Corus hit with $86.8M loss amid weak ad sales

Corus Entertainment Inc. says it’s working on an “extensive” plan to prepare for big changes in the Canadian TV landscape in the wake of new unbundling channel rules unveiled last month by the federal broadcast regulator.

“Our entire portfolio requires a complete review,” chief executive Doug Murphy told analysts on a conference call Thursday afternoon. However Murphy downplayed the impact of the CRTC’s new regulations, which begin to take effect March 2016, saying he doesn’t see “dramatic changes” to Corus’ business despite television distributors being forced to offer customers a “skinny basic” cable package for no more than $25 per month.

Customers will also have the freedom to add on individual channels or small bundles of channels under the “pick and pay” model.

Analysts and investors have considered Corus the most vulnerable under the new rules since Corus’ specialty channels including W Network and YTV are offered in current bundles from large broadcasters but are not expected to be part of the new “skinny basic” packages.

Corus shares fell $1.07, or 5.76 per cent, to close at $17.52 on the Toronto Stock exchange after the stock suffered its biggest one-day loss since 2001 of 11 per cent after the CRTC’s dramatic announcement.

“We do feel it’s been an exaggerated response,” Murphy said.

Corus also reported earlier Thursday that it had an $86.8-million net loss in its second quarter, mostly because of a writedown of the value of some of its assets and because it didn’t see an expected improvement in advertiser confidence. The company — which has one of Canada’s largest collections of specialty television channels and radio stations — said that it won’t meet one of the targets provided to investors in November, when it expected advertising demand would improve.

Corus said it was hit during the December-February quarter with “further economic headwinds” that affected ad market confidence.