Corus Entertainment Inc. says it has struck a deal to buy the specialty television services Drive-In Classics and SexTV from CTVglobemedia.
The $40 million transaction is subject to approval by the Canadian Radio-television and Telecommunications Commission.
“These services are currently available in over two million households and provide a great base to grow their audiences and increase their appeal to our advertising customers,” John Cassaday, president and CEO of the Toronto-based company, said Tuesday.
Corus is a market leader in specialty television and radio with additional assets in pay television, advertising, TV broadcasting, children’s book publishing and children’s animation.
CTVglobemedia has been streamlining its operations in recent months to deal with a sluggish advertising market that has hurt its conventional TV business.
Corus released its financial results a day after announcing the purchase.
A $175-million impairment charge against its struggling radio division dropped the company to a third-quarter loss of $145 million, reversing year-earlier profits of $37.7 million.
The broadcaster said Wednesday its loss amounted to $1.81 per share for the quarter ended May 31, versus earnings of 45 cents per share in the year-earlier period.
Corus attributed much of the loss to the impairment charge, which was related to goodwill and broadcast licenses at the radio business.
Quarterly revenue fell 6% to $195.4 million compared to $207.8 million booked the year before. The revenue decline was most pronounced in the radio division, which reported a 15% dip in its topline performance and 35% in its segment profit.
The television sector fared better, with revenues sliding 1% and segment profit falling by 5%.
“We continue to position our company for growth in an improving economy,” Cassaday said in a statement. “The acquisition of two digital networks, our ratings strength in television and radio, our successful launch of HBO Canada and its influence on pay TV growth and the global expansion of [action-adventure series] Bakugan are all indicators of the underlying strength of Corus’s assets.”
