Corus says World Cup is partly to blame for lower advertising revenues
TORONTO - Specialty TV channel operator Corus Entertainment says the one-two punch of the World Cup and the Olympics helped devour national advertising revenues this year, affecting the company's overall results.
Chief executive John Cassaday told analysts on Thursday that he believes both events left some advertisers skittish about buying promotional spots on his channels, which include Teletoon, YTV and the W Network.
"A lot of times advertisers say ... 'Even if I'm not an advertiser in the Olympics or even if I'm not an advertiser in the World Cup, I know that those events are going to siphon audience,'" he said during a conference call to discuss the company's third-quarter financial results.
Cassaday said he expects advertising to launch a comeback in the company's next financial year, which starts this fall in time for the new television season.
"We are highly confident that we will see a solid return to advertising growth in fiscal 2015," he said.
For the quarter, Corus (TSX:CJR.B) reported a net loss of $30.3 million or 36 cents per share, including a non-cash broadcast licence and goodwill impairment charge of $75 million. That compared with a net profit of $89.9 million or $1.07 per share in the same year-earlier period.
Revenue grew 14 per cent to $214 million from $187.1 million year over year with the help of newly acquired television channels and radio stations.
Excluding items like the impairment charge, Corus reported adjusted net income of $41.6 million or 49 cents per share, missing analysts' expectations of 51 cents per share, according to data compiled by Thomson Reuters. Analysts had also expected revenue to come in higher at $228 million for the quarter.
In its television operations, subscription revenue grew to $86.5 million from $70 million a year ago, helped by the addition of new assets, including channels formerly owned by Astral.
Corus (TSX:CJR.B) was given regulatory approval late last year to acquire the remaining 50 per cent interest in Teletoon that it did not already own, as well as the acquisition of channels Historia and Series+. In January, Corus was given approval to acquire Ottawa-based radio stations CKQB-FM and CJOT-FM.
However, the new additions to its slate only helped overshadow a decline in subscribers for its pay TV business, which includes HBO Canada, The Movie Network and Movie Central.
Despite the popularity of hit series like "Game of Thrones," some viewers cancelled their packages after the end of a promotional introductory period. Corus has launched a summer retention offer to keep people from ending their subscriptions even though they're considered to be mainly low-margin subscribers.
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