the West, the Territories, Ontario and Atlantic Canada. The contest kicks off on March 20, 2014, live before a studio audience on our national radio show Plus on est de fous, plus on lit (in French only). Tune in on TV or the web for the April 30 grand finale on Pénélope McQuade (in French only).
  • We’ll also have special coverage and programming to honour the 5th World Acadian Congress. CMA 2014 will be held from August to 8 to 24 in three northwest New Brunswick counties, Quebec’s Témiscouata County, and the US state of Maine.

I’ve only included a few examples for you, but they clearly demonstrate Radio-Canada’s desire to contribute to the development and promotion of Francophone culture from sea to sea to sea, through programming that Francophones identify with and see themselves reflected in.

- Louis Lalande, Executive Vice-President, CBC/Radio-Canada French Services

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Raising the profile of Paralympic athletes – that’s the mission of sports reporter Jean St-Onge

Jean St-OngeAfter covering the event in Beijing for ICI Radio-Canada, Jean St-Onge is now gearing up for his second Paralympic Games – and he’s really looking forward to it. “The Beijing Paralympics were the greatest personal and professional experience of my life. It was fantastic!” This bodes well for someone who will be in Sochi interviewing athletes, providing daily wrap-ups of events, and working on our various Paralympic broadcasts.

The athletes competing in the upcoming Games each have a story to tell, often a sad and emotional one. I asked Jean whether he found it hard to detach himself when covering the events. “After you read their stories, it’s true that you can be deeply moved by them. But when the skiers are whizzing by you at 100 km/h, you forget about their handicap and focus solely on their athletic performance.”

In speaking with Jean, it’s obvious that his Paralympic experience has made an impression on him. “When I cover the Olympics, I’m assigned to a single sport. At the Paralympics, I’ll have the chance to talk to all of the athletes. Plus, they’re incredibly generous people. They realize that they’re the ones promoting their sports, which are becoming increasingly popular thanks to their efforts.”

Jean says there are a number of outstanding athletes to watch in Sochi. “First, there’s biathlete and para-Nordic skier Brian McKeever, who finished with three gold medals at the Vancouver Paralympic Games and had also qualified for the Olympics. What an achievement! Then you have para-Nordic skier Colette Bourgonje, who at age 52 is competing in her 10th Games, and Chris Williamson, one of the world’s most medalled athletes in para-alpine skiing, who’s still going strong at age 41.”

In short, some memorable moments are in store for the Sochi 2014 Paralympic Winter Games. It was a real pleasure talking to Jean St-Onge. We wish him, along with the entire Canadian team, all the best at the Games!

You can follow Jean St-Onge on Twitter: @jeanstonge.

Marie-Eve Desaulniers, Senior Advisor, Special Events and Projects, Corporate Communications

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Sochi 2014: Connecting with Canadians!

Over the past few weeks, my colleagues and I have been going out to meet Canadians. That’s right – what better excuse than the Olympics to start a conversation with our audiences? And we had no trouble finding tons of proud Canadians.

Our biggest discovery was that, regardless of age, people share the same passion for the Olympics. Anyone will tell you that when the Canadian women beat the United States at hockey, the entire country was behind them. What an intense moment – you could hear the cheers erupt everywhere!

We’ve been meeting with Canadians since late January. Although a bit shy at first, we soon realized that people were more than happy to talk to us about the Olympics and to take pictures to share their enthusiasm.

We got goose bumps when 250 students from an elementary school created a choreography that showcased the 15 Olympic events. Seeing them perform the dance together, in celebration of our athletes, was a truly moving experience!

We also went with Paralympian Jean Labonté to meet some young high-school athletes. They were hanging on Jean’s every word and didn’t hesitate to ask him every conceivable question. What a great inspiration for these sports stars of the future!

Meeting with seniors was also one of our favourite moments. A 94-year-old woman admitted to us that she watched the Olympics practically day and night, while a couple that had been married for 60 years recalled their fondest Olympic memories.

Everywhere we went, people talked about their highlights from Sochi – the medals and achievements, but most of all, the athletes’ stories that brought tears to their eyes.

For us, Sochi was about meeting great people, and hearing touching, inspiring stories. Today, we’re feeling a bit sad that it’s all over!

But Rio is just around the corner. Are you looking forward to it as much as we are?

Marie-Eve Desaulniers, Senior Advisor, Special Events and Projects, Corporate Communications

olympiques

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Over 33 million Canadians watched some of CBC/Radio-Canada’s coverage of Sochi 2014

More Canadians tuned in to CBC/Radio-Canada’s coverage of Sochi 2014 than any other Olympic Games in history. Since the start of the Games, 96% of Canadians – more than 33 million people – have viewed some Sochi 2014 content on one of CBC/Radio-Canada’s platforms, whether in French or English.

Our wide range of digital offerings resulted in the largest ever digital audience for Canadian coverage of an Olympic Games. More Canadians viewed digital Sochi 2014 content via their desktops alone than all of the Olympic content consumed across all digital platforms during Vancouver 2010. Canadians consumed almost twice the amount of online video content of Sochi 2014 than they did of Vancouver 2010. There were more than 2.5 million downloads of the CBC Olympic Games Mobile App on iOS and Android devices.

The final day, Sunday, February 23rd, was the most-watched day of Sochi 2014. Almost half the population tuned in to watch the Canadian men take the gold medal in Ice Hockey. One in three Canadians (almost 13 million) watched the Closing Ceremonies live. For more details see the CBC and Radio-Canada ratings releases.

- France Bélisle, Director, Public Engagement, Communications and Public Relations

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Over 17 million Canadians watched the Canada vs. USA Men’s Ice Hockey semi-final game

Even on a weekday, Canadians are committed to hockey. Over 17 million tuned in to some of CBC/Radio-Canada’s live coverage of the Canada vs. USA Men’s Ice Hockey semi-final.

Over 15 million Canadians tuned in to CBC’s live coverage. Of those 15 million viewers, about 3.8 million watched the game via online stream. An average 10 million viewers watched at least some part of the live coverage, with almost 8.6 million viewers during the final minutes of the game.

On ICI Radio-Canada Télé, almost a million viewers watched some of the live coverage, with peaks of over 1 million viewers. Over 1 million additional viewers watched the game online at ICI.Radio-Canada.ca.

An update on the men’s gold medal hockey game and Sunday’s closing ceremonies will follow.

- France Bélisle, Director, Public Engagement, Communications and Public Relations

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Women’s Gold Medal Ice Hockey Game sets new online viewing record

The Women’s Gold Medal Ice Hockey Game on February 20th set a new record for the highest online viewing audience ever for a CBC live event (preliminary average audience of more than 325,000 on desktop and mobile devices combined). The previous record had been set just the day before with the Canada/Latvia Men’s Ice Hockey game (average audience of more than 280,000 on CBC and SRC’s desktop and mobile devices combined)! The number of Canadians who have watched Olympic content online increased by more than three-quarters of a million yesterday, bringing the total to just under 7.6 million – 1 in 5 Canadians – since February 6th.

- France Bélisle, Director, Public Engagement, Communications and Public Relations

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Our Olympic Games coverage brings highest online viewing audience ever!

Many Canadians are watching our Olympic coverage online. The Canada/Latvia Men’s Ice Hockey game on February 19th posted the highest online viewing audience ever to a CBC/Radio-Canada live event. The average online viewing audience for the game was more than 280, 000 on CBC and Radio-Canada’s desktop and mobile devices combined. As of February 19th, CBC/Radio-Canada has streamed over 8.3 million hours of video on its website (excluding the Mobile App). In comparison, there were 7.2 million hours streamed during the entirety of the Vancouver 2010 Olympic Winter Games. The CBC Olympics App has also exceeded 2 million downloads on Apple and Android devices.

- France Bélisle, Director, Public Engagement, Communications and Public Relations

 

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Sochi: The Teamwork Olympics for Sylvain Archambault

In Sochi since November 16th, the Montreal-based technical producer was keen to answer my questions about his experience in Russia.

***

Sylvain ArchambaultThe first thing I wondered was why did he have to go to Sochi so early? The answer is simple: he was there to coordinate the arrival and setup of one tonne of equipment – 19 containers in all! – shipped from Canada by boat. It was a tall order for him and his team, who also have to provide technical support throughout the Games!

Sylvain Archambault explains that remote production has evolved considerably over the past few years. For our Sochi coverage, all production control rooms, news control rooms and editing suites are located in Toronto and Montreal. “In Sochi, we have three TV studios, 10 commentator talkback positions on event sites, and ingest rooms so that reporters can upload content to the editing suites back in Canada.”

Thanks to the power of technology, the CBC/Radio-Canada team can broadcast thousands of hours of live content across all platforms, including TV, radio, the web, and mobile apps. “It’s amazing. Technology allows us to reach the largest possible number of Canadians.”

Whether technological or otherwise, the team has to face a multitude of challenges. “We run into surprises every day – Russia is full of them!” But their biggest challenge is definitely working in a different time zone. “The hosting is often done live in Canadian time, which means we have to work through the night to ensure there are no technical glitches.”

Despite the stress and fatigue, it’s clear how happy Sylvain is to be working on the Games. “I’m extremely fortunate to be working with such high-calibre people from all departments, all across the country!” His team likes to joke that they form one big happy family. They are proud to have managed the feat of getting the two networks to work closely together. “I’m very impressed with the level of cooperation between CBC and Radio-Canada. It’s been flawless and very friendly.”

Of all the Olympic moments we’ve been treated to so far, I asked him what he’ll remember most from his experience. “What has struck me most, and made me proudest, is seeing all the various forms of journalism and production come together, in both official languages, to bring the Olympics home to Canadians.”

Marie-Eve Desaulniers, Senior Advisor, Special Events and Projects, Corporate Communications

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