By Ahmad Hathout
OTTAWA – The CRTC on Thursday is proposing to relax Corus Entertainment’s regulatory obligations on an “exceptional basis,” as the pure-play media company saw a dramatic decline in its financials over the year.
Corus sent an application to the regulator last Wednesday stating that high inflation, its sub-$1 share price, and its debt-to-liquid cash ratio reaching “unacceptable levels” after the content company saw a 61 per cent free cash decline over the previous year have put it in a precarious position with rapidly declining profitability. The company said it has had to halve its dividend since its November application to preserve cash.
It requested last week for the CRTC to temporarily reduce its obligation to programs of national interest (PNI) from 8.5 per cent to 5 per cent of previous year’s revenues and extend the deadline to pay back what it already owes the regulator from the pandemic relief period.
“Given the urgency of the situation, the Commission determines that it is appropriate to give immediate consideration to Corus’ application on an exceptional basis,” the CRTC said in a letter addressed to the company, noting that the order, if approved, would stand until it can make a full determination on Corus’s full application.
“In light of the unique circumstances and Corus’ stated commitment to continue contributing to the policy objectives of the Broadcasting Act, including through investments in Canadian journalism and through support for the Canadian creative sector, the Commission is of the preliminary view that it would be appropriate and in the best interest of the Canadian broadcasting system as a whole to amend the conditions of service that apply to Corus’ English-language television stations and discretionary services,” the CRTC letter continued.
The public has until November 3 to submit interventions.
Corus had filed an application in November to reduce those aforementioned obligations plus its Canadian programming expenditure (CPE) amount from 30 to 25 per cent of those revenues. Wednesday’s application was not intended to replace November’s, but to request quick relief.
The CRTC had previously set the PNI spending to 5 per cent of revenues, but that decision was successfully appealed to Cabinet. The CRTC then established the 8.5 per cent requirement.
While other broadcasters, including Bell, Quebecor and Rogers, have filed applications to adjust their Canadian content obligations, the CRTC specifically noted Thursday that Corus is not a vertically integrated company.
The CRTC is still a long-ways away from implementing the Online Streaming Act, which would force foreign streamers to contribute to the Canadian content ecosystem.
Meanwhile, Corus announced Thursday the elimination of the position of executive vice president of content and strategy and the expanded role of Troy Reeb as executive vice president of networks and content.
