By Ahmad Hathout
The head of Corus said Thursday that the CRTC’s recent decision to make the company’s 15 Global stations eligible for funding from the Independent Local News Fund (ILNF) will make a significant impact on its financials, as it deals with advertising uncertainty heading into the fourth quarter.
It’s too soon to tell whether the roughly three-week-old decision will come in time to assist the media company going into the traditionally softer fourth quarter. But if it does, it would come at an important time for the company, as it battles a difficult advertising and high-content-cost environment.
“That would have a huge impact,” Corus CEO John Gossling said during a fiscal third-quarter earnings conference call Thursday.
The regulator’s decision came after it determined that foreign and standalone Canadian online streamers over a certain revenue threshold must contribute five per cent of their annual Canadian revenues to content funds, including 1.5 per cent to the ILNF, which translates to an influx of roughly $42 million into the pot.
But while the broadcaster told us at the time of the decision that it was “in the process of working through the details and confirming the timing of receipt of our funds with respect to our 2025 financial year,” Gossling conveyed that the decision’s impact may not be felt by the time it wraps up its year in September.
In the meantime: “We’re trying to stabilize things,” Gossling said on the call. “We will do things that will manage the content cost line better as we go forward.”
Gossling said the company has been hurt by its reliance on linear. And despite having digital options like Stack TV, there is more competition in the market for ad dollars.
“We’re absolutely feeling it,” he said about the tough ad environment, adding sports has been a big part of it, especially in the last couple of months.
In fact, the company radio revenue was only slightly down – by one per cent to $23 million – attributed to the strong performances of the Edmonton Oilers and Winnipeg Jets in the NHL playoffs. Radio profit was up 93 per cent to $5 million thanks to “cost savings initiatives.”
The company’s television revenue was down 11 per cent to $275 million in the quarter on a year-over-year basis, with advertising and subscriber revenues both down 15 and five per cent, respectively, to $151 million and $111 million. Profit in the segment was down eight per cent to $63 million.
Total revenue and profit were down 10 and nine per cent, respectively, to $298 million and $62 million.
The company has leaned on its marketing of the new Home and Flavour channels – rebrands from the HGTV and Food Network trademarks that were picked up by Rogers last summer.
It held a limited free preview of the channels when it launched in January, which Gossling said yielded a strong audience and subscriber response.
The company also said its streaming portfolio, including Global and StackTV, had its strongest winter/spring season ever with over 19 million monthly average hours.
“We’re expecting some [advertisers] will come back because when you don’t make your audience numbers and fulfill your promises, then advertisers learn from that,” Gossling said.
