Rumours of mainstream media’s demise aren’t exaggerated. In fact, they’re picking up pace.Toronto-based media giant Corus Entertainment on Monday said it expects to have laid off 25% of its full-time workforce — or more than 800 positions — by the end of the month.That’s on top of the 500 it had previously cut to the end of May.It comes as the broadcaster racked up more than $1.1 billion in losses in its fiscal third quarter or nearly double last year. Television revenues were down more than 17% while radio revenue slipped about 9.9%.Corus attributed the drop to the lingering effects from the Hollywood writer’s strike earlier this year that delayed new programming, along with “inflationary and competitive” challenges..“We're making tough decisions to shutter areas of the business we can no longer sustain and pause longer term development activities while we implement efficiency initiatives," said co-chief executive John Gossling during a conference call with analysts. "Our plan is to emerge as a smaller but more profitable business with a sustainable future."The company has been steadily reducing head counts for at least the past three years but the pace has accelerated in recent quarters.In May, the CRTC granted the company a request to ease some of its Canadian content requirements after it warned of an increasingly dire financial situation. The regulator justified the move on the grounds that a Corus bankruptcy "would greatly reduce the options Canadian viewers have for content.".Then last month, the company was hit by the loss of rights to key brands like HGTV, Food Network, Cooking Channel, Magnolia Network and the Oprah Winfrey Network to rival Rogers.In conjunction with the results announcement, Corus said it may soon breach its debt covenants as soon as September and issued a so-called “going concern” warning — required by securities exchange authorities — that it may essentially be forced to shut down.The debt concerns “cast significant doubt about the company’s ability to continue as a going concern, and therefore the Company may be unable to realize its assets and discharge its liabilities in the normal course of business,” it said in a filing. .Analysts said it doesn’t expect an industry-wide recovery anytime soon. Other companies like Bell Media have been cutting staff and reducing programming, but these are the biggest to date.“We don’t expect trends in TV revenues to reverse in the coming months and hence we expect Corus to push further deep cuts in order to protect the balance sheet,” Scotiabank analyst Maher Yaghi wrote in a note to investors Monday.
Rumours of mainstream media’s demise aren’t exaggerated. In fact, they’re picking up pace.Toronto-based media giant Corus Entertainment on Monday said it expects to have laid off 25% of its full-time workforce — or more than 800 positions — by the end of the month.That’s on top of the 500 it had previously cut to the end of May.It comes as the broadcaster racked up more than $1.1 billion in losses in its fiscal third quarter or nearly double last year. Television revenues were down more than 17% while radio revenue slipped about 9.9%.Corus attributed the drop to the lingering effects from the Hollywood writer’s strike earlier this year that delayed new programming, along with “inflationary and competitive” challenges..“We're making tough decisions to shutter areas of the business we can no longer sustain and pause longer term development activities while we implement efficiency initiatives," said co-chief executive John Gossling during a conference call with analysts. "Our plan is to emerge as a smaller but more profitable business with a sustainable future."The company has been steadily reducing head counts for at least the past three years but the pace has accelerated in recent quarters.In May, the CRTC granted the company a request to ease some of its Canadian content requirements after it warned of an increasingly dire financial situation. The regulator justified the move on the grounds that a Corus bankruptcy "would greatly reduce the options Canadian viewers have for content.".Then last month, the company was hit by the loss of rights to key brands like HGTV, Food Network, Cooking Channel, Magnolia Network and the Oprah Winfrey Network to rival Rogers.In conjunction with the results announcement, Corus said it may soon breach its debt covenants as soon as September and issued a so-called “going concern” warning — required by securities exchange authorities — that it may essentially be forced to shut down.The debt concerns “cast significant doubt about the company’s ability to continue as a going concern, and therefore the Company may be unable to realize its assets and discharge its liabilities in the normal course of business,” it said in a filing. .Analysts said it doesn’t expect an industry-wide recovery anytime soon. Other companies like Bell Media have been cutting staff and reducing programming, but these are the biggest to date.“We don’t expect trends in TV revenues to reverse in the coming months and hence we expect Corus to push further deep cuts in order to protect the balance sheet,” Scotiabank analyst Maher Yaghi wrote in a note to investors Monday.
