Corus again blames ‘recession’ for revenue drop; looks ahead to C-11

Fiscal 2023 will be an "especially challenging" year for Corus Entertainment Inc., according to the company's CEO, because of the "double whammy" of an advertising recession and an "unexpected" CRTC decision requiring the company to pay its deferred Canadian content obligations. CEO Doug Murphy made the comments on a Thursday morning second quarter earnings call with analysts, as the company reported a substantial decline in profits in its television segment. The year ahead looks uncertain also because of the looming possibility of a writers' strike in Hollywood, which would delay the delivery of new programming for the fall slate of content, chief financial officer John Gossling told analysts. Corus reported a $18.2 million drop in television revenue for the three months that ended Feb .28, down to $321.5 million from $339.7 million during the same period last year. The radio segment revenue held flat, up slightly to $22.3 million from $22 million last year. Within the television segment, the revenue decline includes a $15.6 million drop in advertising revenue, and an $8.8 million drop in subscriber revenue. Segment profits also declined. In television, the company posted a $29.7 million decline in television profits, down to $63 million from $92.7 million a year ago, representing a drop to a 20 per cent profit margin from a 27 per cent margin. Radio profits increased slightly, up to $350,000 from $125,000 a year ago, or an increase in profit margin of a single percentage point. The explanation offered by Murphy – the advertising recession – was similar to the one offered after Corus posted disappointing results in the first quarter. "While visibility around television advertising and the nature of the economic slowdown/recession is limited, management remains committed to staying the course through prudent programming investment, incremental marketing to drive digital subscription revenue" alongside a "robust" content pipeline, RBC Capital Markets analyst Drew McReynolds wrote in a thursday evening note. Murphy also pointed to the coming change in regulatory landscape posed by the passage of Bill C-11. "We are also at long last on the cusp of some much needed regulatory changes in our industry. Bill C-11 gets the big things right," the CEO said and reiterated his longstanding call for decreased spending obligations on Canadian broadcasters. "We urge the CRTC to move very quickly to implement the new legislation after it passes, including by revisiting obligations on Canadian licensees," Murphy said. "Establishing new rules for foreign players and recalibrating existing rules on Canadian players will be necessary to truly level the playing field. The outcome which is at the heart of this legislation." -Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

Corus again blames ‘recession’ for revenue drop; looks ahead to C-11

Broadcast | April 13, 2023

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Corus again blames ‘recession’ for revenue drop; looks ahead to C-11

Broadcast | April 13, 2023

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