Corus cancels Upfronts, says Q4 programming unclear

The company also announced its Q2 revenues, which due to timing were essentially unaffected by the COVID-19 pandemic.

Corus Entertainment on Wednesday reported huge growth in TV ratings since the outbreak of COVID-19, but said it remains unclear how effectively broadcasters will be able to monetize these audiences.

Across its portfolio of conventional and specialty assets, Corus said overall viewership is up 23% over the past two weeks, compared to the earlier part of the spring season. Within that, viewership on conventional net Global is up 41%, while viewership on Global News is up 51%. Meanwhile specialty services have seen an 18% uptick and Corus’ kids channels have seen a 25% increase.

“Despite massive growth in viewership during the COVID-19 crisis, it is difficult at this time to determine how effectively we can monetize these audiences,” said president and CEO Doug Murphy as “advertisers hit the brakes and retool their messages.”

Murphy, who spoke at the release of the Fiscal 2020 second quarter results, added that Corus anticipates a “material disruption” to advertising revenues while the pandemic-related restrictions across the country remain in place.

Corus cancels Upfront as it implements cost-management strategies

As it looks to weather the storm of the COVID-19 pandemic, Corus also said it has introduced a number of immediate steps to manage its cost structure, including the cancellation of its annual Upfront presentation and a hiring freeze.

In addition, Murphy said Corus is advocating for relief measures for the broadcast and production industries. Earlier in the week, the federal government and CRTC said they will waive the payment for Part I license fees for the 2020-21 fiscal year – an initiative that will free up around $30 million across the entire broadcasting sector. Corus CFO John Gossling noted the waiving of the fee will give about $2 million in monetary relief to Corus.

Murphy said there are active discussions surrounding other regulatory issues that have arisen due to the COVID-19 outbreak. Namely, a reduction in Canadian production expenditure (CPE) requirements for Canadian broadcasters in this fiscal year.

“In a practical manner, there’s no way we can spend the money we have to spend this year, given the shutdown of production,” said Murphy. He added that, based on discussions he has had with relevant parties, “measures should be revealed in the coming weeks that would be mindful of the pressure that the broadcast and production sectors are under.”

Q3 programming schedule set; beyond that remains unclear

Since the international production shutdown began during mid-March, many have wondered how it will impact the programming schedules for broadcasters both at home and abroad.

Corus execs said its Q3 schedule is “locked and loaded” and will not be affected in any significant way by the suspension and postponement of productions. Looking ahead to Q4, however, Murphy said the broadcast industry finds itself in a “jump ball” situation and said it remains unclear what the impact will be on the entertainment industry’s programming and content supply chain.

One potentially positive impact, he noted, is that Corus has seen an uptick in interest for Canadian programming from U.S. networks looking to populate their own schedules in the months ahead.

“The phone is ringing quite a bit from U.S. buyers saying ‘I need content,’” he said.  “We’re seeing some content licensing business popping up out of nowhere, that is an opportunity for us.”

Q2 results

Corus also on Wednesday revealed its financial results for the second quarter (ended Feb. 29), with year-over-year revenue for TV and radio falling to $376 million, down 2% from $384.1 million in Q2 of 2019.

That dip was partly attributable to a 2% decrease in TV revenues, which fell to $347.8 million, from $353.5 million the year prior. Within its TV business, advertising revenues decreased by 6% in Q2, while subscriber revenues were down 2%. Merchandising, distribution and other revenues increased by 50% to $8.3 million in Q2.

Profit climbed to $115.5 million in Q2, up 2% from $113.7 million a year ago.

On the radio side, revenue dipped to $28.2 million in Q2, down $30.6 million a year ago.

Murphy added that he felt Corus is well positioned to weather the business challenges created by the COVID-19 crisis.

“We are working tirelessly on business continuity measures that not only enable us to continue delivering programming across our networks, but ensure we are positioned to return to normal operations when the situation warrants it,” he said.

The company is delaying a decision on paying a quarterly dividend until, at latest, June 9, when it is expected to have more clarity on how the pandemic has impacted business.

This story originally appears in Playback.