Ian Morrison gets it wrong on SunTV

Ian Morrison is the spokesperson for the “media watchdog” group Friends of Canadian Broadcasting, a group I and many other journalists often turn to for their reaction to news about the CBC or other broadcasters. Because of their influence and long interest in issues about Canadian broadcasting, I think it important to point out the whopper of a mistake Morrison makes in today's Hill Times in a piece titled “Prime Minister shouldn't hand out broadcasting licenses like Senate seats“. He's talking about the application before the CRTC by SunTV and – full disclosure here — As I'm the bureau chief in Ottawa for Sun Media, there's a very good chance you'll see me a lot on SunTV.

In this piece Morrison writes:

'Must-carry' status is key to Sun TV News application. Almost nine milllion English-speaking households subscribe to cable or satellite service in Canada. In its application, SunTV news is asking the CRTC to require these systems to carry its signal for three years, and to charge each subscriber 25 cents per month for SunTV News, whether the subscriber wants it or not.

Twenty-five cents may not sound like a lot of money, but over three years, it would deliver $80-million into [Quebecor CEO and majority shareholder Pierre-Karl] Péladeau's pocket — before he sells a single ad.

Morrison should have read the application and supporting documents available at the the CRTC's website. It is true that SunTV is asking TV distributors to carry the channel for three years but he's dead wrong that SunTV is asking that anyone be forced to pay for it. I'll quote from what SunTV tells the CRTC in Appendix I of its Supplementary Brief supporting its application: “We do not ask for mandatory basic distribution, but only to be available on cable and satellite distribution undertakings allowing the public to have access to Sun TV News without any obligation to choose it.”

So no, it's not true, as Morrison says that you'll get SunTV “whether the subscriber wants it or not”. Only subscribers that want it will get it.

Second, Morrison claims if SunTV gets what it is asking for, that would be the same as essentially giving Quebecor $80 million. Wrong again. Again, looking at the supporting documents SunTV provided to the CRTC, we find the financial projections for SunTV for the next seven years. They are based on the premise that SunTV will have to go out and sell itself to subscribers, to convince them to sign up with the service. The financial statements show that this will not happen overnight. Total subscriber revenue in the first year of operation is estimated to be $4.6 million, climbing to $12.4 million by year four. Meanwhile, the same financial statements also show that SunTV will be a money-losing operation during those first four years. If everything goes according to the estimates, provided by SunTV to the CRTC, SunTV will finish its first four years of operation with an accumulated deficit of nearly $20 million. In other words, Quebecor is set to lose $20 million over the first four years of SunTV's operation.

The financial statements provide seven years worth of projections on revenues and expenses. In years, five, six and seven, SunTV's backers believe it will be generating an operating profit by then and, over those three years, will have a combined operating profit of $6.5 million. So even after seven years of operations, SunTV's shareholders will still have an accumulated deficit of $13.5 milion. Far from putting “$80-million” into the pockets of anyone, it will be taking $13.5 million out of the pockets of Quebecor's shareholders.

I'd encourage Morrison or anyone else interested in this application to read the documents posted at the CRTC's Web site that have been filed in connection with our application. You can get them right here. Argue all you want about the application but please get the facts right.