Shaw looks to unload Corus Entertainment

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Re: Shaw looks to unload Corus Entertainment

Postby jon » Sun Jun 17, 2018 9:09 pm

Corus scares me a bit. Although the Book Value is nearly double the Share Price, I keep reminding myself of the crazy prices that were paid for radio and television stations in the 1990s as a small number of large corporations were created through a bidding war for the majority of stations in this country. That is where the Book Value came from.

Although we have seen some big prices for major market stations in the last few years, the shortage of stations for sale would end abruptly if the Corus stations were sold individually, rather than all or most to a single buyer. As has been noted in this thread, finding anyone interested in buying such a large number of stations will be very difficult, especially given regulatory restrictions on number of stations owned and Canadian ownership requirements.

To me, Shaw looks like a safer investment bet than Corus right now, though you would have to wait a lot longer for Shaw to pay off, as it will take years to build up their Wireless business.
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Re: Shaw looks to unload Corus Entertainment

Postby paterson » Mon Jun 18, 2018 3:36 pm

I sometimes wonder if radio generally is healthier than we think. Corus Entertainment is on the block, and you could argue if their radio division was doing well they would keep the radio and unload the conventional television stations and specialty channels. Is it possible that in order to make the television division easier to sell or more attractive, they also have the 39 radio stations on the market as well?

Bell Media got into the radio business late in life (2007) when they acquired the CHUM Group. In 2010 purchased Astral Communications and all of their various TV and radio stations, and Bell also bought back the shares they had previously sold under BellGlobeMedia.

Almost overnight Bell went from having no radio stations to almost 100. And they are still acquiring (a few months back the 4 Larche Communication stations in Ontario). They currently operate 105 radio stations and are the largest radio broadcaster in Canada. And also into the mix is the relatively new arrangement with iHeartRadio. I can't see Bell Media being so aggressive if radio was a poor investment with low returns, or if radio was viewed as a dying media. Another great example is Stingray Digital purchasing all of Newcap's radio stations last month, pending CRTC approval. Stingray like Bell with become a major radio broadcaster very quickly.

For some reason I always felt that Bell would sell off the radio division in chunks to smaller regional broadcasters after they acquired CHUM and Astral radio. I wrongly assumed that radio would never be part of their core business, since they seemed much more focused on television content, specialty channels, on demand, digital platforms etc. Bell hasn't been backing off of radio at all. Makes me wonder if radio in Canada with all of it's watering down, cuts and downsizing is actually in better shape than other traditional media.

Newspapers whether weekly or daily have been shutting down, various small and medium sized television stations have either closed or simply turned into a rebroadcaster of larger stations. Rumours persist that CTV and Global are not profitable, with major cutbacks in national advertising similar to newspapers. Right now we have more radio stations than ever and the CRTC continues to license new commercial community stations in every province.
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Re: Shaw looks to unload Corus Entertainment

Postby dmehus » Mon Jul 16, 2018 1:14 pm

I think it'd be a more attractive asset if they got rid of the 'A' and 'B' shares and created a single class of stock, owned primarily by Canadians, since U.S. holders would be subject to a cap.

That said, I do fear what someone else said, that a private equity fund might come in and buy it using leverage then try to unload the even more highly levered entity onto the public markets again in a year or two.

I also agree that Shaw has "raped and pillaged" Corus Entertainment, especially by forcing Corus to buy their Shaw Media division that likely, in my view, wasn't in existing Corus 'B' shareholders "best interests." In short, Shaw likely breached its ethical and fiduciary responsibilities here. And now, Ms. (Christy) Clark is on that board and if she votes in favour of such a move, she, too, will be breaching her fiduciary responsibilities to Shaw's 'B' shareholders. :(

Ideally, I'd like to see Corus basically just surrender about three quarters of their specialty TV channel licenses that, I'd imagine, can't have any meaningful subscriber bases, possibly as part of a deal with the CRTC and/or the BDUs to reclassify some of their "core" specialty TV channels they'd keep as either "must carry" or remain optional to carry but bring on all, or nearly all, of Canada's BDUs. They could sell this business to PE or, ideally, IPO it; however, I'd also like to see them maybe spinoff Corus Radio as a separate publicly-traded subsidiary (any ideas on potential names!?) to existing Corus shareholders that are likely significantly underwater here. At least that way, if the slimmed down New Corus Speciality TV and Nelvana Entertainment company ends up in bankruptcy, they'll at least have some comfort that New Corus Radio is doing reasonably well and growing in tandem with GDP. :)

Cheers,
Doug
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Re: Shaw looks to unload Corus Entertainment

Postby dmehus » Mon Jul 16, 2018 1:24 pm

paterson wrote:I sometimes wonder if radio generally is healthier than we think. Corus Entertainment is on the block, and you could argue if their radio division was doing well they would keep the radio and unload the conventional television stations and specialty channels. Is it possible that in order to make the television division easier to sell or more attractive, they also have the 39 radio stations on the market as well?

Bell Media got into the radio business late in life (2007) when they acquired the CHUM Group. In 2010 purchased Astral Communications and all of their various TV and radio stations, and Bell also bought back the shares they had previously sold under BellGlobeMedia.

Almost overnight Bell went from having no radio stations to almost 100. And they are still acquiring (a few months back the 4 Larche Communication stations in Ontario). They currently operate 105 radio stations and are the largest radio broadcaster in Canada. And also into the mix is the relatively new arrangement with iHeartRadio. I can't see Bell Media being so aggressive if radio was a poor investment with low returns, or if radio was viewed as a dying media. Another great example is Stingray Digital purchasing all of Newcap's radio stations last month, pending CRTC approval. Stingray like Bell with become a major radio broadcaster very quickly.

For some reason I always felt that Bell would sell off the radio division in chunks to smaller regional broadcasters after they acquired CHUM and Astral radio. I wrongly assumed that radio would never be part of their core business, since they seemed much more focused on television content, specialty channels, on demand, digital platforms etc. Bell hasn't been backing off of radio at all. Makes me wonder if radio in Canada with all of it's watering down, cuts and downsizing is actually in better shape than other traditional media.

Newspapers whether weekly or daily have been shutting down, various small and medium sized television stations have either closed or simply turned into a rebroadcaster of larger stations. Rumours persist that CTV and Global are not profitable, with major cutbacks in national advertising similar to newspapers. Right now we have more radio stations than ever and the CRTC continues to license new commercial community stations in every province.


Well said, paterson. I think that's absolutely correct. I can't say I didn't expect Bell to keep their radio division, but in the back of my mind, I worried about them keeping only the "big city stations" and selling off the small- and medium-sized stations piecemeal, which, generally speaking, hasn't happened. That being said, I hate the current iHeartRadio streaming platform. They mandate use of their mobile or web-based app player and no longer provide functional direct streams to their ad-filled player. If they'd just get rid of the mandatory interstitial video ads before loading every stream, or refreshing the webpage, it wouldn't be half bad.

I think Corus Radio, whether on its own as a standalone publicly-traded company or bulked up with a partner, would be successful, but I do think they lack a certain "cohesion" that Newcap (soon-to-be Stingray Digital), Pattison, and Bell Media have. I tend to think their management needs a changeover (certain many on here would agree with that [under]-statement of the year!). I think they'd make a great pairing for Jim Pattison Broadcast Group to acquire, allowing him to expand east of Saskatchewan and/or Manitoba. It'd require some major divestitures, unless the CRTC boosted ownership caps, which I'd be in favour of on the AM side (potentially allowing 4 AMs and 2 FMs for a total of 6 per market) to try and re-stimulate attractiveness to the AM side of the radio dial. He could have his radio guys "cherry pick" which stations to keep and which to divest. Newcap/Stingray Digital, Vista Radio, My Radio, and others could certainly pick up the "spoils". Otherwise, I think a pairing with Vista Radio could potentially work well, giving them large market station access that they currently lack and it'd likely require less divestitures. Downside to that is I'm somewhat less inspired by Vista's current management expertise. ;)

Cheers,
Doug
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Re: Shaw looks to unload Corus Entertainment

Postby paterson » Mon Jul 16, 2018 9:11 pm

Thanks Doug. I agree about iHeartradio's streaming platforms. The websites are all similar, cheap looking and awkward to use. I would love to see The Jim Pattison Broadcast Group purchase some or all of the Corus radio division. Pattison radio would shake up the business here in the east. Generally I find most Pattison stations I have steamed to be easy to listen to with decent on air talent and local with a fair bit of audience involvement.

I have a few friends who work at Corus radio and generally they don't have too much bad to say about the company beyond the usual industry complaints. They indicated that the four Corus stations that they are involved with (Kitchener and Guelph) were doing well revenue wise. Anyway it will be interesting to see who makes a pitch for the radio division, they have some good stations.
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Re: Shaw looks to unload Corus Entertainment

Postby dmehus » Tue Jul 17, 2018 2:08 pm

paterson wrote:Thanks Doug. I agree about iHeartradio's streaming platforms. The websites are all similar, cheap looking and awkward to use. I would love to see The Jim Pattison Broadcast Group purchase some or all of the Corus radio division. Pattison radio would shake up the business here in the east. Generally I find most Pattison stations I have steamed to be easy to listen to with decent on air talent and local with a fair bit of audience involvement.

I have a few friends who work at Corus radio and generally they don't have too much bad to say about the company beyond the usual industry complaints. They indicated that the four Corus stations that they are involved with (Kitchener and Guelph) were doing well revenue wise. Anyway it will be interesting to see who makes a pitch for the radio division, they have some good stations.


Yeah, I agree with you regarding the better management at the Pattison radio stations. They have a way of making their websites have a similar user experience, but different interfaces, and then tying them together with a JP Broadcast Group logo in the footer and on the contact page. They also do tend to use social media for contests and audience participation more, though I think Newcap does this pretty well, too, and Vista would be in third. Vista is just sooo lean and tends to have too many hours with no DJ, just robotic playlists (not sure what the "radio term" for that is).

My only issues with Pattison are really local local:
  • They have some super annoying commercials, like the "Annnndreeeee's Electronic Experts...your electronic superstore!" jingle; and,
  • Power 104 (CKLZ-FM). Detest the "active/mainstream rock" format that they have. Would love to see them adopt a Classic Rock format to compete more with K96.3, but doubt I'll get my wish. They should also drop the CKLZ call letters and go with, say, CKPW (if that's not taken - Dan or jon would likely know) - something more appropriate.
. Locally, 103.1 The Beach is probably my favourite station, even though I liked the Q103.1 branding and format a bit better, when I'm not listening to something on Spotify or Summit FM's web stream (a good station owned by Clear Sky Radio in the Kootenays).

Cheers,
Doug
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Re: Shaw looks to unload Corus Entertainment

Postby groundskeeper willy » Tue Jul 17, 2018 3:18 pm

Sorry Doug, not sure I understand your reasoning for wanting Power to go Classic Rock in order to compete with K96? Last diary for the Kelowna market showed Power having twice the share of K96. If the stations were running neck-&-neck, or if K96 was a market leader, it would make sense to flip formats. But in reality, nope, not a chance, just doesn't make sense. I take it you've never worked in radio before, right?

Also, in this current age of homogenized branding (Virgin / Fresh / Hot / etc), the idea of having call letters that somehow vaguely align with the station name has become rather passe. Other than hardcore radio geeks, nobody outside of a station cares about call letters anymore, unless they're used as the actual branding, like CFOX.

Oh, and Andres is a provincial chain, those horrendous commercials pollute the airwaves in markets all over BC, not just Kelowna. It's like they've taken a page from the Spence Diamonds book on how to create advertising that becomes a tune-out factor for whatever station is airing the spot. I'm sure that Roy Williams (aka "The Wizard of Ads") would congratulate Andres on developing such an instantly recognizable brand, but would then seriously question its effectiveness in that it becomes a liability in the long run due to creating negative associations for the brand. All I know is that I'll never step foot in one of their stores simply due to the bad advertising.
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Re: Shaw looks to unload Corus Entertainment

Postby dmehus » Sat Aug 04, 2018 6:18 pm

groundskeeper willy wrote:Sorry Doug, not sure I understand your reasoning for wanting Power to go Classic Rock in order to compete with K96? Last diary for the Kelowna market showed Power having twice the share of K96. If the stations were running neck-&-neck, or if K96 was a market leader, it would make sense to flip formats. But in reality, nope, not a chance, just doesn't make sense. I take it you've never worked in radio before, right?

Also, in this current age of homogenized branding (Virgin / Fresh / Hot / etc), the idea of having call letters that somehow vaguely align with the station name has become rather passe. Other than hardcore radio geeks, nobody outside of a station cares about call letters anymore, unless they're used as the actual branding, like CFOX.

Oh, and Andres is a provincial chain, those horrendous commercials pollute the airwaves in markets all over BC, not just Kelowna. It's like they've taken a page from the Spence Diamonds book on how to create advertising that becomes a tune-out factor for whatever station is airing the spot. I'm sure that Roy Williams (aka "The Wizard of Ads") would congratulate Andres on developing such an instantly recognizable brand, but would then seriously question its effectiveness in that it becomes a liability in the long run due to creating negative associations for the brand. All I know is that I'll never step foot in one of their stores simply due to the bad advertising.


That's correct. I've never worked in radio and I realize that Power 104 may be successful for its format, but I think it stinks personally. I honestly don't know how it does so well! The songs they play are so hard core heavy metal/grunge-type music. :(

As for Andres, well said! I couldn't agree with you more and I think they're really over-priced. Andre's brother Rene, who used to be the City of Kelowna Fire Chief, is (or was, not sure if he still is) managing the "West Kelowna" location (technically, it's a Westbank First Nation location, which also includes Andre's Car Wash on site that falls under its auspices). I also will never forget how their store shoplifting prevention policies contributed to the death of a young man some 15 years ago or so when he attempted to steal a projector from their Kelowna store. :(

Cheers,
Doug
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