Media company says it is confident in slate of rebranded and new content after losing Discovery rights
By Ahmad Hathout
Corus Entertainment executives said Monday that the pure-play media company is expecting to make further cuts to full-time positions, which will bring the total by the end of August to almost 800, or 25 per cent, since the beginning of its fiscal year in September.
“Our board of directors has given us a clear mandate to decisively right-size the business and create a more sustainable future,” John Gossling, co-CEO of Corus and chief financial officer, said on a third quarter conference call Monday — the first since former chief Doug Murphy left last month.
“This means our priorities are to aggressively cut costs and manage our liabilities. We are making tough decisions to shutter areas of the business we can no longer sustain and pause longer-term development activity while we implement efficiency initiatives to further strengthen assets with more growth potential.”
Gossling said the company had already announced a leaner executive team in the fourth quarter, but are still “pursuing accelerated headcount reduction with a focus on unprofitable and unsustainable initiatives and lines of business.”
The company has been aggressive in its pursuit of stemming its financial losses, which have forced the CRTC to reduce its financial obligations to Canadian content.
Earlier this month, the company ended Big Brother Canada after 12 seasons. Last month, it announced it is pulling the plug on two of its AM radio formats in Vancouver and Edmonton, and laid off Global News staff. That same month, it renegotiated a carriage agreement with Eastlink, but in the form of paid theme packs (Corus networks previously came built into Eastlink TV packages).
Gossling said more announcements about cost-saving measures are coming.
“We can and will do much more,” he said.
More explosive was news that Rogers had scooped up the licensing rights for Warner Bros. Discovery, which included some home and culinary content that have been the cornerstone of Corus’s slate of programming, including HGTV Canada, Food Network Canada, the Cooking Channel, and the Oprah Winfrey Network, which Corus has already announced will be dropped on September 1. The rights, including trademarks, expire at the end of the year.
Co-CEO Troy Reeb addressed the concern surrounding the Rogers deal, which is being challenged by co-affected content owner Bell in an Ontario court.
Reeb made two overarching points to allay fears: that there is great international content that doesn’t come from Discovery, and much of Corus’s success in terms of revenue pull has come from integrated advertisers in its Canadian programs.
“We intend to continue to operate Canada’s largest and most widely distributed networks in the home and culinary genres under new brands and with new content across our traditional television and streaming portfolio,” Reeb said, adding the executive team doesn’t anticipate advertiser scare as the date of licences expiry nears. “Our rebranding plans for these channels are progressing quickly and we expect to provide full details in the coming months.
“We are right now successfully securing new program supply,” he said, including Extreme Makeover: Home Edition.
“In the coming weeks, we will announce expanded relationships with two existing studio partners that reinforce the value we offer as an independent broadcaster focused solely on media and content,” he added.
Reeb added that the company needs to be agile in pursuit of growth opportunities in connected TV and premium digital video, as more platform competition means ad dollars are being stretched. He said Corus needs to show to advertisers – like his predecessor Doug Murphy conveyed – that the company’s programming runs the full gamut, including getting eyeballs on both linear and digital – which are not necessarily overlapped.
“While linear TV is no doubt in decline, it remains a crucial part of the advertising mix,” Reeb said. “In the meantime, Corus is successfully supplementing linear audiences with massive volumes of premium digital video inventory from our growing streaming portfolio. Stack TV trends are encouraging, with modest subscriber growth leading to an all-time high on Amazon Prime Video last week.”
Reeb also pointed to some positive news out of the regulatory sphere, including the aforementioned regulatory relief, which is being challenged in court, and the CRTC ordering a five per cent base contribution from online streamers toward certain content funds – which is also being challenged in court.
“We expect a significant benefit from this to Corus, which is currently the only conventional Canadian broadcaster not able to access regulated local expression funding,” Reeb said of the five per cent contribution.
He also pointed out that Global News has been a success story, bucking the overall poor news trend by posting a 3.5 per cent increase in revenues with a two per cent increase in total audience across linear and digital since the beginning of the year. He said while local news has been difficult to sustain, national news at scale has been good for the company.
For the three months that ended on May 31, Corus announced revenues in both television and radio segments (consolidated) of $331.8 million, down from nearly $400 million from the same period last year. Television revenues were $308.2 million, down 17 per cent compared to the equivalent period, while radio revenues were $23.6 million, down 10 per cent.
Consolidated profits were $67.5 million in the period, down from $96.9 million over the same time. Television profits were $68.4 million, down 29 per cent over the same period, while radio profits were $2.6 million, down 36 per cent.
Net loss attributable to shareholders was $769.9 million, up 56 per cent from the same period last year.
Photo via Wikimedia
