Corus Entertainment expects to have completed a workforce reduction of 800 positions or 25% of full-time staff by the end of August as it continues to look for operational efficiencies.
Initially undertaken at the start of fiscal 2023, co-CEO and Chief Financial Officer John Gossling told a Q3 2024 Earnings Conference Call on Monday that the staff reductions are part of ongoing cost-cutting and liability management as the company’s share price continues to hover below the 20 cent mark on the TSX.
“Our board of directors has given us a clear mandate to decisively right-size the business and create a more sustainable future,” said Gossling, adding that tough decisions continue to be made to shutter areas of the business that can no longer be sustained and longer term development activities are paused.
That includes previously-announced measures to cease operating AM 730 (CKGO-FM) Vancouver and 880 News (CHQT-FM) Edmonton, cancel Global TV’s Big Brother Canada after 12 seasons, and end operation of OWN (Oprah Winfrey Network) under Corus effective Sept. 1.
“Corus’ future state needs to be a more sustainable business that will focus on core activities, unique brand positioning and areas that we can win,” added Gossling.
Co-CEO Troy Reeb said the network needs to redouble efforts to reduce legacy costs, not just in news, but in all areas of the business, including changing how Corus is regulated.
“We need to continue to be a prominent voice for the equitable treatment of Canadian broadcasters vs. not only the foreign streaming and internet giants, but also vs. Canadian distributors who compete with us for content rights at the same time as we negotiate with them for carriage of our services,” said Reeb, alluding to Rogers’ recent announcement it had scooped Warner Bros. Discovery brand and content licensing rights from Corus and Bell, starting in 2025.
Reeb clarified that as its agreements with Warner Bros. Discovery expire at the end of the year, impacting the HGTV, Food Network, The Cooking Channel and Magnolia channels Corus currently operates, it will continue to offer a slate of premiere lifestyle channels under new branding.
“Carriage deals are not contingent on program supply agreements,” asserted Reeb. “That means we intend to continue to operate Canada’s largest and most widely-distributed networks in the home and culinary genres under new brands and with new content across our traditional television and streaming portfolio.”
That new branding is expected to be unveiled in the next few months, with Reeb adding that 12 of the network’s Top 20 shows were Canadian originals, noting that hit series like The Property Brothers started out on W Network with Corus and later moved to HGTV Canada.
The company said its Q3 results reflect continued advertising disruption, with consolidated revenue of $332 million in the quarter, down 16% year-over-year. That was offset by a 15% decline in programming costs as well as an eight per cent reduction in administrative and general expenses.
Television segment revenue was down 17% for the quarter at $308 million, mainly driven by a 15% drop in ad revenue and a drop in subscriber revenue and episode distribution. Radio results reflect lower advertising demand with segment revenue of $24 million in the quarter, down 10% year-over-year.
Reeb said while there is generally lower advertising demand for traditional television amid an environment of expanded choice on the digital side and subsequent over-supply of digital inventory, Global News has bucked the downward consumption trend with a 3.5% increase in revenue and two per cent increase in total audience across linear and digital year-to-date as it implements substantial reductions in cost structure. He said interest from advertisers in local news has been a “bright spot.”
Corus shares were trading down following the earnings call at 15 cents.
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