TV woes drag Torstar into the red for Q4

Firm writes down value of CTVglobemedia

TORONTO -- In the latest sign that Canadian broadcast TV is in crisis, newspaper and book publisher Torstar Corp. has written down the value of its minority stake in Canadian TV ratings leader CTVglobemedia by a third.

On Thursday, Toronto-based Torstar posted a fourth-quarter loss of CAN$211.2 million ($168 million), compared with a profit of CAN$47million in 2008. Revenue in the quarter ending Dec. 31 climbed to CAN$412.8 million ($413 million), against a year-earlier CAN$402.9 million.

Torstar swung to a loss after it wrote down the value of its 20% stake in CTVglobemedia by CAN$99.8 million ($78.8 million) to CAN$200 million ($159.3 million). CTVglobemedia operates the CTV network -- which secures the bulk of its revenue from such primetime U.S. series as the "CSI" franchise and "American Idol" -- a string of cable channels and the Globe and Mail newspaper.

Three years ago, Torstar paid CAN$376 million ($299.5 million) for its CTVglobemedia stake, an investment that has now nearly halved in value due to the recession and advertising downturn.

"With a significant cyclical shortfall in revenue, expectations for CTVglobemedia's bottom line were not met," Torstar CEO Rob Pritchard told financial analysts Thursday morning.

As it fends off the TV ad downturn, CTVglobemedia on Wednesday said it will close two loss-making broadcast stations in southwestern Ontario, rather than renew their licenses (HR 2/25).

Also Thursday, Ottawa said no to a bailout request from the Canadian Broadcasting Corp. as the public broadcaster deals with a projected CAN$65 million ($51.8 million) advertising revenue shortfall for its fiscal year, which ends March 31.

The CBC asked the federal government to forward money from its 2009-10 appropriation to offset collapsing TV ad sales.

The thumbs down from Ottawa opens the way for the public broadcaster to follow its private sector rivals and make possible job and programming cuts. A decision on possible cost-cutting will likely be made when the CBC board of directors meets in mid-March.