The Canadian Radio-television and Telecommunications Commission (CRTC) has denied a request from Hollywood Suite to carry over excess Canadian programming expenditures (CPE) in its new licence term.

The Commission renewed the licence for the specialty channel group for five years in a decision published Friday (Aug. 25). The new term will expire on Aug. 31, 2028, and includes four channels, titled Hollywood Suite 70s Movies, Hollywood Suite 80s Movies, Hollywood Suite 90s Movies and Hollywood Suite 2000s Movies.

In its renewal application, Hollywood Suite had proposed to maintain its 10% CPE requirements — in which the licensee must spend a certain percentage of the previous year’s gross annual revenues on acquired or commissioned Canadian programming — but with the stipulation that its excess CPE spend from its previous licence term should be carried over.

The specialty channel group argued that it has seen a revenue slowdown due to a “continually shrinking BDU market,” according to the CRTC decision, noting that it is still not carried on Videotron, the fourth-largest BDU in the country. It is also contending with increased costs and declining revenue growth, which all make meeting its CPE requirements “increasingly challenging.”

In its decision, the CRTC said granting the request “would be a significant departure from existing policy,” arguing that a broad adoption of that practice would have a negative impact on Canadian programming. “In particular, the Commission is concerned about unintentionally creating an imbalance in the amount of investment in Canadian programming available from one period of time to another, which could lead to instability for Canadian producers and creators who count on funding indirectly subsidized by CPE contributions,” said the CRTC.

In the conditions of the licence for the new term, the CRTC has added certain flexibility features; one being that if Hollywood Suite’s CPE spend exceeds minimum requirements during a single broadcast year, it will be allowed to deduct the amount from the next broadcast year, as long as it remains within the same licence term.

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