TVA reports $14.7M loss in first quarter in wake of $800M NHL deal with Rogers

MON TR EA L • The cost of TVA Group’s NHL hockey broadcast rights agreement was a financial hit to the network as it reported a net loss of $14.7 million or 57 cents per share in the first quarter of 2015, ending March 31.

The Montreal-based company signed an $800-million deal in 2013 with Rogers Communications Inc. to broadcast NHL games over 12 years, starting with the current season.

“The NHL deal was an exceptional circumstance, but if we exclude that element, TVA is still profitable,” said TVA chief financial officer Denis Rozon at the company’s an- nual meeting Tuesday.

In the first quarter of 2014, TVA Group reported a loss of $10.2 million, or 43 cents per share. However, Rozon says the greater loss this year could be considered “artificial,” with about $65 million a year in programming costs still weighing on earnings.

“With our acquisitions, the next quarter could be a little suppressed, but we expect to see an improvement in the last quarter of 2015 or the first quarter of 2016 after a complete cycle of 12 months with NHL on TVA Sports.”

Chief executive Julie Trem- blay says TVA Sports had to absorb the full cost of its new programming while the growth in the subscriber base has “not yet reached its full potential.”

She says the subscription revenues of TVA Sports have more than quadrupled compared with the same quarter of 2014.

If we exclude that element (the NHL

deal), TVA is still profitable

Tremblay says advertising revenues are growing on the channel, and it has had more than two million viewers so far during Stanley Cup playoff games.

The consolidated revenues of TVA Group were $126.5 million for the first quarter of 2015, up 20 per cent from $105.3 million for the same period in 2014. This was done despite a four per cent decrease in the network’s overall advertising revenues.

Tremblay says TVA will try to move away from advertising dollars, instead focusing more on revenue from subscriptions. “Magazines and specialty channels will mean that relative importance of advertising revenue to TVA will become less important,” she said.

TVA’s magazine sector recorded an adjusted operating income of $938,000, a decrease of 57.1 per cent.

Operating revenues decreased by 11.1 per cent, which was partially offset by the company reducing it’s operating revenues by 3.4 per cent.

However, the results do not include the impact of the acquisition of 14 Trans

publications and three websites, as the $55.5-million transaction was completed April 12, after the first quarter.