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CanWest specialty channel gold mine
Tuesday May 15th 2007TORONTO (CP) _ CanWest Global Communications Corp. (TSX:CGS) could become the operator of a gold mine of specialty TV channels if the takeover of Alliance Atlantis Communications Inc. (TSX:AAC.B) is approved by regulators this summer, says an analyst familiar with both companies.
Kaan Yigit of Toronto-based Solutions Research Group said Tuesday that strong first-quarter earnings for Alliance Atlantis signal that the assets will prove lucrative for the long term.
Alliance Atlantis posted a 16.1 per cent surge in advertising revenue on strong audience growth in its specialty channels, which include HGTV, History and digital labels Showcase Action and the National Geographic Channel.
The company has "spent many years building those brands and you see the payoff from that standpoint in this crowded universe of brands and channels," said Yigit.
They’re "gold mines because those channels will perform well over the years."
That’s encouraging for CanWest, which is awaiting approval of a $2.3-billion takeover of Alliance Atlantis by a unit of its company, partnered with Wall Street investment bank Goldman Sachs, which is supplying 85 per cent of the financing.
The broadcast ad revenues were part of a overall solid quarter for Alliance Atlantis, whose profit almost doubled to $41.2 million from a year-ago $21.5 million with the help of worldwide sales of the CSI television franchise.
CSI revenue increased 74.3 per cent to a record quarterly take of $162.3 million on strong international licensing. Alliance’s partner in the series is CBS.
Chief executive Phyllis Yaffe said overall revenue grew 32 per cent to $358 million as advertising sales increased to $41.9 million. Subscriber revenue was up 8.5 per cent to $35.7 million.
Net earnings for the three months ended March 31 amounted to 98 cents per share, compared with 49 cents per share a year earlier.
Adam Shine, an analyst at National Bank Financial said profits gains beat his expectations because the company spent the last two years "maintaining margins amidst ongoing programming spending initiatives."
Alliance has also been making inroads into video-on-demand services, which Yigit said could help solidify its competitive stance in the future.
Last week, the company announced a pairing with Rogers Communications (TSX:RCI.B) to offer content from HGTV, Food Network, and National Geographic Channel on its digital boxes.
The CanWest deal still needs to clear some hurdles, including approval by the Canadian Radio-television and Telecommunications Commission and a legal challenge from Movie Distribution Income Fund (TSX:FLM.UN), which jointly owns a motion-picture distribution business with Alliance.
Nonetheless, the company expects the deal to be completed in July or early August.
Alliance Atlantis shares rose five cents to $51.35 Tuesday afternoon on the Toronto Stock Exchange.
Headline, Industry News
CanWest specialty channel gold mine
Tuesday May 15th 2007TORONTO (CP) _ CanWest Global Communications Corp. (TSX:CGS) could become the operator of a gold mine of specialty TV channels if the takeover of Alliance Atlantis Communications Inc. (TSX:AAC.B) is approved by regulators this summer, says an analyst familiar with both companies.
Kaan Yigit of Toronto-based Solutions Research Group said Tuesday that strong first-quarter earnings for Alliance Atlantis signal that the assets will prove lucrative for the long term.
Alliance Atlantis posted a 16.1 per cent surge in advertising revenue on strong audience growth in its specialty channels, which include HGTV, History and digital labels Showcase Action and the National Geographic Channel.
The company has "spent many years building those brands and you see the payoff from that standpoint in this crowded universe of brands and channels," said Yigit.
They’re "gold mines because those channels will perform well over the years."
That’s encouraging for CanWest, which is awaiting approval of a $2.3-billion takeover of Alliance Atlantis by a unit of its company, partnered with Wall Street investment bank Goldman Sachs, which is supplying 85 per cent of the financing.
The broadcast ad revenues were part of a overall solid quarter for Alliance Atlantis, whose profit almost doubled to $41.2 million from a year-ago $21.5 million with the help of worldwide sales of the CSI television franchise.
CSI revenue increased 74.3 per cent to a record quarterly take of $162.3 million on strong international licensing. Alliance’s partner in the series is CBS.
Chief executive Phyllis Yaffe said overall revenue grew 32 per cent to $358 million as advertising sales increased to $41.9 million. Subscriber revenue was up 8.5 per cent to $35.7 million.
Net earnings for the three months ended March 31 amounted to 98 cents per share, compared with 49 cents per share a year earlier.
Adam Shine, an analyst at National Bank Financial said profits gains beat his expectations because the company spent the last two years "maintaining margins amidst ongoing programming spending initiatives."
Alliance has also been making inroads into video-on-demand services, which Yigit said could help solidify its competitive stance in the future.
Last week, the company announced a pairing with Rogers Communications (TSX:RCI.B) to offer content from HGTV, Food Network, and National Geographic Channel on its digital boxes.
The CanWest deal still needs to clear some hurdles, including approval by the Canadian Radio-television and Telecommunications Commission and a legal challenge from Movie Distribution Income Fund (TSX:FLM.UN), which jointly owns a motion-picture distribution business with Alliance.
Nonetheless, the company expects the deal to be completed in July or early August.
Alliance Atlantis shares rose five cents to $51.35 Tuesday afternoon on the Toronto Stock Exchange.
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Headline, Industry News
CanWest specialty channel gold mine
Tuesday May 15th 2007TORONTO (CP) _ CanWest Global Communications Corp. (TSX:CGS) could become the operator of a gold mine of specialty TV channels if the takeover of Alliance Atlantis Communications Inc. (TSX:AAC.B) is approved by regulators this summer, says an analyst familiar with both companies.
Kaan Yigit of Toronto-based Solutions Research Group said Tuesday that strong first-quarter earnings for Alliance Atlantis signal that the assets will prove lucrative for the long term.
Alliance Atlantis posted a 16.1 per cent surge in advertising revenue on strong audience growth in its specialty channels, which include HGTV, History and digital labels Showcase Action and the National Geographic Channel.
The company has "spent many years building those brands and you see the payoff from that standpoint in this crowded universe of brands and channels," said Yigit.
They’re "gold mines because those channels will perform well over the years."
That’s encouraging for CanWest, which is awaiting approval of a $2.3-billion takeover of Alliance Atlantis by a unit of its company, partnered with Wall Street investment bank Goldman Sachs, which is supplying 85 per cent of the financing.
The broadcast ad revenues were part of a overall solid quarter for Alliance Atlantis, whose profit almost doubled to $41.2 million from a year-ago $21.5 million with the help of worldwide sales of the CSI television franchise.
CSI revenue increased 74.3 per cent to a record quarterly take of $162.3 million on strong international licensing. Alliance’s partner in the series is CBS.
Chief executive Phyllis Yaffe said overall revenue grew 32 per cent to $358 million as advertising sales increased to $41.9 million. Subscriber revenue was up 8.5 per cent to $35.7 million.
Net earnings for the three months ended March 31 amounted to 98 cents per share, compared with 49 cents per share a year earlier.
Adam Shine, an analyst at National Bank Financial said profits gains beat his expectations because the company spent the last two years "maintaining margins amidst ongoing programming spending initiatives."
Alliance has also been making inroads into video-on-demand services, which Yigit said could help solidify its competitive stance in the future.
Last week, the company announced a pairing with Rogers Communications (TSX:RCI.B) to offer content from HGTV, Food Network, and National Geographic Channel on its digital boxes.
The CanWest deal still needs to clear some hurdles, including approval by the Canadian Radio-television and Telecommunications Commission and a legal challenge from Movie Distribution Income Fund (TSX:FLM.UN), which jointly owns a motion-picture distribution business with Alliance.
Nonetheless, the company expects the deal to be completed in July or early August.
Alliance Atlantis shares rose five cents to $51.35 Tuesday afternoon on the Toronto Stock Exchange.
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