financial sustainability
year in review – our results
OPERATING EXPENSES
 |
Our operating expenses decreased by 6.0% ($102.7 million) compared to last year, with the main variances noted below.
Television, radio and digital services costs ( 6.5%)
Television, radio and digital services costs depend on the different events of significant importance we cover throughout the year and on our ongoing programming schedule. They represent the costs we incur in relation to the production of our programs, including the cost of our technical labour and facilities.
The 6.5% ($105.4 million) decrease in Television, radio and digital services costs resulted from the following:
Events
( $69.8 million)
Expenditures from events decreased by $69.8 million this year as last year’s expenses included rights and production costs for Hockey Night in Canada and the 2014 FIFA World Cup Brazil;
These decreases were partially offset by:
- Additional costs incurred this year for broadcasting the Toronto 2015 Pan Am and Parapan Am Games; and
- Costs incurred for the first full year under our new agreement with Rogers for the continued broadcast on Saturdays and during the playoffs of Hockey Night in Canada, which started in July 2014.
Ongoing activities
( $35.6 million)
Our operating costs also continued to decrease this year by
$35.6 million, or 2.2%. This reflected:
- The continued effect of our cost-savings initiatives that provided approximately $60 million in annual savings;
- The fact that last year’s results included $30 million of restructuring expenses in line with the announcements made in 2014 and 2015 as we balanced our budget and launched our then new strategic plan, Strategy 2020; and
- A downward revision of two legal provisions following new information obtained on these cases.
These decreases were partially offset by:
- Reinvestment of approximately $30 million in content across the Corporation, in line with Strategy 2020;
- Higher pension expense due to a change in actuarial assumptions; and
- Additional promotional expenses incurred for the launch of some of our new and recurring shows this year.
OTHER OPERATING EXPENSES ( 2.6%)
Other operating expenses include costs related to the broadcasting of the Corporation’s programs (“transmission, distribution and collection” and “payments to private stations”), corporate management costs, finance costs and the recognition of our share in our associate results (SiriusXM).
Other operating expenses increased by 2.6%, with the main variances highlighted below:
- Our share of results in associate decreased by 47.1% mainly because last year’s results included the receipt of a special dividend of $10.4 million from SiriusXM. Note we also sold some of our shares in SiriusXM last year; that is discussed below as a non-operating item.
- This was partially offset by:
- The continued decrease in our finance costs consistent with our expectations;
- Reduced transmission, distribution and collection expenses as we continue to see the effects of our cost-reduction initiatives; and
- Lower payments to private stations mostly due to the end of one of our affiliate agreements with a private broadcaster.
Scott Russell, Road to the Olympics, CBC Sports
