Corus reports drops in revenue, profit during Q3 as layoffs continue

Corus Entertainment Inc. expects to have cut a quarter of its full-time staff by the end of August, company brass told investors on Monday. In its third quarter report, Corus acknowledged that its revenue and profitability have “declined significantly” over the past two years. By the end of next month, the broadcasting company and parent of Global News expects to have laid off 800 of its full-time staff, or 25 per cent of its roster, since the beginning of fiscal 2023. Corus CFO John Gossling — who is the company’s co-CEO alongside Troy Reeb following the early retirement of CEO Doug Murphy last month — told analysts on a call following the release of the results Monday that the board of directors has “given us a clear mandate to decisively right-size the business and create a more sustainable future.” So far this quarter, Gossling said the company has reduced the size of its executive team and is keeping up with its “accelerated headcount reductions.” Corus reported revenues of $331.8 million between its television and radio segments, with TV services bringing in the most at nearly $308.2 million, and radio at $23.6 million for the quarter ended May 31, 2024. Year-over-year, revenue was down in both segments by 17 per cent in the case of TV, and 10 per cent in radio, for a total drop of 16 per cent from $397.3 million in revenue in Q3 2023. Consolidated advertising revenue was down by 14 per cent, subscriber revenue was down six per cent, and distribution, production and other revenue declined by 63 per cent year-over-year, the company reported. New platform revenue, which is combined subscriber revenue of Corus’ streaming services plus advertising revenue from digital platforms, was nearly $35 million — accounting for 12 per cent of its total TV advertising and subscriber revenue. Revenue in the digital and streaming platform category was down nine per cent from $38.6 million last year. Segment profit was also down by 30 per cent to $67.5 million, down from $96.9 million in the same period last year. More specifically, television profits dropped by more than 28 per cent from just over $96 million last year to $68.4 million in Q3 2024. Radio was down by more than 36 per cent to approximately $2.6 million, from $4.1 million the previous year. Corporate profit sat at a loss of $3.51 million. Corus reported a net loss of $773.1 million for the quarter and nearly $743.8 million for the nine months ended May 31. The company said Monday it paid down $4.6 million of its debt during the quarter, and $36.1 million year-to-date. Its net loss attributable to shareholders was $769.9 million, or $3.86 per share basic. Shares in the company fell by 22.5 per cent to $0.155 at market close Monday. Co-CEO Reeb told analysts that Corus needs to “redouble” its efforts to cut down legacy costs in all areas of its business, including how it’s regulated. “While we have recently seen some positive developments from the CRTC,” Reeb said, “I want to be clear that we need to continue to be a prominent voice for the equitable treatment of Canadian broadcasters versus not only the foreign streaming and internet giants, but also versus Canadian distributors who compete with us for content rights at the same time as we negotiate with them for carriage of our services.” In June, Corus lost the licensing of several Warner Bros. Discovery channels to Rogers Communications Inc., including HGTV, The Food Network, Magnolia, the Cooking Channel, and the Oprah Winfrey Network. Meanwhile, in May, the CRTC approved amendments to Corus’ broadcasting conditions that granted the independent broadcaster much needed regulatory relief. Corus was allowed to reduce its requirement relating to spending on programs of national interest from 8.5 per cent to five per cent of the previous broadcast year’s gross revenues, and extend the Canadian programming expenditure under-spending repayment deadline beyond the end of the licence term. Last month, the Canadian Media Producers Association asked the Federal Court of Appeal to quash the CRTC’s decision, arguing the company has not been complying with the spending requirements it was pleading to have loosened. Reeb also on Monday pointed to the CRTC’s decision to require foreign streaming services to make financial contributions supporting the Canadian broadcasting sector as an encouraging development. Reeb additionally expects to benefit from local news funding to be released as part of Alphabet Inc.’s Google’s agreement with the federal government to annually compensate news organizations $100 million and continue sharing Canadian news content on its platforms. – Reporting by Hannah Daley at hdaley@thewirereport.ca, with files from Phalen Tynes-MacDonald at pcreed@thewirereport.ca

Corus reports drops in revenue, profit during Q3 as layoffs continue

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By Phalen Tynes-MacDonald
| | July 15, 2024

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Corus reports drops in revenue, profit during Q3 as layoffs continue

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