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CBC to cut executive pay, try to sell assets
By Wojtek Dabrowski
TORONTO (Reuters) - Canadian Broadcasting Corp, the government-owned operator of national television and radio networks, will cut executive compensation, offer voluntary retirement incentives and try to sell assets as it fights a funding shortfall caused by a sharp advertising downturn.
The public broadcaster's plan, already approved by its board, "assumes that the government will authorize our sale of enough assets to finance our way through this without deeper cuts," CBC Chief Executive Hubert Lacroix said in a memo sent to staff on Wednesday.
This is the strongest language the CBC has offered thus far about whether it will try to shed assets as it tries to make up for the revenue shortfall
"I know these are anxious times," Lacroix wrote.
The CBC, like other media companies, has struggled with a drop in ad revenue as the recession forces marketers to slash spending.
Lacroix wrote that the CBC is not planning to add more U.S. programing to its English-language TV schedule, as had earlier been considered, nor will it air commercials on its radio services.
The broadcaster, which receives more than C$1 billion ($813 million) in funding from the federal government each year, is also freezing executive salaries and cutting bonus payouts by 50 percent, the memo states.
As well, the CBC's board has backed a voluntary retirement incentive program, subject to government approval.
Aside from government funding, the CBC normally generates roughly C$600 million a year in revenue from commercial activities, including about C$340 million from advertising.
The CBC's senior executive team will provide employees with an overview of the broadcaster's financial situation and strategy on March 25.
The broadcaster has also turned to the federal government for help, although it insists it isn't asking for more money. Instead, it has suggested a line of credit or an advance on future funding to deal with the current crisis.
However, the government has replied that it expects the CBC to cut costs just like its private-sector competitors.
Cost cuts at two private-sector Canadian broadcasters, CTV and Canwest Global Communications Corp, have already resulted in hundreds of layoffs. CTV has cut 225 jobs since late November, while Canwest has cut 560, including 210 at its broadcasting operations.
A media report on Wednesday said that the federal government was looking at ways to help debt-laden Canwest, including the possibility of looser regulations and tax changes. Any government help for private-sector broadcasters would raise the question of whether the CBC should also receive aid to cope with its woes.
Lacroix has also argued the CBC has no access to the capital markets or to commercial borrowing, which its private rivals can tap for financing.
Canwest is also looking at selling five conventional TV stations and CTV has announced that it will shut down two stations.
(Reporting by Wojtek Dabrowski; editing by Peter Galloway)