The parent company of Global News saw its stock price hit 12 cents on Tuesday.
On the verge of becoming a penny stock, Corus Entertainment has fallen from its peak stock price of $25.16 on Mar. 8, 2013 — a decrease of 99.52% in a little over a decade.
The company announced in a press release that its shareholders suffered a net loss of $769.9 million in the third quarter of 2024 and $747 million so far this year.
“The third quarter results reflect the ongoing impacts of a challenging advertising environment,” said Troy Reeb, co-chief executive officer who began his career with Corus 25 years ago as a political journalist.
Corus’ former CEO retired in Jun. and was replaced by Reeb and John Gossling, with the latter also continuing on as chief financial officer.
“As part of our mandate as co-CEOs, we are decisively reducing more costs and taking actions to right-size our business given the realities of our operating environment,” said Gossling. “We have made difficult decisions to part with certain legacy assets and are identifying additional opportunities to streamline our business with the aim of improving profitability. We are also working with the Board to develop a comprehensive plan to strengthen the balance sheet and manage liabilities.”
As of May 31, 2024, Corus Entertainment owns almost $1.6 billion in assets, over $1 billion less than the nearly $2.75 billion they had in assets on Aug. 31, 2023.
However, the organization has nearly $1.9 billion in liabilities, lowering slightly from almost $2.3 billion as of Aug. 31, 2023.
The difference in assets and liabilities resulted in a deficit of around $311 million.
Corus suffered the recent forfeiture of key programming rights to Warner Bros Discovery Inc., which will transfer to Rogers Communications Inc. when the current deal expires on Dec. 31. The channels affected, including HGTV, The Food Network, and the Cooking Channel, which have been significant revenue drivers for Corus.
Analysts have predicted that the Corus Entertainment stock could fall lower, with some suggesting it could fall as low as one cent.
During Corus’ third quarter earnings conference call on Monday, Gossling said the company expects to reduce its workforce by 25% by Aug., or 800 jobs less than Sept. 2022. As of May, Corus has already let go of 500 employees.
He added that two legacy radio stations will cease operations in Vancouver and Edmonton. Global TV’s Big Brother Canada has not been renewed after 12 seasons, and the Oprah Winfrey Network will cease operations under Corus effective Sept. 1, 2024.
“Our priorities are to aggressively cut costs and manage our liabilities. We are making tough decisions to shutter areas of business we can no longer sustain and pause longer term development activities, while we implement efficiency initiatives to further strengthen assets with more growth potential,” said Gossling.
Bell Media’s parent company slashed 9% of its workforce back in Feb. They placed much of the blame on the Canada Radio-television Telecommunications Comission for implementing regulations. Bell Media sold 45 of its 103 regional radio stations, and 4,800 employees were affected.
Despite the CBC similarly announcing recent layoffs amid struggling viewership, they recently announced more executive bonuses.
Reeb said that local news is “very challenged” in small markets.
“There was a time when a local television station could have a good hold on the local advertisers in the market. Now, local advertisers can go to literally hundreds of other options. And, of course, Google and Facebook have driven very hard into the local advertising space,” he said.
He added that to date, Corus’ restructuring efforts have been focused on the small markets and will continue to be.
Despite the challenges of local content, Reeb said that Corus’ national news has done well and operated as a growth engine for the company.
“There are sort of two stories when it comes to news and (they) both rely on some really innovative thinking to take costs out of the overburdened local television space and put it into a place where we can operate news at scale,” he said.
Gossling said that the company is taking significant actions to bring Corus to a “smaller, more sustainable state while addressing our debt levels.”
