Astral Media Has Bullish Outlook Ahead of $3.38 Billion Takeover
Company topper Ian Greenberg tells analysts falling ad revenue and subscriber fees is "cyclical" as he gets set to end 50-year control of Canadian media group by his family.
TORONTO – With Canada's Astral Media about to taken over by phone giant BCE for $3.38 billion, company CEO Ian Greenberg wasn’t about to turn bearish Thursday as he addressed financial analysts, likely for the last time.
Greenberg, whose family controlled the Canadian pay, cable TV and radio broadcaster for 50 years before deciding to cash out, said a third quarter revenue slip due to a weak advertising market and falling subscriber fees was only an aberration.
Despite difficult market conditions, the Astral Media topper maintained his bullish outlook.
“When we see a comeback in Q4, we can be confident it’s strictly cyclical. Whether in radio or TV, there’s a tremendous future for growth,” Greenberg told analysts after Astral Media saw profits jump three percent to $51.2 million during the three months to May 31, even as combined revenue slipped one percent to $265.5 million.
Rival broadcaster Corus Entertainment also unveiled similar Q3 results Thursday in a tough advertising market, as earnings rose seven percent to $43.2 million, on overall revenue sliding four percent to $204 million.
Analysts probed Greenberg to see if other factors than a free preview period for The Movie Network, including competition from Netflix Canada or other U.S. digital platforms, explained the pullback in pay TV subscribers during the latest quarter.
Greenberg said Astral Media also lost pay TV subscribers in the third quarter of 2011, and in Q4 as well, but will compensate in the upcoming fourth quarter by adding subscribers.
To boost the appeal of The Movie Network and HBO Canada, Astral Media is also on course to launch its HBOGo streaming product in the first quarter of 2013.
The CRTC, Canada's TV watchdog, is expected to approve the Astral Media takevoer by BCE in October.