Faced with a $65 million advertising shortfall, the CBC is reaching out to Ottawa for bridge financing, an unprecedented request of a Conservative government that has historically had a cool relationship with the public broadcaster.

"The revenues fell off a cliff. ... I have not seen a slide that precipitous and that deep in my entire life," Richard Stursberg, executive vice-president for English services, told employees yesterday.

"We have not been able to bail the boat as quickly as the water is coming in over the gunwales."

The public broadcaster says it has used surpluses from other divisions and money in reserve to narrow the budget shortfall to $12 million during the current fiscal year, which ends March 31, but ad revenues are forecast to continue to plummet in the coming year.

Stursberg, who confirmed the move at the monthly town hall meeting yesterday, conceded he did not know what type of reception he would receive from the Conservatives, who, while in opposition, were often overtly hostile to the CBC.

"We don't know how receptive the government will be to the request," he said.

A spokesperson for Heritage Minister James Moore said he was already in discussions with the CBC and indicated the door was open to help the corporation.

"In these difficult economic times all broadcasters, including the CBC, are facing challenges, and he is open to working with everyone in a way that will serve all Canadians," Deirdre McCracken told the Star.

Stursberg did not specify the amount of the bridge loan the CBC is seeking from the government or from a private bank.

"The money ... is not a handout. ... It would be paid back," he said.

Advertising revenues in the corporation's English-language TV operations went into decline last summer.

Canada's private TV networks, CTV and Canwest Global, are also in crisis because of falling ad revenues, exacerbated by the recession.

Just how much the CBC needs to survive is a matter of conjecture.

"We've been in discussions with the federal government about (the bridge financing option) for the past month," said Jeff Keay, the broadcaster's head of media relations.

"Senior management is focused on managing (the shortfall) without putting programs, services or jobs at risk."

Management is working on a strategic plan to present to its board of directors before the end of March, he said.

But the corporation may be in deeper trouble than Stursberg is admitting, said Ian Morrison, spokesperson for Friends of Canadian Broadcasting, a broadcast industry watchdog group.

"We believe that the shortfall is $100 million or more, attributable to the decision last year to purchase several expensive U.S. TV properties, including Jeopardy, Wheel Of Fortune and The Martha Stewart Show, on airtight, multi-year contracts," he said.

Even though the programs have won substantial audiences, the anticipated income has not materialized because of the media-wide decline in advertising revenue, coupled with the recession, Morrison said.

"It's a perfect storm, the beginning of a death spiral.

"A $45 million shortfall in the summer has grown to $100 million or $125 million," he said.

"To get out of that hole, CBC will have to make massive layoffs, as many as 600 or 700 of the most senior, costly employees, forcing the national broadcaster to be more centralized in Toronto and Montreal, and weakening its functions, scope and appeal."





With files from Bruce Campion-Smith