TVA Group's publishing operations slip 16% in Q2 on lower newsstand and ad sales

Quebecor Inc.'s publishing division TVA Group Inc. saw publishing revenues in Q2 fall to $2.6-million from a $3.1-million the year before, on lower newsstand sales and advertising revenues. Operating income for the publishing side was down $450,000.

Over all, however, TVA Group saw its Q2 profit almost double based largely on a 54¢-per-share gain from the sale of its 51 per cent stake in The Cave and 50 per cent stake in Mystery TV. Net income was $23.7-million, or $1 per share — up from $13.8-million, or 58¢ per share, in the same quarter of 2011a s in two specialty television services. Revenue fell slightly to $115.4 million from $117.5 million

TVA Group had posted a Q1 net loss of $39.3 million because of an impairment charge related to greatly increased Quebec government fees for waste recovery services.

President and CEO Pierre Dion Dion said the print divison continues to look for ways to reduce costs and find new business.

 “The growth of the TVA Studio division, which specializes in customized publishing, commercial printed productions and premedia services, augurs well for the expansion of this line of business in the coming quarters,” he said.

Media (including magazines) ad losses blamed for Transcontinental impairment charge

Despite revenue increasing 6% to C$529.4 million, Transcontinental Inc. posted a quarterly loss of C$106.2 million in the most recent quarter, compared with a net income of C$32 million in the same quarter a year ago, effectively a reversal of C$139. As a result, says a Reuters report,  the company took a non-cash, non-operational impairment charge of $180 million. The loss is attributed to a broad slump in advertising spending in the TC Media unit, which publishes daily and community newspapers and magazines and French-language educational resources.

ZoomerMedia has a net loss in Q2 of $137,000

ZoomerMedia Ltd., the publishers of Zoomer magazine, had a net loss in the second quarter of $136,439 for the period, a negative turnaround of more than $1 million, compared with a profit of $901,464 in the same quarter in 2010, it was reported today by Canadian Press. The company had revenues of $15.3 million, down from $16.9 million in the same quarter in 2010.

The Toronto-based company's properties include multi-faith specialty channel Vision TV, classical radio station CFMZ-FM in Toronto, Zoomer Magazine, and website 50plus.com.

Rogers media arm saw 15% increase in revenue and 12% profit increase in first 6 months

The media division of Rogers Communications Inc. saw a 15% increase in operating revenue and a 12% increase in operating profit in the first six months of 2011 compared with the same period a year ago, according to information released from the company. (The media division includes publishing , sports entertainment, radio and digital media. Magazine results are not broken out.) Six-month operating revenue for the division was $776 million and profit was $67 million.

The company attributed the improved results to increased advertising sales and new subscriber fees, noting that there was a slight decline in revenues from The Shopping Channel.

Over all, Rogers reported $6.1 billion in revenues and net income of $890 million for the six months ended June 30.Wireless contributes about 57% of over all revenues, cable 31%, media about 12.7%.

Zoomer Media six-month results show $2.8 million turnaround, net income $1.1 million

Zoomer Media, the parent company of Zoomer magazine has announced that its first half results for the period ended December 31 showed revenues of $31.2 million and expenses of $27.3 million resulting in income before depreciation, amortization and interest of $3.9 million. Net income for the period was $1.1 million. For the comparable six month period in the previous year, the Company had revenues of $5 million and expenses of $6 million for a loss before depreciation, amortization and interest of $1 million. The net loss for the period was $1.7 million.
Second quarter revenues to end December 2010 were $16.9 million and expenses of $14.4 million resulting in income before depreciation, amortization and interest of $2.5 million, resulting in net income for the quarter was $898,317. This is a big leap from the comparable quarter a year earlier, with revenues of $2.9 million and expenses of $3.4 million with a loss before depreciation, amortization, interest and a  net loss, after tax recovery, of $884,136.

Zoomer magazine publisher reports first profitable quarter

[This post has been updated] ZoomerMedia has reported its first profitable quarter. In the three months ended September 30, the company -- which publishes Zoomer magazine --  had a profit of $ 2.33 million on revenues of $14.5 million. This compares with a loss of $561,142 in the comparable quarter a year ago.

The results are a sharp turnaround from its most recent complete year, during which the company had a net operating loss of $6.2 million on revenues of $10.3 million. Most of the turnaround is attributed to acquisitions the company made, including the Vision group of television channels and MZ Media radio stations. 

"We are pleased to report our first profitable quarter. The recent additions of television and radio to our existing Zoomer - oriented magazine and web assets, positions us perfectly to ride the surging demographic wave which is the Zoomer market." said Moses Znaimer, President and Chief Executive Officer of ZoomerMedia Limited in a release.

[Update: You may be amused by a commentary by Shelley Fralic in the Vancouver Sun about the appearance of Moses Znaimer at the Vancouver Convention Centre. 

In Zoomerville, you see, everyone is handsome and energetic and financially flush, with no mortgages and spit-polished grandchildren and a new-found love of opera.]

Zoomer Media reports increased loss on operations at year end 2010

ZoomerMedia, the parent company of Zoomer magazine, reports that it had a net operating loss of $6.2 million (or about 60%) on revenues of $10.3 million for the year ending June 30, 2010. About a third, or $2.1 million of the loss, came in the most recent quarter in which the company had revenues of $3.2 million, it reported in a company release.All results include amortization, depreciation and write-downs.

The most recent year's loss is $900,000,  more than last year's comparable results in which the company had $9.7 million in revenue and a net operating loss of $5.3 million (about 55% of revenue).

ZoomerMedia, controlled by Moses Znaimer, is a publicly traded company with holdings in print, online properties, radio and television.

National Enquirer publisher American Media Inc. files for bankruptcy

American Media, the publisher perhaps best known for its supermarket tabloids National Enquirer and Star (as well as Shape and Men's Fitness) is entering Chapter 11 -- in other words, declaring bankruptcy.  The company said in a release that within two weeks, 80% of its creditors need to agree with a "prepackaged Chapter 11 filing" that would give the company 60 days to reorganize  under the supervision of the courts and negotiate a way out from under its debts. 

Previously, AMI had tried to exchange its debt (notes coming due in 2013) for cash and equity. Not enough creditors were willing to make the swap and the effort was abandoned. AMI Chairman, President and CEO David Pecker said 

"For our advertisers, employees, customers and vendors, this short period will be business as usual, with considerable upside in the future. American Media is engaging in this strategy from a position of financial strength and confidence....Publications will function seamlessly, staff will be unaffected by the reorganization and customers should not notice any difference during the 60 day process."

Rogers says publishing growth now positive as over all Q1 net income up 21% from last year

Rogers Communications has reported net income for the second quarter of 2010 of $451 million US or 78 cents per share. This was up 21% from the same period last year. Revenue was up 5% to $3.03 billion US. Revenue growth was 7% for the wireless network, 4% for cable and 8% for media. 

For the six months to date, media revenue, which includes consumer and trade magazine publishing, television, Sportsnet, radio, The Shopping Channel and sports franchises including the Toronto Blue Jays,  was $697 million, up $30 million from the same quarter a year ago. For the first two quarters, operating profit was $67 million, up $47 million from the comparable six months the year before, or about 10.6%/ The company reported: 

"Publishing is also beginning to experience positive growth in advertising revenues for the first time in several quarters." 

However, the consolidated financial statements do not break out magazine data.

Rogers Communications up in profit and dividend; media division has 6% revenue decline

Rogers Communications Inc.'s media division experienced a 6% revenue decline in the year ending December 31, 2009. The division, which includes the company's magazines and as well as television properties like the Shopping Channel, the Outdoor Life Network, Omni and CityTV and other enterprises like the Toronto Blue Jays, had operating revenues of $1.407 billion, compared with $1.496 billion last year. There were no details published for consumer and trade magazines.

The company's release noted that media operating expenses had also been brought down by 5%, but after various restructuring expenses and other extraordinary adjustments, operating profit had dropped $69 million from $142 million in 2008 to $73 million in 2009.

For Rogers Communications as a whole, including its cable and wireless business, which dominates company results, adjusted operating profit was up 8% from $4.060 million to $4,388 million. Income per share increased 27% to $2.51. The 10% increase in the companies annual dividend met analysts' expectations, as did the $1.35 billion share buyback.

"Against a tough economic backdrop, we delivered solid financial and operating results during the fourth quarter," said Nadir Mohamed, President and Chief Executive Officer, Rogers Communications Inc. "Importantly, the results show a healthy balance of growth, cost control, improved churn and a double-digit increase in cash flow generation."

"2009 was a solid year for Rogers, we returned increasing amounts of cash to shareholders and we delivered on our commitments," continued Mr. Mohamed. "Looking ahead, we are extremely well positioned with a terrific asset mix and strong customer demand for our products and services. The dividend increase and the renewal of our share buyback program for 2010 underline our continued confidence in the strategic position of the Company."

Content and programming will make the difference for magazines, say investors

Magazines are still a good investment, according to a report in Folio: about the 8th annual DeSilva and Phillips dealmaker's summit, held in New York. Some of what was said:

“We would not invest in newspapers. With magazines, maybe. It depends on the market. Newspapers have a fundamental issue where they don’t deliver as much value as their alternatives. With magazines, that fundamental issue doesn’t exist as long as they’re targeted to an attractive niche market.” Content that can’t be had elsewhere—either through original reporting or unique ways of aggregating— [is an] attractive investment, he said.

“We believe in content but we’re struggling to monetize it. It’s not really an issue for the next five years but it could be a problem five years from now when we try to sell the business and project what it will be worth to a buyer.” -- Jeff Horing, managing director of Insight Venture Partners.

“I think it’s hard to make [paywalls]work.In our experience, you can charge a lot of money for specialized information for an audience with a need for it—it doesn’t have to be business and finance. But for more general interest, the value just isn’t there.” -- Norman Pearlstine, chief content officer of Bloomberg.

“Right now, the Internet is still so immature that everything is driven by the product. But ultimately, users don’t want to be their own programmers. People are still going to the same three or four sites every day.” -- Tyler Goldman, CEO of BuzzMedia.

Znaimer sells some assets to ZoomerMedia and in the process tightens control

Media entrepreneur Moses Znaimer has acquired a tighter grip on control of ZoomerMediaLimited, of which he is President and CEO by selling it several media and real estate assets he controls, in return for shares in the company and $4 million in cash. 

Znaimer and his holding firm Olympus Management Limited thereby have acquired 66% of the common shares and 66% of the preferred shares of ZoomerMedia which, among other things, published Zoomer magazine. The purchase of the Znaimer assets was financed by a recent $17.6 million private placement in Zoomer by Fairfax Financial Holdings Limited.  

The acquisition price for the MZ Assets will be paid through the issuance to Moses Znaimer and Olympus Management Limited ("OML"), a company controlled by Moses Znaimer, of 4,094,970 common shares of Zoomer and 255,905,030 non-voting Series 2 Class A Preference Shares (the "Series 2 Shares"), all issued at a price of $0.10 per share and $4 million in cash. At the time of closing, OML intends to invest a further $2 million in Zoomer through the exercise of warrants for cash to acquire a further 20 million common shares of Zoomer at a price of $0.10 per share. Zoomer will also assume mortgage liabilities with respect to the Property in the principal amount of approximately $10.2 million.

Essentially,the shares were acquired by the sale to ZoomerMedia of various assets including 

• radio holdings (CFMZ-FM, the New Classical 96.3 FM and 103.1 FM and CFZM, Zoomer Radio AM740);
• a television production and distribution business MZTV Production and Distribution Inc.;
• Zoomer Management Limited, which provides management services to a variety of companies, many of which are Znaimer's directly or indirectly;
• the "Idea City" annual conference;
• an office building in downtown Toronto

Zoomer magazine has a paid circulation of about 180,000 and is estimated to sell about 12,000 copies on newsstands. Zoomer also controls CARP, Canada's largest association for the 45 plus and its online properties, with approximately 350,000 members. One of its largest properties is 50plus.com, an interlinked series of websites that target the 45+ age group.  

ZoomerMedia  publishes Zoomer magazine, associated websites and other media properties, largely in radio. Recently, the company announced the acquisition of the assets of Vision TV.

Reader's Digest Canada one of few bright spots for parent company

Reader's Digest Canada is one of the few bright spots for Reader's Digest Association, which has posted an operating loss of $337 million for fiscal 2008, compared with a lost of a tenth of that last year. Most of the loss is attributed to writedowns in its school and educuational services division, according to a story published by Folio:

According to the report, RDA’s fiscal 2008 net revenue was $2.78 billion, up about 40 percent from $1.07 billion last year. More than half its revenue came from its international division, which is includes RD Europe, RD Asia Pacific, and RD Canada and Latin America. Net revenue from its U.S. business segment (formerly Reader’s Digest North America) was down $21 million during fiscal 2008.

Ad slowdown expected, Transcontinental downgraded by analyst

A report issued yesterday by a leading analyst suggests that some of Canada's largest media companies, including Transcontinental, the largest producer of consumer magazines, are facing a slowdown in advertising spending that may continue for two or three years. According to a story from The Canadian Press:

Canada's largest media companies should continue to be hit by an anticipated slowdown in advertising spending before a recovery takes place in 2010, an industry analyst said Thursday.

Drew McReynolds of RBC Capital Markets says he has lowered his performance expectations because he believes a healthy growth in advertising spending over the last five years should slow.

Canadian advertising spending remains reasonably healthy, but advertising buyers - often leading indicators - indicated as early as November that Canadian and U.S. advertisers were becoming increasingly cautious heading into 2008.

In a report issued Thursday, McReynolds said the media sector has significantly underperformed.

Ten of 13 stocks covered have underperformed the S&P/TSX Composite in 2007, with nine stocks generating negative returns.

Since June 30, all stocks covered have underperformed the index.

As a result of the overall uncertainty, RBC downgraded Transcontinental (TSX:TCL.A) and Torstar (TSX:TS.B).

Among its recommendations are Thomson Corp. (TSX:TOC), Quebecor Inc. (TSX:QBR.B) and Yellow Pages (TSX:YLO.UN) in the publishing and printing sectors.

Astral Media Inc. (TSX:ACM.A), Corus Entertainment (TSX:CJR.B) and Kaboose (TSX:KAB) are the top picks in the broadcasting and new media sectors.

Rogers increases dividend, buys back shares

[UPDATE: Rogers Communications Inc. stock dropped 6% Monday, despite the company doubling its dividend, announcing it intends a 15% stock buyback and making a rosy forecast for 2008. Investors are apparently skittish about a decline in the uptake of wireless services, despite Rogers adding 183,000 net new wireless subscribers in the past 6 months.]

Rogers Communications Inc., Canada's largest magazine publisher and second only to Transcontinental Inc. in circulation of consumer magazines, has announced that it is doubling its shareholders' dividend, planning to buy back as much as 15% of its stock and looking forward to a 2008 consolidated revenue of as much as $11.5 billion and a profit in the range of $4 billion.

Of course this is just a forecast but the company's huge wireless, cable and TV enterprise is apparently doing particularly well. Hence the confidence to promise a dividend of $1 a share. The shares were trading at just under $42 this morning.

"Our plan for 2008 strikes a healthy balance between the continued delivery of profitable growth, the return of increasing amounts of our growing free cash flow to shareholders, and the investments that will help assure such growth continues well into the future," said CEO Ted Rogers.

Osprey on the block

Osprey MediaIncome Trust, the holding company for many small newspapers and magazines, has been struggling to retain investor interest in the face of declining distributions. This was not made easier by the government's decision to begin taxing income trusts in a few years.

According to a story in the Globe and Mail and a release by the company, the board of the trust has decided "to proceed with a process to consider and review strategic alternatives that may be available to Osprey to enhance unitholder value" -- in other words, to shop the company around. Likely that two of its largest shareholders -- Ontario Teachers Pension Plan and the Bank of Nova Scotia -- are pressing the issue and would be interested in selling at the right price, somewhere north of some $5 per unit offers that are rumoured to have been on the table for some time now.

The price of the company's units have dropped about 45% since its inception and is now about $5.55. Osprey's original strategy, which was to build a small empire of small newspapers (many of them snapped up after Conrad Black's breakup of Hollinger) and magazines that would spin off regular payments to investors. That's clearly not going to work, now. A tough advertising market meant the company was unable to keep up the cash distributions. One of the possible buyers for the Osprey properties could be Torstar, whose fierce competition in various markets is one of the reasons why the company is in the fix it is.

Osprey bought Town Media, publishers of Hamilton magazine, in 2004; the only national magazine it owns is Vines.

For background on this story, look at earlier posts here and here.

CanWest now owns The New Republic

CanWest Global Communications now owns The New Republic. Without much fanfare, the company bought control by acquiring 50% of the magazine from a pair of investment bankers to add to the 25% they already bought last January. Editor-in-chief Martin Peretz retains 25% . According to a story in the New York Times, CanWest plans major renovations, including reducing the magazine's frequency to every two weeks and increasing the number of pages per issue and the amount of illustration in what has always been a fairly text-heavy and austere publication.

Mr. Peretz said that the takeover by CanWest would help guarantee the magazine’s financial future, [the Times story said].

“It just seemed to me, given my own intellectual and moral synergies with Leonard J. Asper, a very good partnership,” he said, referring to the chief executive of CanWest. Mr. Asper was not available for comment yesterday.

The 97 year old, slightly right-inclined magazine of comment and politics seems an oddball fit for CanWest. For one thing, its circulation has been in freefall since 2000, when it was over 100,000 and now stands at about 60,000.

[S]ome critics have attributed the weakening sales to a murky and sometimes conservative editorial voice, as progressive causes have intensified, particularly in the blogosphere and particularly over the war in Iraq. The New Republic initially supported the war but has since apologized for that support. It also backed Senator Joseph I. Lieberman of Connecticut, who lost the Democratic primary in 2006 but retained his seat as an independent during the election.

While the circulation of other liberal magazines, including The Nation and The Progressive, increased after President Bush’s re-election in 2004, that of The New Republic did not.

There is a familiar face at the helm. Greg MacNeil, a consultant to CanWest and the former President of St. Joseph Media (Toronto Life, Fashion, Wedding Bells, Canadian Family), has been the interim publisher of The New Republic since November. He said that CanWest would provide some media-business savvy that the magazine has lacked in recent years:

“It’s a garden that needs watering.”

Not that most Canadians need to be told, but CanWest owns most of the newspapers in Canada and is this country's second-largest broadcaster. (Just yesterday it announced it was increasing its stake in the acquisition of Alliance Atlantis Communications to $200 million. Perhaps this overshadowed the TNR takeover news, which appears nowhere on the CanWest website.)

[UPDATE] Some comment in the bitchy blog Gawker about the decision by The New Republic not to extend subscriptions to compensate for halving frequency; the magazine argues that each issue will be fatter. Hence, fewer, fatter issues for the same price.

Osprey continues to struggle with ads and unit value

Osprey Media Income Fund, an owners of small daily and weekly newspapers and small magazines, has written down about$170 million of its value, blaming a slumping advertising market, particularly automotive.

The company has seen the price of its units steadily erode, threatening its ability to make the kinds of distributions that keep people happy with income trusts. Last fall, the value of its units fell by 15% when the federal government announced that such trusts would be taxed, starting in 1011. Yesterday, the value of the units was $5.73, which is half what they once were. So far, the company is still paying out about $0.64 cents a unit, but there is some question about how long that can continue, given the 2006 loss of $113.4 million.

Osprey president and CEO Michael Sifton shone the brightest light he could on the situation by noting that the company had been able to post revenue growth of $7.2 million, or about 3.4 per cent for the year.

See earlier post about this company.