Seeing our way through tough financial times

Many of you will know that, as early as September, we forecasted a worsening of the economic climate and, in fact, Richard Stursberg went as far as informing all his staff of actions taken to respond. On October 31, Richard further announced to his staff his assessment of the effect of the widening economic crisis on English Services and the measures to redress a $45 million budget shortfall. The impact on advertising revenues on the French side of the house was slower to take hold and has to date been less severe, but Sylvain Lafrance and his team have also been taking appropriate action to adjust. In addition, we have been closely monitoring a number of external events including a meeting of Crown CEOs with the Treasury Board this past Monday, and the Speech from the Throne on Wednesday.

This activity culminated in the Board meetings this Tuesday and Wednesday. I wanted to give you a consolidated picture of how the ever-expanding economic crisis relates to CBC/Radio-Canada. I’ll follow up on a few other noteworthy items from the Board next week and provide greater detail on the measures included here, but I didn’t feel this could wait.

I’m sure by now you all have a sense of the global financial context. A broad consensus on the direction of change in global finance emerged from the recent G-20 summit in Washington this week. While this country has avoided the worst, the Bank of Canada has suggested that the Canadian economy is deteriorating faster than previously thought. And the economy is clearly top of mind for Canadians: the global economic crisis, and how the Canadian government plans to deal with the continuing slump, was the centrepiece of the Conservatives’ Speech from the Throne.

Our industry and CBC/Radio-Canada
So, what does this mean for CBC/Radio-Canada? No doubt, our industry is feeling the pain. Ad spending is dwindling; in fact, some of the traditionally biggest ad spenders are on the verge of corporate meltdowns, GM for example. And that’s taking its toll. CBS not long ago posted a US$12.5-billion quarterly loss. And the news is no better at home. CanWest, mired in debt, just cut 560 jobs – about five per cent of its workforce – in light of a write-down of more than a billion dollars of Global Television. CTV is also taking steps to ward off the worst, having implemented a hiring freeze in its television operations, while at the same time predicting the likelihood of layoffs.

There is no question: CBC/Radio-Canada is not immune, and we will need to adapt to changing conditions and circumstances to see our way through these tough financial times. Our revenue streams are taking a hit; we are currently projecting a deficit in our television operations, though not to the extent of our competitors, and our levels of federal funding are never guaranteed.

Cost reduction measures
Having said that, we need to continue to take deliberate concrete steps to manage our overall budget scenario effectively. We need to keep one eye on the storm and one eye on the course ahead, and ensure that we weather one and keep moving towards the other.

First, a few words on how we’re approaching this. You, our people, are the foundation of our success – we recognize that – and we don’t want to chip away at that foundation if there’s any way to avoid it. Where others are contemplating and predicting layoffs, we are looking to put in place and push forward with solutions that won’t involve cutting jobs. Changing circumstances might over time challenge us in this regard – it’s impossible to predict what exactly is to come – but I want you to know that we’re putting our people first in all of this, and will continue to do so.
So, what are we going to do? First off, we are going to conduct a full-scale review of our planned capital expenditures to see if there are things we can reasonably defer or cancel. Also, effective today, we are putting in place strict hiring controls in addition to those that already exist in some parts of the organization: all new hires will be reviewed case-by-case at the vice-presidential level. We are also targeting a significant reduction in travel, hospitality and duty entertainment and an additional reduction in overtime expenditures, which will also be managed at the vice-presidential level.

Unfortunately that means spending on holiday festivities as well. We have a lot to celebrate this year. We are going to have to do it in our meeting rooms and boardrooms. Do take the time to wish each other well; just don’t take the budget to do it.

In other words, if it’s discretionary, it’s gone. If it’s anything less than a bona fide requirement, it’s gone. If it’s not absolutely strategic, it’s gone. Expect to hear more from your management teams shortly on what’s in and what’s out, and guidelines to that effect.

Getting you involved in reducing costs
What’s above will help to keep us on track. But it can’t stop there. I, and my SET colleagues, want you to get involved.

You know the details of your particular operations best. Look around; think hard about what it is you do. If you have an idea as to how your unit or department could cut costs over the coming year, pass that idea on to your director.

I expect them to consider its potential and feasibility. If they’re not sure, because the idea doesn’t fall within their particular area of expertise, I expect them to share it with someone who can assess it. And if the idea is viable, I expect to see it implemented immediately. If that’s the case, you will be recognized for your contribution.

Working together, acting as one
We are all in this together. And while I expect the Board and SET to do their part, I’d also like to see the same from all of you. If one or more parts of the company are facing daunting financial pressures (in this case TV), then we all have a responsibility to help solve the problem. This is a fine example of what I mean when I talk about one vision for one CBC/Radio-Canada, and locking arms. Now’s the time!

While times are tough, we should not lose sight of the fact that we have a strong organization, and an incredibly meaningful brand to which Canadians relate. If we are financially prudent and stick to the programming strategies we currently have in place – which are today showing tremendous progress and results with audiences – I’m confident we can see our way through this.

In fact, if we stay true to our values, work together to push for results, and serve Canadians as well as we know we can, I believe that we might even emerge from these times a much stronger and better company, with an even more meaningful and relevant brand.

That’s our challenge, so let’s get to it!

Cheers.

Hubert
November 21, 2008

6 comments:

  1. Anonymous
    Posted November 29, 2008 at 9:31 am | # | Reply to this masterpiece

    Well said there Promo Douche!! I totally agree!!

  2. Allan
    Posted November 25, 2008 at 12:21 pm | # | Reply to this masterpiece

    It’s so much better for everyone to be able read the full text of these statements than just the snippets selectively chosen and published elsewhere.
    Thank you, Hubert.

  3. Anonymous
    Posted November 25, 2008 at 9:39 am | # | Reply to this masterpiece

    Kev, the shortfall existed long before the credit crunch and fallout. Projected ad revenues were lower because audiences were lower than anticipated. Little Mosque, for instance, is Littler than estimates. I suspect, also, though have no evidence to support it other than what I see on bus shelters and hanging over the Gardiner, that promotional spending on pet shows was way over budget. Indeed there will be problems coming out the recession, but these will be in addition to those nutured during the boom times. There is no doubt that Hubert is, here, trying to hide earlier mistakes made by management behind larger, external forces. He’s making implications. It’s a bad act.

  4. Kev
    Posted November 25, 2008 at 8:57 am | # | Reply to this masterpiece

    It isn’t that the money was lost because of the credit crunch and subsequent freefall, it’s that it’s not going to be made. They would have projected ad revenues that are now not going to materialize, as advertising budgets are being cut across the board. And said budgets are being cut because of the WTF-are-we-calling-it-now-anyway.

  5. Promo Douche
    Posted November 25, 2008 at 7:00 am | # | Reply to this masterpiece

    Here’s an idea.

    As a good faith gesture, those members of Senior Team who got a bonus last year should return that bonus to the corp.

    To use your own words, Hubie ‘think hard about what it is you do’.

    There’s probably a ton of old farts throughout the corp who should stop buying muffins and coffee for meetings or printing out their e-mails, or taking boxes of pens home, but the way that senior team spends, and the strategic choices they have made are at the heart of the problem.

    Passing the buck to the employees to fix this problem on a paper-clip-by-paper-clip basis is arrogant. If there’s a shortfall, it is because of poor management at the highest level – plain and simple. Time for senior team to own up to this.

  6. Anonymous
    Posted November 25, 2008 at 4:23 am | # | Reply to this masterpiece

    Being asked to believe that the $45 million was lost on account of global credit and market problems that started in October is insulting to the entire organization.


Post a Comment

Your email is never shared.

Upload Files

You can include images or files in your comment by selecting them below. Once you select a file, it will be uploaded and a link to it added to your comment. You can upload as many images or files as you like and they will all be added to your comment.