By Ahmad Hathout
The CRTC has on Monday finally decided to ease Corus’s financial obligations and delay the payback period to certain Canadian content funds, more than six months after it requested said relief.
That means Corus will see its obligations to programs of national interest (PNI) reduced from 8.5 per cent of previous year’s revenues to 5 per cent and extend beyond the current licence term the repayment period of certain amounts owed to its Canadian programming expenditure (CPE) that were deferred from the pandemic.
“The evidence on the record of this proceeding demonstrates that Corus is under considerable financial strain,” the CRTC said in its reasoning Monday. “Its over-the-air stations experienced a slightly sharper decline in revenues over the last five years than did the rest of the industry.
“Further, the financial performance of Corus’ stations did not rebound in 2021 from the impacts of the COVID-19 pandemic as strongly as did services operated by other licensees and groups,” it added. “In addition, Corus’ over-the-air stations were significantly more unprofitable than the rest of the industry, with profit before interest and taxes (PBIT) margins ranging from between 9.5 and 21.0 percentage points lower between 2018 and 2022.”
Despite facing several applications from broadcasters to similarly modify their conditions of licence, the CRTC has repeatedly said Corus is an exceptional case. Unlike the other large relief applicants like Rogers and Bell, Corus is not vertically integrated, meaning it doesn’t have distribution assets for its content; it has the highest PNI expenditure requirement; and because it is no longer associated with a broadcasting distribution undertaking, it doesn’t have the flexibility to devote part of its local expression contribution to the production of local news on local TV stations.
The latter happened when the CRTC approved Rogers’s acquisition of Shaw’s broadcasting assets in 2022, which effectively untangled Corus from Shaw and converted Corus into an independent programming undertaking from a vertically integrated entity.
“As a result, Corus’ conventional television stations are the only private broadcast news providers without access to allowable local expression funding or to the Independent Fund (ILNF),” the CRTC said. “This places them at a significant disadvantage when compared to vertically integrated and independent local news providers.”
The regulator said it would address Corus’s unique situation after the Shaw acquisition — and the other broadcaster issues — during the implementation of the Online Streaming Act.
But in the meantime, Corus “remains independent but without access to key supports for independent programming undertakings, and with elevated requirements relating to PNI expenditures and to spending on and exhibition of news,” the CRTC added.
The regulator said it doesn’t believe that Corus’s decrease in spend on PNI, a subset of CPE, will reduce its overall spending on the latter. As a result, the CRTC said the overall impact on the broadcasting system would be “minimal, while allowing Corus to focus on other types of Canadian programming.”
As for pushing the repayment date back on deferred payments to CPE, the CRTC said that would allow Corus “additional time to repay in the next licence term any under-expenditures accumulated in the current licence term. Such additional flexibility would allow Corus to address its current difficult financial circumstances over a longer time period. Given the situation, the Commission finds that such relief is appropriate.”
Corus filed a relief application in November 2022, pointing to its poor financial performance, and another expedited request in October 2023, before the CRTC that month proposed that it grant the company its request. The CRTC needed to hear from the public before it made a final decision.
Six months later, and almost exactly a month ago, the company’s CEO Doug Murphy spoke directly to the CRTC on a quarterly financial conference call, telling it to “get on with it” and approve its request.
Screenshot of Corus CEO Doug Murphy
