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Television and radio broadcaster reports that its consolidated revenue fell 16.5% for the quarter, and 15% for the year to date.
Corus Entertainment Inc. says it expects to have slashed 25% of its full-time workforce by the end of next month compared with the beginning of its 2023 fiscal year, as the company continues to “aggressively cut costs.”
The job losses, which amount to around 800 positions, come during a turbulent year for the Toronto-based television and radio broadcaster, mired by advertising revenue declines, regulatory challenges and licensing battles.
On Monday, Corus reported a loss attributable to shareholders of $769.9 million in its latest quarter compared with a loss of $495.1 million a year earlier as its revenue fell 16%. Revenue in what was the company’s third quarter totalled $331.8 million, down from $397.3 million a year earlier.
The drop came as television revenue in the quarter sank 17% to $308.2 million compared with $371.2 million last year, while radio revenue slipped 9.9% to $23.6 million compared with $26.2 million a year earlier.
“We’re making tough decisions to shutter areas of the business we can no longer sustain and pause longer term development activities while we implement efficiency initiatives,” said co-chief executive John Gossling during a conference call with analysts.
“Our plan is to emerge as a smaller but more profitable business with a sustainable future.”
Corus has attributed the advertising slump this year in part to lingering effects from the 2023 Hollywood strikes that delayed production of key programming, along with inflationary and competitive challenges.
In May, Canada’s broadcasting regulator granted the company’s request to ease some of its Canadian content spending requirements after it warned of an increasingly dire financial situation. The CRTC noted the risk of Corus exiting the Canadian broadcasting landscape “would greatly reduce the options Canadian viewers have for content.”
Then last month, the company was hit by the loss of rights to key brands like HGTV, Food Network, Cooking Channel, Magnolia Network and OWN, as of the end of this year.
That was due to Rogers Communications Inc. inking a multi-year deal with Warner Bros. Discovery for its popular lifestyle and entertainment brands in Canada starting Jan. 1.
Rogers is also set to take over the Canadian programming rights from Bell Media for television channels such as Discovery Channel Canada, Discovery Velocity, Discovery Science and Animal Planet.
Corus soon after announced that Doug Murphy was retiring from the top job and that Gossling and fellow executive Troy Reeb had been appointed as co-CEOs.
Reeb told analysts that Corus intends to continue providing home and culinary content under new television channel brands following the Warner Bros. deal with Rogers.
He said the company is exploring “all legal and regulatory remedies” in response to that agreement, noting “our intent is to do what we need to do to protect our business.”
Reeb and Gossling declined to offer further details, such as whether Corus would follow Bell Media’s lead by seeking an injunction to block Warner Bros. Discovery content from being broadcast when Rogers takes over as the rightsholder.
“I don’t think we want to reveal the overall strategy at this point, but … don’t assume that the only line of defence is through the regulator,” said Gossling.
Corus said its third quarter loss amounted to $3.86 per diluted share for the quarter ended May 31 compared with a loss of $2.48 per diluted share in the same quarter last year.
On an adjusted basis, Corus says it lost 10 cents per share in the quarter compared with an adjusted profit of nine cents per share a year earlier.
Shares in the company were down four cents, or 20%, to 16 cents on Monday morning.
RBC analyst Drew McReynolds said in a note that “given the still challenged operating environment,” it is expected that shares in Corus will remain “under pressure.”
As part of Corus’ plan to reduce costs, Reeb said the company’s news branch “will continue to drive industry leading efficiency efforts,” while leaning on digital technology to keep creating local content.
He said the company must “redouble our efforts to reduce legacy costs, not just in news, but in all areas of the business.”
“We are fortunate at Corus to have tremendous legacy in our brands,” he said.
“But that does not mean we also have to carry legacy cost structures.”
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