Source: Ottawa Citizen

Canada's private broadcasters saw their profit margins fall 5.9 per cent in the last year as declining advertising sales took a bite out of revenues.

Total revenues for conventional television stations fell 7.9 per cent in the period from Sept. 1, 2008 to Aug. 31, 2009, the Canadian Radio-television and Telecommunications Commission said Thursday in an annual report that provides information on the sector's profitability, revenues and expenditures.

Revenue in the period shrank to $1.97 billion from $2.14 billion in 2008, the broadcasting regulator said.

Even after cutting their operating expenses by 2.4 per cent, private broadcasters lost $116.4 million before interest and taxes, which translated into a 5.9 per cent drop in profit margins. In 2008, the broadcasters reported profits before interest and taxes of $8 million and a profit margin of 0.4 per cent, the CRTC said.

Declining advertising revenues were a major reason for the drop -- local advertising sales fell by 10.1 per cent in the period, to $387.2 million from $387.2 million in 2008, while national ad revenues were down 10.3 per cent to 1.32 billion from $1.47 billion.

Programming accounted for 75.2 per cent of private broadcasters' expenditures -- or $2 billion, down from $2.1 billion the previous year. The CRTC reports that conventional television broadcasters spent 3.3 per cent less on Canadian programming in 2009, $599.4 million, down from $619 million. Of that figure, $312.1 million was spent on news programs.

Meanwhile, private broadcasters increased spending on foreign programming by 9.2 per cent to $846.3 million, or 59 per cent of expenditures, "the highest level yet," the CRTC said.

The broadcasters employed fewer people in 2009, 6,747 compared with 7,406 in 2008, and spent $527.6 million in salaries, down from $576.9 million the previous year.

© Ottawa Citizen