Profit Dips, Fueled By Radio, Don’t Deter This Media Company

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TORONTO — Perhaps it is all about perspective when one takes a look at a company’s quarterly financial performance and goes straight to the profit or loss, rather than the revenue.


As Canada’s Corus Entertainment sees it, the owner of radio and TV stations and the Global television network enjoyed “a solid Q1.” But, its fiscal Q1 2020 profit dipped — and radio is largely to blame.

Is it harbinger of things to come in the U.S.?

For fiscal Q1 2020, in Canadian dollars ($1.30 per one U.S. dollar), Corus saw its revenue come in flat, at $467.88 million, shifting from $467.47 million.

However, TV is the driver, and revenue climbed to $429.95 million CDN, from $426.19 million.

Radio? The struggles continue for the 21-year-old owner of 39 radio stations, with revenue dipping to $37.93 million CDN in fiscal Q1 2020 from $41.28 million.

This resulted in overall profits slipping 4% to $184.12 million CDN, from $191.64 million.

In the radio division, profits fell to $12.03 million CDN, from $13.01 million.

But, TV didn’t fare so well either, with profits down to $178.6 million versus $184.6 million in fiscal Q1 2019, even as the adoption of a new accounting standard resulted in an overall increase in segment profit of $3.4 million.

In addition to radio, Corus owns 15 TV stations, full-service social digital agency so.da, Global, and lifestyle entertainment company Kin Canada. Global’s holdings also include an array of cable channels distributed across Canada, such as W Network, HGTV Canada, Food Network Canada, Lifetime, CMT, Cartoon Network, BBC Canada, HISTORY, Showcase, National Geographic, Disney Channel Canada, youth-oriented YTV and Nickelodeon Canada.

It is these properties that helped Corus see its TV segment revenue climb to $421.48 million, from $403 million, in fiscal Q3 2019.

As such, TV is a growing business for Corus, and that’s why the company’s C-Suite is speaking positively about the three months ended Nov. 30, 2019.

“Our solid Q1 results demonstrate the benefits of Corus’ diverse portfolio of businesses, with increased Television advertising revenues and double-digit revenue growth in our content business for the quarter,” said President/CEO Doug Murphy.

But, radio wasn’t even mentioned. And, that’s not good for a company that in the most recent Numeris ratings (August-November 2019) saw its Alternative CFNY-FM 102.1 “The Edge” in Toronto earn a paltry 2.2 share — continuing a trend that started fall 2013, when host Dean Blundell exited and listeners fled.

Making matters more difficult for The Edge: CIND-FM “Indie 88,” independently owned by Central Ontario Broadcasting and the home of such veterans as Josie Dye, in 2019 earned a power upgrade to 4kw from a downtown office tower. The result: record-high ratings of a 1.9 share in the most recent Numeris survey.

Meanwhile, CFMJ-AM “640 Toronto,” a News/Talk station competing against Rogers Media’s all-news CFTR-AM 680 and Bell Media Talk juggernaut CFRB-AM 1010, earned just a 1.8 share overall.

Then, there is Classic Rocker CILQ-FM “Q107,” a formidable player nevertheless challenged by Stingray’s Adult Hits CHBM-FM “Boom 97.3.”

This leaves Corus reliant on dominant stations in other markets to drive its radio operation. Among the biggest performers for Corus Radio is CFMI-FM “Rock 101” in Vancouver, top Country outlet CKRY-FM 105.1 in Calgary.

That said, Corus’ two Ottawa FMs are underperformers. Further, many of its stations are in smaller and mid-sized Canadian markets, where pressure from local digital is being felt just as it is for some U.S. radio broadcasters.

Corus EntertainmentFor Murphy, “The strong momentum from last year continues as we invest to position Corus for the future, advancing our strategic initiatives to diversify our revenues and deliver our premium video content in more ways within Canada and around the world.”

Nothing was said about its audio content.

Murphy continued, “Our data-driven selling approach is setting the new standard and providing innovative, client-centric solutions for our advertisers. Once again, our strong free cash flow enabled us to further reduce our bank debt and this, combined with our recently announced share buyback program and attractive dividend yield, is providing additional value to our shareholders.”

This puts individuals including Larry Gifford, the four-year National Director of Talk Radio, in the hot seat. Gifford joined Corus in May 2016 as Senior PD of CKNW-AM 980 in Vancouver and its all-traffic AM serving Canada’s largest Western market. He was previously in the U.S., as PD of Bonneville-run KTTH-AM & KIRO-FM in Seattle from 2011-2013 and, before that, as PD of ESPN Radio Los Angeles.

Another key Corus Radio executive is Byron Garby, who has headed National Sales for the division since joining from Zoomer Media in September 2015. Garby is the former GM and GSM of Boom 97.3 and CFXJ-FM “Flow 93.5.”

Even with the radio challenges, Corus’ overall story in fiscal Q1 2020 is that of growth. Its adjusted net income jumped to $79.98 million CDN (38 cents per share), rising from $70.11 million (33 cents).

 

— With reports from Carina Newton in Toronto and Adam Jacobson in Boca Raton, Fla.

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