TORONTO – Corus Entertainment has finalized a long-term licensing agreement with the Disney/ABC Television Group that locks up the English- and French-language rights to Disney Channel's content in Canada plus will see Corus launch Disney Channel here this fall.
Thursday’s announcement comes hours after Family Channel owner DHX Media said that it was phasing out Disney branding on its specialty channels this year as its contract with Disney runs out at the end of the calendar year.
Corus said that the multi-year agreement expands on its relationship with the Disney/ABC Television Group that began in 2011, when Corus announced the launch of its millennial-targeted service ABC Spark, based on Disney/ABC's successful ABC Family channel in the United States.
Scheduled to debut on September 1, 2015, Disney Channel will air popular shows such as K.C. Undercover, Girl Meets World, Austin & Ally, Liv and Maddie and many others, continues Corus’ announcement. The agreement also includes authenticated simultaneous streaming and ad-supported video-on-demand rights for select programs airing on the channel, and select Disney branded kids linear television offerings will also be rolled out in the future as those brands and programming are transitioned to Corus.
"We are very excited to take our partnership with the Disney/ABC Television Group to the next level, and proud to be forging a new course for the iconic Disney Channel brand in Canada," said Corus president and CEO Doug Murphy, in the news release. "This deal underscores our commitment to provide Canadians with the highest quality content from around the world and reinforces our position as Canada's market leader in kids and family-focused offerings."
(Ed Note: It's a little confusing then, that Murphy told financial analysts just last week the company was not interested in a deal with Disney for the content DHX is losing. When asked about it, during the Corus second quarter conference call April 9, Murphy said: “We can't see how that would be a doable play for us, so no interest really.”)
"With this licensing agreement, we couldn't be more pleased to expand upon our highly valued and significant relationship with Corus Entertainment by bringing the Disney Channel brand — along with its hit programs and franchises — under their purview in the Canadian marketplace," added Janice Marinelli, president of Disney/ABC Home Entertainment and Television Distribution.
Bay Street had mixed reaction to the deal, with Corus shares popping up just 3% on the day to $17.58.
"As has become the norm with these types of deals, financial terms were not disclosed," wrote CIBC World Markets analyst Bob Bek in a note to investors. "However, we believe it likely that Disney’s previous distribution deal in Canada (with the Family Channel owned by DHX) cost somewhere in the neighborhood of $30M per year, with Corus no doubt paying a hefty premium to this. While the content is some of the most sought after for the kids genre, the longer-term economics of these types of deals remain questionable from our perspective, especially when coupled with the ongoing structural pressures that are now entrenched in the TV business."
