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APTN still reeling from near-death experience: over-spent by $5.5 million.

BANFF, Alta.

The Aboriginal Peoples Television Network (APTN) came within 10 days of disappearing from Canadian airwaves forever. A cash flow crunch put it dangerously in arrears with the company that transmits its signal.

Jean LaRose, the network's chief executive officer (CEO), was reached by phone while attending the BanffTelevision Festival in the Alberta mountain resort town.

"We were within 10 days of having the plug pulled. We would have been off air. We had to re-finance to keep the organization afloat. If we hadn't we would have tanked. I'm being brutally honest here. The network was in a very, very difficult financial situation," LaRose said.

APTN board chairperson Catherine Martin confirmed that the network had made mistakes during its first four years of life and had committed to programming that cost, on average, about $1 million per year more than it took in.

LaRose, who assumed the CEO position about 18 months ago, said the board and management have had to go through a very difficult reorganization process in the past year.

He has also had to deal with a barrage of complaints from Aboriginal producers who feel they're not being given the opportunity to get their work on the air.

APTN sent out a letter to producers on Feb. 25 that stated "In the first five years of its existence, APTN spent and committed to programming projects that exceeded by over $5 million dollars its actual and projected revenues. APTN was, and still is, in a tight financial situation because of those commitments and expenditures. Producers have had to deal with that reality because APTN has had difficulty in meeting the financial obligations that had been made. In the last year, as you are aware, we have had to delay or defer projects that would have been very interesting for the network but that APTN cannot afford. We have addressed our financial situation and have managed to reorganize our financial position to meet the challenge. However, we are still in a tight financial situation and many shows that are currently on air will not proceed or be renewed."

Martin weighed in.

"It's fair to tell you that we had a lot of programs that needed to be aired. We purchased programs and we needed to air them. We over-spent on our programming and we needed to come back and get a balance in the expenditures and balance out our assets," she said.

"From my side, as the overall manager of the organization, the chair is quite correct in her statement," agreed LaRose. "I don't mind putting the numbers out there. I've told it to the producers. I don't mind if people know," he said. "We over-spent by $5.5 million in the first four years of operation. That means that this year was a very difficult year. We have had to deal with the fallout of that. We've had to restructure, re-organize, re-define a lot of our priorities to make sure that we would be there for the long run for all the Aboriginal peoples of Canada who are counting on us to ensure that the trust they've placed in us with this unique cultural institution is preserved for generations to come. And that has meant some programming that we would have liked to take on, to license, could not be licensed. Because we just didn't have the money."

Martin said the network has corrected its course and is now in good shape to go before the Canadian Radio and Telecommunications Commission (CRTC) to make the case for a renewal of its licence. APTN is currently drafting its renewal proposal. The network launched in September 1999 with a seven-year broadcast licence. The renewal process takes about two years and is expected to begin this fall.


"I believe that we're in good shape in terms of what CRTC asked us to do. So I'm confident," said Martin. "We've overcome a lot of obstacles to meet those requirements but I feel we're going to go to the table having met our licence requirements. Of course, the other factor is the public support, and for every negative comment I get, I get 10 positive ones. I expect criticism. I want to see it. That's how we grow. If we don't hear from the people, we're not going to be able to change to make things better."

Anger has been growing in the Aboriginal independent television production community for some time. Many producers looked at the financial statements APTN posts on its Web site and wondered about the money spent on board meetings and travel. APTN, a not-for-profit charitable corporation, where board members are considered part of the volunteer sector by Canada Custom and Revenue Agency regulations, spent a total of $354,610 on board meetings in 2003. There is also a line for board travel expenses totalling $168,470.

Since APTN's average annual operating budget has averaged about $23 million a year and since not-for-profit charitable boards are not supposed to be paid, many producers wondered why the numbers were so high.

Windspeaker asked the board chairperson if the board members were being paid.

"No. The board of directors are not being paid to be board members. They get their honorariums and they're compensated for any additional professional services they provide," she replied, and provided an example of such a service.

"The executives and the chair are charged with evaluation of the CEO. Above and beyond what a director usually does, that's one of the responsibilities they're charged with which requires at least six to 10 more days of your time to evaluate, address it. That's just one of the many other things that boards do that you can't do as a committee, you can't do with 21 members."

LaRose declined to comment when he was asked if that answer didn't mean that some board members are being paid. He said that was a matter for the board to deal with.

The CEO did say that board members and management at APTN have cut costs.

"In the year-and-a-half that I've been there, the board has recognized that the organization has to live within its means. The board has been doing that. When we travel, we're never going to go to five star of four star hotels. I'm not going to say we're going to the corner motel, because that doesn't suit us for meeting purposes. We stay in reasonable accommodation. Nobody travels first class; nobody travels business class. If you want to make changes at the last minute, it's at your own expense," he said. "The board works hard to pre-book their meetings a minimum of two weeks in advance to get the best fares. In that regard, the board is making very prudent and judicious use of their travel money and that's why, if you look at the budget from two years ago to last year, you'll see that the travel budget dropped a lot."

Martin defended the board spending, saying the producers don't realize the costs associated with the operation of a board that has several members who live in the far north.

"The board budget isn't just about board members. It's about professional fees, legal fees. The board of directors receive honoraria for their meetings and they receive travel and for their committee teleconferences, they receive honoraria. So for 21 directors times four three-day meetings across the country, plus we have four committees on the board that meet at least once a quarter," said Catherine Martin.

"Look at all the parts of the country we fly people out of. One ticket for example from a northern point is $2,000-plus to get them here, takes two to four days to get them there and back. Then they're at the meeting. So some of the directors have to be gone for seven or eight days from their job or their community. I don't think that the honorariums are high. And they're not in relation to other organizations in the country, especially Native organizations."

Jean LaRose said the darkest days for APTN are over, but he is worried about one other threat to the network. He notes that the Conservative Party of Canada has pledged to scrap the CRTC and allow the broadcast industry to operate free of regulations. The CRTC has created protected places on the dial for channels that serve minority or special interest audiences and it ruled that all cable companies must carry APTN and pay the network 15 cents per subscriber. Each penny equals about $900,000 for APTN each year.

"If they dismantle the CRTC, which has been instrumental in the creation of APTN and ensuring it survives, if they were to just open it up, cancel everything like mandatory carriage and subscribers' fees, etc., networks like ours are dead," LaRose said.

By Paul Barnsley

Windspeaker Staff Writer
COPYRIGHT 2004 Aboriginal Multi-Media Society of Alberta (AMMSA)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Title Annotation:News; Aboriginal Peoples Television Network
Author:Barnsley, Paul
Publication:Wind Speaker
Geographic Code:1CANA
Date:Jul 1, 2004
Previous Article:Renewal the goal.
Next Article:B.C. complaints heard.

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