BCE's Fourth-Quarter Results Hit by TV Asset Write-Down

Bell Media invested heavily in streaming rights to U.S. series from HBO, including 'The Sopranos'

The Canadian phone giant faced higher U.S. series costs from HBO, Showtime and other studio suppliers to battle Netflix with upstart SVOD.

Canadian phone giant BCE on Thursday reported fourth-quarter financials that beat analyst estimates, but TV revenues fell amid higher sport rights and U.S. network series costs to stop subscribers defecting to Netflix Canada.

Bell Canada also wrote down the value of its top-rated conventional TV assets by CAN$95 million (US$76.5 million) due to a soft Canadian advertising market and higher regulatory costs. The Montreal-based phone giant posted a quarterly profit of CAN$542 million (US$435.4 million), up 9.5 percent from a profit of CAN$495 million in 2013, as overall revenues rose 2.6 percent to CAN$4.94 billion (US$3.96 billion).

Bell signed up 117,000 new wireless phone subscribers during the latest quarter as it battles rival Rogers Communications in the mobile market. But revenues from its Bell Media division, which includes radio and TV channels, fell 4 percent to CAN$789 million (US$634 million), and adjusted EBITIDA slid 16.5 percent to CAN$192 million (US$154.2 million).

Those falls were due to higher sport rights costs for the TSN and RDS cable sports channels and CAN$20 million (US$16 million) in non-recurring revenue from Q4 2013. Bell Media also invested heavily in streaming rights to popular U.S. series from HBO, Showtime and other U.S. studio suppliers to launch its CraveTV SVOD against Netflix Canada in December 2014.

"It's the right positioning for this company as we go forward with that asset," BCE president and CEO George Cope told analysts about its upstart SVOD during a Thursday call. Shares in BCE rose $1.36, or 3 percent, to US$48.17 during morning trading on the New York Stock Exchange.

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