CANADA

Corus Entertainment stock plunges over 20% to new 52-week low

Jeff Lagerquist
Tue, June 11, 2024 

The Corus logo inside Corus Quay in Toronto is photographed on Friday, June 22, 2018. Corus Entertainment Inc. is cutting its quarterly dividend.THE CANADIAN PRESS/Tijana Martin (The Canadian Press)

Corus Entertainment (CJR-B.TO) shares sank to a new 52-week low on Tuesday as analysts predict the loss of content from Warner Brothers Discovery could cost the Canadian media company over $150 million in lost revenue next year.

Last week, Toronto-based Corus announced that some of its programming and trademark arrangements with Warner Brothers Discovery will not be renewed in 2025. The change will mainly impact five of the company’s channels, including HGTV Canada, Food Network Canada, Magnolia Network, Oprah Winfrey Network, and Cooking Channel Canada. Corus channels Adult Swim, Cartoon Network, and Boomerang also broadcast content from Warner Brothers Discovery.

On Monday, larger rival Rogers Communications (RCI-B.TO) announced multi-year deals with NBCUniversal and Warner Brothers Discovery. In 2025, Rogers plans to carry Warner Brothers Discovery’s English-language lifestyle and factual content on its network.

Toronto-listed Corus shares fell as much as 21.7 per cent in early trading on Tuesday, setting a fresh 52-week low for the battered stock, which has dropped nearly 75 per cent in the last 12 months.

CIBC Capital Markets analyst Scott Fletcher downgraded Corus shares to “underperformer” from “neutral,” while slashing his price target from $0.85 per share to $0.25. He estimates the programming Corus is set to lose could result in as much as $150 million in lost revenue next year, and $40 million in lost profit.

Corus generated $1.51 billion in annual revenue in the fiscal year 2023, and an adjusted profit of $334 million.

“With Corus already facing the pressure of a declining advertising market, the additional hit to revenue calls Corus’ financial future further into question,” Fletcher wrote in a note to clients.

Drew McReynolds at RBC Capital Markets also lowered his price target from $1.25 per share to $0.50, while maintaining a “sector perform” rating.

“We have decreased our target multiples to reflect the higher risk profile associated with the step-back in earnings visibility against the backdrop of a still sluggish television advertising market and elevated leverage,” he noted in a report.

Citing Canadian Radio-television and Telecommunications Commission specialty channel data, McReynolds says the five Corus channels impacted by the loss of Warner Brothers Discovery content generated about $155 million in regulated revenue in 2022.

Pressure on Canada’s telecom sector has risen in recent months due to the impact of higher interest rates on consumers and heightened competition. Shares of Rogers and Bell Canada owner BCE (BCE.TO) have fallen significantly since early 2024.
Rogers Communications Inc. (RCI-B.TO)

For CIBC Capital Markets analyst Stephanie Price, that’s created a buying opportunity for the latter company. In a note to clients last month, she said concerns about competition, interest rates and free cash flow growth have been priced into the stock. That prompted a rating boost from “neutral” to “outperformer,” with a $52 per share price target.

“While we acknowledge the difficult competitive environment and the role of rates in telecom valuations, BCE appears attractive at current levels relative to the group," Price wrote on April 22.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.


Rogers scoops rights to HGTV, Food Network, Discovery and more from Corus, Bell

Alex Nino Gheciu
Mon, June 10, 2024 

The Canadian Press


TORONTO — Rogers Communications Inc. has scored "milestone" multi-year deals that will see it scoop the Canadian rights to several lifestyle brands from Corus Entertainment and Bell Media in the new year, including HGTV, Food Network and Discovery.

The media giant said Monday that starting in January, Rogers will be home to several Warner Bros. Discovery lifestyle brands including HGTV, Food Network, Cooking Channel, Magnolia Network and OWN — currently held by Corus — and the brands Discovery, Motor Trend, Science, Animal Planet and I.D., currently held by Bell.

Rogers also said it will bring NBCUniversal’s Bravo channel to Canada in September, making it the rights holder north of the border for titles including reality TV mainstays "The Real Housewives," "Vanderpump Rules" and "Top Chef."

Colette Watson, president of Rogers Sports and Media, called the deals a "milestone long-term content partnership."


The news comes after Corus revealed a fall/winter lineup last week that added Pamela Anderson's "Pamela's Cookin' With Love" to Food Network Canada and Bryan Baeumler's “Building Baeumler” to HGTV Canada. New seasons from HGTV Canada personalities Sebastian Clovis, Scott McGillivray, Debra Salmoni and Randy Spracklin were also announced.

Troy Reeb, Corus' executive vice president of networks and content, said programming and brands on several of the lifestyle properties acquired by Rogers are "anticipated to be impacted" in the new year. He added that Corus' rights to Adult Swim and Cartoon Network won't be affected.

Corus announced last week that it had been informed by Warner Bros. Discovery that some of its programming and trademark arrangements would not be renewed when they expire at the end of the year.

Bell did not immediately respond to a request for comment.

At a virtual event for media and advertisers Monday afternoon, Watson said this is "truly a transformational year" for Rogers and that the investment helps the company compete with foreign streamers.

Rogers said it will work with Canadian distribution partners to make the content widely available.

This report by The Canadian Press was first published June 10, 2024.

Companies in this story: (TSX:RCI.B, TSX:CJR.B)

Alex Nino Gheciu, The Canadian Press