Raptors finals run a ‘massive drain’ on viewership, Corus says

Executives at Corus Entertainment Inc., historically proud of not being in the sports content business, admitted on Wednesday that the Toronto Raptors’ NBA finals route pulled viewers away from its lifestyle, family and children's content -- on a bigger scale than normal. “Some numbers I’ve seen suggest that the Raptors run in the finals was equal to two-times the average Canadian Olympics audiences, so it was a pretty massive drain on impressions,” the broadcaster’s CEO Doug Murphy said on a third-quarter conference call with analysts on Wednesday. The Raptors went all the way to win the 2019 NBA championship earlier this month. BCE Inc. and Rogers Communications Inc., co-owners of the corporation that owns the Raptors and Maple Leafs, shared broadcasting rights to the games. Murphy -- who attributed one-third of the company’s growth in the second quarter to there being no Olympics this year compared to 2018 -- qualified his comments by saying that’s a “back-of-the-envelope piece of calculation.” The company did not quantify the impact of the Raptors on its financials. While Murphy said he doesn’t expect to see the same level of TV ad growth that Corus saw in the second and third quarter, the company said it is “cautiously optimistic” that it expects to see “modest growth” in the next quarter. Part of that hesitation to provide guidance is that the company is reporting 10 days sooner than it normally does the third quarter. Sports is a genre of content that Murphy often compares to his Corus' slate of family-oriented content. He’s said in the past that he’s “delighted not to be in the sports business,” and has often touted the success of the company’s stable of properties against sports in a given quarter. Revenues for the combined television and radio segments this quarter were up four per cent to $458.4 million, compared to $441.4 million in the same quarter last year. Television increased about $19,000 in that same period to roughly $421.5 million, while radio declined by about $2,000 to about $37 million. Factoring the corporate segment, the company’s profits were flat at $170.5 million -- with TV up to $166.7 million and radio down to $9.8 million. This represents another quarter of TV advertising growth for the company after a tumultuous journey last year. On Wednesday, the panel reviewing Canada's communications laws released its interim report just over an hour after the conference call. The report, as promised, includes no recommendations from the panel; it only reflects what industry has submitted to the panel, including Corus’ suggestions, which were previously not accessible to the public -- voluntarily or through Access to Information law. The panel’s recommendations will come in a final report in early 2020. On the call, Murphy opened up about the company’s recommendations to the panel, snippets of which were seen by The Wire Report in a briefing note. "The government lacks the will to do is right, because it’s politics,” Murphy said. “Anybody that’s got even half the knowledge of economics knows that Canadian small businesses pay sales tax -- why do we allow foreign internet companies to come here without paying any taxes?” Currently, foreign internet companies do not have to pay sales tax -- largely because most operate on the hard-to-regulate borderless internet and don’t have physical locations in Canada. Heritage Minister Pablo Rodriguez said Wednesday that the Liberal government plans to force large online services to make and promote Canadian content on their platforms, but he didn’t mention imposing sales tax on online platforms. While the review panel noted in its report “almost all interested parties” said there should be tax parity, the idea that the Liberal government would impose a “Netflix tax” has been something that has had the Liberals on the defence since the previous federal election. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Raptors finals run a ‘massive drain’ on viewership, Corus says

Broadcast | June 26, 2019

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Raptors finals run a ‘massive drain’ on viewership, Corus says

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