APTN still reeling from near-death experience

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

"We were within 10 days of having the plug pulled. We would have been off air," said Jean LaRose, the network's chief executive officer (CEO), reached by phone while attending the Banff Television Festival in Alberta. "We had to refinance 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, who assumed the CEO position at the network (launched in September 1999) 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."

The letter said producers have been adversely affected by APTN's difficulty in meeting its financial obligations.

"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."

APTN board chairwoman Catherine Martin confirmed the network had made mistakes during its first years of life.

"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."

LaRose said APTN had to restructure, re-organize, and re-define its priorities.

"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. The network launched 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, in light of the letter sent out by LaRose, wondered about the amount of money sent 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.

Birchbark asked the board chairwoman if the board members were being paid.

"No. The board of directors are not being paid to be board members. They get their honourariums, and they're compensated for any additional professional services they provide," she replied. Martin provided an example of one such professional 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 asked if Martin's answer didn't mean that some board members are being paid. He said it was a matter for the board.

The CEO did say though 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 or 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 boar 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 honouraria for their meetings and they receive travel.

And for their committee teleconferences, they receive honouraria. 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," she said. "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."

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 works out to just over $900,000 in revenue for APTN each year.

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