'Survivor 50' Courtesy of CBS Corus Entertainment, a major buyer of American series from major Hollywood studio suppliers, has moved a step closer to completing a recapitalization plan to stay in business.
Corus, led by CEO John Gossling, announced it had secured approval from the Ontario Superior Court of Justice to proceed with a debt for equity recapitalization plan. The capital restructuring that proposes exchanging senior unsecured notes for equity held by a new parent, NewCo, aims to reduce the debt load at Corus by over CAN$500 million (US$363 million), cut its annual interest expense by around CAN$40 million (US$30 million), extend debt maturity by five years and maintain access to a CAN$125 million (US$90.5 million) secured revolving credit facility.
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Corus draws Canadian primetime TV viewers with American series like the Survivor and NCIS franchises, the FBI, CIA and 9-1-1 series, and the History Channel, National Geographic, Adult Swim and Disney Channel brands.
The senior note holders will own 99 percent of the new parent company’s shares after completion of the capital restructuring, brought on by a continuing decline in linear TV advertising in Canada and hefty company borrowings. The proposed recapitalization transaction awaits further approvals by the CRTC, the country’s TV and telecom regulator, and the Toronto Stock Exchange.
“Corus continues to operate in the normal course of business with no changes to any obligations to its clients, suppliers, production partners, trade creditors or employees and looks forward to completing the recapitalization transaction,” the company said in a statement.
Corus, like other Canadian TV networks, has seen a dramatic drop in advertising revenues coming out of the pandemic and as a recessionary threat looms, while U.S. programming costs continue to climb. And increased cord-cutting has local players chasing viewers online with pricey American series to keep pace with Netflix, Prime Video and other U.S. streaming players increasingly dominant in the Canadian market.
And legacy Canadian networks like Corus face a greater impact from global media industry disruption since they lack the scale of the major studios and U.S. networks in the battle for survival and supremacy in the evolving streaming era.
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