Corus expects modest revenue decline in Q4, leaning into CanCon amid US writers’ strike

As the advertising recession maintains its grip on Corus Entertainment Inc.’s revenue stream, the company said it will continue leaning into its Canadian and unscripted content in preparation for the possible impact of the ongoing writers’ strike in FY2024. For the three months that ended May 31, Corus’ overall revenue saw a decline of eight per cent, down to $397.3 million from $433.5 million this time last year. During the company’s earnings call on Thursday, CEO Doug Murphy blamed the drop on lower television advertising and subscription revenues. This quarter was “another difficult one,” he said, “the advertising recession which began last summer continues and has negatively impacted our revenues and third quarter results.” Television revenue saw an eight per cent decline from $404 million in Q3 2022 to $371 million this quarter. The segment’s advertising revenue dropped 12 per cent, down to $209 million from last year’s $238 million. Subscription revenue declined to $124.2 million from $130.4 million, a five per cent decrease. Radio revenue saw an 11 per cent decline from $29.3 million to just under $26.2 million. Corus’ overall profit was down to just under $97 million, a 22 per cent drop from $123.7 million last year. Based on last year’s fourth quarter, “where the back half of the quarter really fell off the precipice, we’re not in a position to say we could get to growth in Q4,” said Murphy, adding that a single digit decline is expected. “There’s a lot of uncertainty in Q1, really because of the strike. That’s added a new layer of complexity into the outlook conversation,” he explained. Murphy noted that although Canadian productions and Corus’ quarterly earnings have not been affected by the ongoing strike, there is a lot of uncertainty for what it will mean for the upcoming fiscal year and they are bracing for possible spikes in production costs. “When I was in the US with our partners most recently, the general comment was, ‘If you’re going to have a writers’ strike, have it during an advertising recession,’” he said. If demand was substantially higher, the sudden impact on supply due to the strike would have been “more painful,” claimed Murphy, but because demand was already a challenge this quarter, Corus’ model has become more balanced. “We’ve got a really strong unscripted schedule,” said Murphy, listing several programs like Big Brother, Survivor, The Wall, and Global News, as examples of productions the company will lean into in the coming months while it waits for the strike to end. During the call with analysts, Murphy praised Canada’s Online Streaming Act saying the old act “is finally ready to die and be buried.” Murphy, however, wants swift relief until it is fully implemented. In a request filed to the CRTC in November, Corus said it is struggling to keep up with unregulated foreign competitors, particularly online streaming services, and asked the commission to amend its conditions of licence. BCE Inc., Quebecor Inc., and Rogers Communications Inc. have all filed similar requests with the commission. Murphy reiterated these frustrations, saying that news is an expensive investment. “We remind the regulator that, in our opinion, our only regulatory obligation is to be the provision of news to Canadians, everything else is rooted in 1991.” Last month Corus also asked the CRTC to confirm its eligibility to receive Independent Local News Funding funds now that it is no longer affiliated with Shaw – a move whice local independent news stations opposed this week in interventions filed with the commission. – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Corus expects modest revenue decline in Q4, leaning into CanCon amid US writers’ strike

News | 06/29/2023 4:59 pm EDT

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