Myth: Cable and satellite distributors earn billions in profits, but broadcasters are going broke
Reality: Most cable companies make their profits from combining television with other businesses like internet and local phones on a single network. Cable alone would not break even. Satellite, taking BellTV as typical, has only made a profit – a tiny 1% return on investment – once in the last 12 years. Big television broadcasters, by comparison, have never lost money. They own both local conventional stations and pay and specialty services. Together, they posted operating profits of almost 400 million dollars last year.
Just last week, Canwest CEO Leonard Asper said “our television business alone generates hundreds of millions of dollars in operating profits, so we have a successful business,” adding that “advertising markets are going to come back, the businesses that are underlying Canwest in Canada are significantly profitable, so when we come out of this with a lot less debt, if any debt at all, we’ll be a stronger company.”
Broadcasters don’t need a bailout.
