(Toronto) Corus Entertainment says it expects to have reduced its full-time workforce by 25 per cent by the end of next month compared to the start of its 2023 fiscal year, as the company continues to “aggressively reduce costs.”
The job cuts, which amount to about 800 positions, come during a turbulent year for the Toronto-based television and radio station, which has struggled with falling advertising revenue, regulatory challenges and licensing battles.
On Monday, Corus reported a loss attributable to shareholders of $769.9 million in its latest quarter, compared with a loss of $495.1 million a year earlier, as revenue fell 16%. The company’s third-quarter revenue was $331.8 million, compared with $397.3 million a year earlier.
Television revenue fell 17% to $308.2 million in the quarter from $371.2 million a year earlier, while radio revenue slid 9.9% to $23.6 million from $26.2 million a year earlier.
“We are making difficult decisions to close areas of the business that we can no longer support and to suspend long-term development activities while we implement efficiency initiatives,” co-CEO John Gossling said on a conference call with analysts.
“Our plan is to become a smaller, more profitable company with a sustainable future,” he added.
Corus attributed this year’s advertising slowdown in part to the lingering effects of Hollywood strikes in 2023 that delayed production of key shows, as well as inflationary and competitive challenges.
The agreement between Rogers and Warner
In May, Canada’s broadcasting regulator granted the company’s request to relax some of its Canadian content spending requirements after warning of an increasingly dire financial situation. The Canadian Radio-television and Telecommunications Commission (CRTC) noted that the risk of Corus leaving the Canadian broadcast landscape “would significantly reduce the content options available to Canadian viewers.”
Then last month, the company was hit with the loss of rights to key brands including HGTV, Food Network, Cooking Channel, Magnolia Network and OWN, at the end of this year.
This comes as Rogers Communications signed a multi-year agreement with Warner Bros Discovery for its popular lifestyle and entertainment brands in Canada starting on January 1.er January.
Rogers is also set to take over Bell Media’s Canadian programming rights for television channels such as Discovery Channel Canada, Discovery Velocity, Discovery Science and Animal Planet.
Corus announced shortly after that Doug Murphy was retiring from the top job and that Mr. Gossling and his colleague Troy Reeb had been named co-CEOs.
Mr. Reeb told analysts that Corus intends to continue providing culinary and lifestyle content under new television channel brands following the Warner Bros.-Rogers deal.
He said the company was exploring “all legal and regulatory remedies” in response to the deal, noting that “our intention is to do what we must do to protect our business.”
Mr. Reeb and Mr. Gossling declined to provide further details, such as whether Corus would follow Bell Media’s lead in seeking an injunction to prevent the broadcast of Warner Bros. Discovery content when Rogers becomes the rights holder.
“I don’t think we want to reveal the overall strategy at this stage, but […] “Don’t assume that the only line of defense is through the regulator,” Gossling said.
The company said its loss was $3.86 per share for the quarter ended May 31, compared with a loss of $2.48 per share in the same quarter last year.
On an adjusted basis, Corus said it lost 10 cents per share in the quarter, compared with an adjusted profit of 9 cents per share a year earlier.
The company’s shares slid more than 20 percent on Monday, closing at 15.5 cents on the Toronto Stock Exchange.
RBC analyst Drew McReynolds said in a note that “given the continued challenging operating environment,” Corus shares are likely to remain “under pressure.”
As part of Corus’ plan to cut costs, Reeb said the company’s news arm will “continue to drive industry-leading efficiency efforts” while relying on digital technology to continue creating local content.
He said the company must “redouble its efforts to reduce traditional costs, not just in information, but in all areas of the business.”
“At Corus, we are fortunate to have a great legacy within our brands,” he said. “But that doesn’t mean we also have to bear the existing cost structures.”