RE:Great CIBC investor conference Heard call also Wilbury. Main take aways for me were rapid pay down of debt continues. $250 million in last year and on track to do that again this year. That is a huge amount of cash to pay down debt so rapidly.
Audience based buying over 20 percent in q4 was 16% in q3 and continues to grow. Sounds like everyone is partnering in Canada on these iniatives which is good since market here is smaller. Bell and Corus each have 35-40 percent market share. Rogers at 15% and CBC at 10%.
TV ad rebound continues. Pendulumn has swung back. The demise of traditional tv is premature. In call Murphy acknowledged that some think traditional media will be gone in 5 years. What people fail to see is how traditional media is changing to accomodate the new world. Talked about STack tv on amazon and how to reach those that never had cable or recenlty cut cable.
Content now at only 6% but they want to grow that to 25% in 5 years.
I get the sense the commentary on the regulatory issues and the piece Murphy wrote in National Post is really geared to foreign ownership rules changes that they are angling for. That is the diamond in the rough. All the other stuff about Canadian content etc and Netflix not doing Canadian content and they should is just noise.
Regulatory changes are coming as other countries dont have as strict restrictions as Canada. If they opened this up to foreign ownership your multiples all of a suddent become the going rate for media companies which is around 8 - 12 times ebitda now. Imagine if that were to come to pass what Corus would be worth than?? Upside here remains huge. Dont see CRTC maintaining status quo with Amazon, Netflix, Apple and all the other streaming providers on the horizon.
Corus ebitda this year is likely to come in at $3 a share. So I think $5.30 is still a pretty good buy price.