Corus battens down the hatches by Grant Robertson
Source : Globe & Mail
Broadcasters are cutting costs, jobs as slowdown hits advertising revenues
November 20, 2008
Corus Entertainment Inc. has joined the growing list of broadcasters that are slashing costs amid a slowdown in advertising spending, following similar moves by CTV Inc. and CanWest Global Communications Corp. in recent days.
The owner of specialty television stations such as YTV, Treehouse and CMT stopped short of cutting jobs but has told staff that discretionary spending - from new cellphones to company Christmas parties - is being cut as advertising dollars dwindle in a tight economy.
Such measures are sweeping the corporate landscape as companies confront the reality of having to balance budgets in the face of a downturn that is expected to deepen in 2009.
"We are all aware of the challenges facing us in this unprecedented weak economy," Corus executives told staff. "We are confident that Corus Entertainment has the financial strength to manage through this difficult period. We must, however, be prudent with every single expenditure."
CTV met with employees yesterday to discuss its plans for cost cuts, after staff were told in a memo this week that a hiring freeze is being put in place, travel spending is being curtailed and some jobs will be eliminated.
CTVglobemedia Inc. chief executive officer Ivan Fecan told CTV staff that network executives will be assessing their budgets in the coming weeks to see where savings could be found. CTVglobemedia is the parent company of CTV and also owns The Globe and Mail.
Asked whether the cost cutting would affect CTV's plans for broadcasting the 2010 Olympics in Vancouver, Mr. Fecan said no.
Last week, CanWest said it is cutting 560 jobs, including 210 at its broadcasting operations, such as Global Television, E! and several specialty channels.
The media sector in North America is bracing for one of its deepest slumps in decades. Corus said in its memo that hiring is being put on hold as well. "All other business expenditures will be closely scrutinized."
In addition to a national network of radio stations, Corus operates specialty-TV channels that are more insulated from a downturn because most of their revenue is derived from subscriber fees.
CTV and Global are more exposed to declines in the ad market, and that has led both of them to spend heavily to acquire more specialty channels in the past two years.
Among the most troublesome concerns hanging over the ad market today is the possibility that one or more of the Detroit auto makers could falter. Car manufacturers are among the most aggressive advertisers in broadcasting and in print.
Banks have continued spending on advertising to maintain their brands in the financial crisis, but worries about the auto sector - along with retail products - are the primary worry for media companies.
"The worldwide financial situation is causing sharp decreases in advertising spending and even the potential bankruptcy of some of our single biggest customers," Mr. Fecan said in CTV's memo.
© Globe and Mail
The owner of specialty television stations such as YTV, Treehouse and CMT stopped short of cutting jobs but has told staff that discretionary spending - from new cellphones to company Christmas parties - is being cut as advertising dollars dwindle in a tight economy.
Such measures are sweeping the corporate landscape as companies confront the reality of having to balance budgets in the face of a downturn that is expected to deepen in 2009.
"We are all aware of the challenges facing us in this unprecedented weak economy," Corus executives told staff. "We are confident that Corus Entertainment has the financial strength to manage through this difficult period. We must, however, be prudent with every single expenditure."
CTV met with employees yesterday to discuss its plans for cost cuts, after staff were told in a memo this week that a hiring freeze is being put in place, travel spending is being curtailed and some jobs will be eliminated.
CTVglobemedia Inc. chief executive officer Ivan Fecan told CTV staff that network executives will be assessing their budgets in the coming weeks to see where savings could be found. CTVglobemedia is the parent company of CTV and also owns The Globe and Mail.
Asked whether the cost cutting would affect CTV's plans for broadcasting the 2010 Olympics in Vancouver, Mr. Fecan said no.
Last week, CanWest said it is cutting 560 jobs, including 210 at its broadcasting operations, such as Global Television, E! and several specialty channels.
The media sector in North America is bracing for one of its deepest slumps in decades. Corus said in its memo that hiring is being put on hold as well. "All other business expenditures will be closely scrutinized."
In addition to a national network of radio stations, Corus operates specialty-TV channels that are more insulated from a downturn because most of their revenue is derived from subscriber fees.
CTV and Global are more exposed to declines in the ad market, and that has led both of them to spend heavily to acquire more specialty channels in the past two years.
Among the most troublesome concerns hanging over the ad market today is the possibility that one or more of the Detroit auto makers could falter. Car manufacturers are among the most aggressive advertisers in broadcasting and in print.
Banks have continued spending on advertising to maintain their brands in the financial crisis, but worries about the auto sector - along with retail products - are the primary worry for media companies.
"The worldwide financial situation is causing sharp decreases in advertising spending and even the potential bankruptcy of some of our single biggest customers," Mr. Fecan said in CTV's memo.
© Globe and Mail
