Good morning. My name is Chris. I will be your conference operator today. At this time, I would like to welcome everyone to the Corus Entertainment Q1 2021 analyst and investor conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. As a reminder, this call is being recorded. I will now turn the call over to Mr. Doug Murphy, President and CEO of Corus Entertainment. Please go ahead, sir. Thank you, operator and Chris. Good morning, everyone, and welcome to Corus Entertainment's fiscal 2021 first quarter earnings call. I'm Doug Murphy, and joining me this morning is John Gossling, Executive Vice President and Chief Financial Officer. Before I read the cautionary statement, I'd like to remind everyone that we have slides to accompany today's call. You can find them on our website at www.corusent.com under the investor relations section. Let's move to the standard cautionary statement found on slide two. Today's discussion contains forward-looking statements that may involve risks and uncertainties. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements are contained in the company's filing with the Canadian securities administrators on SEDAR. Good morning, everyone, and Happy New Year. Before we begin discussing our Q1 results, I will take a brief moment to comment on the current operating environment. As we collectively experience new widespread COVID lockdowns, our team at Corus has once again stepped up to serve the needs of our audiences and local communities and to help our advertising clients navigate the challenging environment. With the expanded restrictions in place and as we await the broad rollout of newly approved vaccines, our priorities are clear. Audiences continue to rely on us for the delivery of timely and relevant news, information, and entertainment across a broad array of platforms. We are deeply committed to meeting these needs. On behalf of our team, we would like to take this opportunity to recognize the tireless efforts of our frontline and essential workers across the country as we endure this health crisis and look forward to brighter days ahead. I will now turn to our first quarter results and offer some perspective on the positive momentum we are seeing in fiscal 2021 on slide three. When we last spoke, I referenced our book of COVID and the chapters we have been writing as we adeptly navigate the COVID-19 pandemic. We left off in chapter four, Up and to the Right, describing the sequential improvement in our overall business. This chapter speaks not only to our advertising recovery, but also to the outlook for our overall consolidated revenue, both as we move towards an exit from the current health situation and in the years that follow. I am pleased to share that our Q1 results demonstrated this on all fronts. Our team is making meaningful progress on the disciplined execution of our strategic plan, which is designed to get us to consolidated revenue growth year over year over year. We kicked off our new fiscal year with a stronger than anticipated quarter. In the first quarter, we delivered consolidated revenues of CAD 420 million, consolidated segment profit of CAD 179 million, free cash flow of CAD 62 million, and improved financial flexibility with bank debt repayments of CAD 34 million in the quarter, which reduced our leverage to 3.14x net debt to segment profit. John will take you through our detailed segment results later in this morning's call. At Corus, our intention is to emerge from the current situation stronger than when we went in. We recognize that the rollout of the COVID-19 vaccine is the next important step to protecting Canadians, and that is the only thing that will get our economy back on track. We are well-positioned to meet the needs of all our partners and stakeholders as we start down this road to recovery. Let me take a moment to highlight the significant progress we have made against our strategic plan beginning on slide four. Create a great place to work. We are proud of our well-established process at Corus to measure engagement every quarter. The key targeted drivers revealed from this information are invaluable for us as they clearly indicate what's most important to our people. For Q1, this focus was to ensure a clear understanding of our strategic plan company-wide, and with it, a strong sense as to how each member of the Corus team impacts our business and the pursuit of growth year-over-year. I'd also like to celebrate Corus Cares, our community giving initiative that raised nearly CAD 4 million in our first quarter, supporting 136 organizations across the country that range from our legacy commitments in Vancouver, Calgary, and Edmonton to our many other local efforts assisting food banks, hospitals, women's shelters, and children's programs across Canada. As we endure this health crisis, we recognize that we have an important role to play in the well-being of local communities and businesses. We are proud of our dedicated people and the efforts that are making a difference where they live. Build a content powerhouse. In content, our studio ambitions are coming to fruition, driving revenue growth in our global licensing business. We are experiencing a flywheel-like effect as more and more broadcasters and distributors discover our great content and its ability to drive ratings as we concurrently expand our production slate. Corus Studios continues to break new ground. Given the increased demand for content on broadcast and streaming platforms, we doubled down on our efforts to secure new licensing deals, and the results have been impressive. Over the summer, we saw more than 300 hours of content sales, plus we confirmed another 250 hours this past fall, opening the doors to new business, soon to be announced deals in the U.S. with linear television and wholesale distributors. Corus Studios is well-positioned to continue its growth trajectory in fiscal 2021, with 19 new and returning series in the pipeline representing more than 200 episodes. Nelvana's output will be similarly robust, with 14 series slated for the year representing almost 180 episodes. We are thrilled to premiere Nelvana's new live-action Canadian original series, The Hardy Boys, on YTV in Canada in the coming months, following an extremely successful U.S. launch of the series on the premium streaming platform Hulu this past December. This foray into live action is exceeding our expectations for engagement on Hulu, and we look forward to building on this great start with our new streaming partner. In the international market, Nelvana's co-production partnership with Discovery Kids Latin America, redknot, last week announced the green light of the second season of Agent Binky: Pets of the Universe. This series, one of redknot's first projects and based on a popular Kids Can Press title, was nominated for Kidscreen Awards Best New Preschool Series in 2020 and has already seen ratings success in Canada, Latin America, France, and other key territories. Connect with audiences. Turning to audiences, STACKTV continues with its impressive upward trajectory as we head into the winter months. In Q1, we enhanced our efforts in subscriber acquisition in concert with the rollout of new and returning hit content across our portfolio of channels. We are very encouraged by the results to date. Our attractive winter and spring programming lineup, combined with ongoing marketing investments, positions us to maintain this trajectory up and to the right. With more than 400,000 paying subscribers now from STACKTV and Nick+ on Amazon Prime Video channels, Corus is certainly in the slipstream of this exciting new streaming growth opportunity. Help brands grow. The new Corus is well-positioned to meet the needs of advertisers seeking targeted, customized solutions to effectively and efficiently reach their audiences across a multitude of platforms. We are seeing great momentum with increased traction on audience segment selling as several new large advertisers embrace our Cynch platform, and we ramp up for a full rollout later this year. Today, we're introducing two new performance metrics: optimized revenues, which encompasses our advanced advertising initiatives, and new platform revenues comprised of streaming and digital initiatives. These will help you measure the progress we are making leading the charge as we change the way we sell television. John will take you through these metrics in more detail shortly. Operate with discipline. We remain intensely focused on our priority to operate with discipline, as reflected in our strong free cash flow results. In Q1, this enabled us to pay down bank debt and further deleverage our balance sheet. Our strict focus on free cash flow and expense control will be reflected throughout fiscal 2021 and beyond. Over to slide five. As we discussed on our Q4 call, the timing of the premieres of our shows have been delayed throughout the fall and into the winter on Global, resulting in some unusual seasonality and a very different fall premiere season this year. Many of our shows that would typically debut in late September into October experienced delays in delivery resulting from a production hiatus across North America due to the pandemic. That said, the schedule we put in place has performed well, with Global delivering eight of the top 20 shows for adults 25-54 this fall, including NCIS and FBI. On specialty, we delivered 13 of the top 20 entertainment shows for adults 25-54, including History's The Curse of Oak Island, W's Why Women Kill, and Showcase's Brave New World, one of NBCUniversal's Peacock originals. A function of this atypical experience is that we have much of our fall schedule effectively debuting in Q2 and Q3. This positions us well to deliver increased audiences with Canadians staying at home during the winter months as we introduce a much stronger programming lineup than we have had historically ever at this time. We are excited about the return of hit series Prodigal Son and 9-1-1, and the launch of the new highly anticipated series Clarice and The Equalizer on Global. We saw great results with the relaunch of Saved by the Bell, one of NBCUniversal's Peacock originals, on W Network, and witnessed the full season drop of this series on STACKTV, driving subscriber growth in November. With that, I will now turn it over to John. Great. Thanks, Doug, and good morning, everyone. I'll start on slide six. As Doug mentioned earlier, we delivered a solid start to the year. Corus' consolidated revenue of CAD 420 million for the quarter was down 10% over the prior year, ahead of our expectations with sequential improvement in the current environment as we continue our up and to the right recovery. Consolidated segment profit was strong at CAD 175 million for the quarter. That was down to 3% versus prior year. We delivered consolidated segment profit margins of 42% for the quarter. That's up nicely from 39% last year. Consolidated net income attributable to shareholders for the quarter was CAD 77 million, or CAD 0.37 per share, that's relatively consistent with the prior year. Free cash flow of CAD 62 million was ahead of the CAD 53 million in the prior year quarter. The current year quarter did benefit from wage subsidy receipts of CAD 25 million, and that was reduced interest payments on bank debt and lower programming and film investments, and these were partially offset by the payment of delayed fiscal 2020 corporate income tax installments, which was permitted under the federal government pandemic relief measures, and that was CAD 17 million. Let's turn to our TV results for the first quarter, as detailed on slide seven. Overall, TV segment revenues were down 9% over prior year, reflecting the second consecutive quarter of sequential improvement in TV advertising revenues. This was an impressive result given the pandemic delayed delivery of new shows for Global and resulted in a later start for the fall season, as Doug mentioned. Our networks and sales teams were able to successfully balance rating supply with advertising demand to maximize the value of our inventory despite the shortfall in program deliveries in the quarter. Looking forward, we are well-positioned for a strong second half of our fiscal year when we will lap the onset of the pandemic and the significant impact it had on our TV advertising revenues. Subscriber revenues were flat to last year, driven by impressive STACKTV and Nick+ subscriber growth, as Doug has mentioned, and that was offset by declines in legacy linear subscriptions and the impact of distribution renewals and channel shutdowns in the current and prior year. We are also benefiting from strong Nelvana and Corus Studios content licensing sales, with growth of 11% in our merchandising distribution and other revenues in the quarter. TV expenses in the first quarter decreased by 15% over the prior year. Direct cost of sales was down 17%, and that reflects lower programming costs resulting from the delays in production and delivery of the fall schedule. Our G&A expenses were favorably impacted, down 14% from the prior year, and that reflects aggressive management of discretionary expenses and the benefits of the work from home environment, as well as the continuing but significantly reduced eligibility for the federal wage subsidy. Looking forward into Q2, more programming than usual is expected to premiere early in the calendar year as a result of production delivery delays. As a result, timing of program deliveries will continue to be one of the key variables impacting costs in future quarters. As a partial offset to any increases in programming costs, we will continue to tightly manage discretionary spending. Overall, TV segment profit increased 1% in the first quarter, and TV segment profit margins were 46%, compared to 42% in the prior year period. Now on to slide eight. As we promised in Q4, today we're rolling out a new set of revenue performance metrics that will clearly demonstrate the benefits of our TV revenue diversification strategy, as highlighted on that slide. The first metric is optimized revenues expressed as a percent of total TV advertising, which details our progress on the transformation of how we sell television advertising. Included are revenues contributed from audience segment selling, as well as from our Cynch platform, which we expect will be fully rolled out by the end of this fiscal year. Optimized revenues represented approximately 26% of total TV advertising revenue in the first quarter, that's up from 21% in Q4 2020 and 24% in the prior year quarter. The second new metric is new platform revenues expressed as a percentage of TV advertising and subscriber revenues, which encompasses subscriber revenue from streaming initiatives and advertising revenue from new digital platforms. These revenues are largely incremental to our legacy TV business, reflect our participation in rapidly growing OTT and digital advertising markets. New platform revenues for Q1 are approximately 7% of TV advertising and subscriber revenues, that's in line with Q4 2020 and up from approximately 4% in the prior year quarter. The initiatives highlighted in these metrics, coupled with growing interest in our Nelvana and Corus Studios content from international markets, underpin our plan to deliver consolidated revenue growth year-over-year. Next, let's turn to our radio results as outlined on slide nine. Radio segment revenues decreased CAD 9.7 million as radio continues to be impacted by pandemic-related restrictions on businesses in local markets. This result, however, reflects the second consecutive quarter of sequential improvement. On the ratings front, we are very excited that in the recently released December ratings book, Toronto's Q107 and Vancouver's Rock 101 were number one in the rankings for adults aged 25 to 54 for a second consecutive quarter as the Rock format continues its resurgence. Radio segment profit decreased CAD 4.9 million in the quarter given the challenging revenue conditions. Segment profit margin of 25% was down 30% in the prior year, but significantly improved from our last two quarters. Now over to slide 10. Our strong free cash flow in fiscal 2020 continued into the first quarter of 2021, giving us the confidence to resume our previous quarterly dividend declaration schedule. This morning, we issued a press release declaring our March 2021 quarterly dividend of CAD 0.06 per share for Class B shareholders, once again providing a highly market competitive dividend yield of approximately 5.2%. We continue to strengthen our balance sheet building on our strong track record of debt reduction of CAD 34 million in bank debt repayments this quarter. Net debt to segment profit has now improved to 3.14x at November 30th, 2020. That's down from 3.18x at the end of August. Our goal for fiscal 2021 is to drive our net debt to segment profit below 3.0x by the end of the year, creating additional financial flexibility to support the advancement of our strategic plan and creation of value for shareholders. With that, back to you, Doug. Thank you, John. Over to slide 11. As we said earlier, our goal is to come out of this pandemic experience stronger than when we went in. I am pleased that we are making such meaningful progress in advancing our strategic priorities, providing us many reasons to be optimistic about the year ahead and beyond. Our plan will return us to consolidated revenue growth year-over-year as we emerge from the COVID crisis with a focus on transforming how we sell television, putting more content in more places and growing our studio content business internationally. Our strong, sustainable free cash flow will serve to increase our equity share value as debt is repaid while providing funding for our strategic plan and of course, the dividend. Our highly attractive dividend yield is five point-- and a free cash flow payout ratio below 20% makes us a compelling option in today's market. We are pleased that the government is moving forward with amendments to the Broadcasting Act. Bill C-10 is a necessary first step towards regulatory reforms that are long overdue. Parliament must move quickly to pass the bill and then provide additional policy guidance to the CRTC. I want to thank our talented and resilient team at Corus for their tireless effort, commitment, and resourcefulness. Our Q1 results demonstrate continued momentum from the last quarter and provide evidence that we are moving in the right direction up into the right. We are confident in the solid plan in place for 2021 anchored in a vision for the future and designed to capitalize on the shifts in this dynamic media marketplace. We will apply the same disciplined approach as we always have to provide value for our audiences, partners, clients, teammates, and shareholders. Over to you, operator. Thank you. At this time, I would remind everyone in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from Adam Shine of National Bank Financial. Your line is open. Thanks a lot. Good morning. Happy New Year to both of you. Maybe Doug, can you start by just explaining what exactly we should anticipate for, you know, the TV season this year? Clearly, you know, we are, as you said, seeing the delays in terms of episodic deliveries Q1, Q2. Does it mean that we're going to see, let's say, fewer repeats in Q3 and perhaps less overall episodic deliveries of seasons of different shows, whereby, you know, the season ends as per usual around May, or do we get some bleeding in, you know, to Q4 potentially this year as a unique sort of dynamic? Thanks, Adam, Happy New Year to you as well. Quite frankly, I think at this juncture, it's pretty much anybody's guess. Okay. We, you know, we have, we know what we've got in the can coming in for, you know, Q2 and the beginning half of Q3. The sports piece is the big question out there. I think the World Juniors did a great job pulling that off. The NHL is about to fire up. We'll see where that goes. We're not certain about the Olympics in Q4, although there's still, I think, ambition to continue. On Global, we're of course reliant on our simulcast partners in the U.S., and that of course is reliant to some degree on which shows are still in production. Los Angeles is back in hiatus as of earlier this week with some of our partners. How those simulcast partners choose to address any shortfall in episodic delivery, with, you know, reruns, for example, is still to be determined. You know, in the fall, you know, we were able to be very strategic and picked up a couple shows that were available in simulcast when we learned that some of our schedule was shifting out. Kudos to the teams for, you know, the entrepreneurial approach in so doing. It helped us to meet demand with the appropriate amount of inventory and impressions. In Q2 and Q3, you know, as we sit right now, we're debuting a bunch of our big shows, Prodigal Son and 9-1-1 in the weeks ahead. What happens into Q3 and Q4, it's really too early to tell. You know, with the pandemic second wave shutdown coming and the conditions in California in particular at the moment, it's a little bit of an uncertainty. Maybe that ties into the next question, which is obviously, you know, EBITDA was a big beat in the period. Some of it is clearly reflective of, you know, some of the programming timing, which obviously has implications also for, you know, some of the pressure you're seeing in advertising to a degree. Also as you alluded to earlier, you know, you're coping with some of the top-line challenges with a real handle on curbing discretionary spend, at least through the first half of the year, maybe longer. Is there any way you and/or John can maybe speak to any particular issues where, you know, it does look like you're getting government regulatory relief on some fees? There are savings here. It's not as though we necessarily need to assume that, you know, costs in Q1 that naturally would have occurred, notwithstanding timing of deliveries, you know, it's not like there's a big lump sum to suddenly materialize in Q2, Q3, right? Amidst some of the savings that are going on. Is that a fair comment? I think generally that's a fair comment, Adam. To Doug's comments, it's really hard to predict. I mean, if we had been talking two weeks ago, I would have thought that Q2 was probably going to see some modest year-over-year increases in programming. The way the schedule is getting delivered, but I don't even know we can say that right now. you know, well, it's changing by the day, obviously. Right. I would expect some increases in Q2 and Q3 on programming just because of the way it's flowing. Sure. That's pretty hard to predict right now. We're, you know, we're keeping track of it on a day-to-day basis, but it's hard to get, you know, nailed down schedules right now from the studios. On the, on the regulatory fees, you know, we had the Part I fee savings. That's relatively modest. I mean, you know, it's important, and we appreciate the support. That's only a couple million dollars for the year. The big, bigger piece is the Part II fees. That's over. Yeah. CAD 8 million a year for us. That wasn't recorded in the quarter. We're still working through, the CRTC has attached some conditions to that, we just want to make sure that we understand what those conditions are and that, you know, how we can fulfill them. Maybe I'll add some more color. I don't expect, for example, the programming savings in Q1 to, you know, be all made up in the full last three quarters of the year. It's not as if there's a wall at the end of Q4 and all the programming money just stay in the fiscal. I don't think that's going to happen for a second. Right. I do believe though that there's gonna be an unusual and potentially beneficial schedule impact for us in Q2 and Q3. Q3 is a high demand quarter. We actually will have more shows in simulcast going into that high demand quarter than we've ever had before in the history of our company. You know, to the extent to which there's demand from advertisers, we're pretty confident we're gonna get the impressions 'cause folks aren't doing much, right? They're all locked in their homes. You know, it could be a very positive reality. I think the truth of it is, you know, Q1 was the first hill of the fiscal year. We took that hill. We, you know, put the Corus flag on top of it and celebrated a good quarter. Q2 is the next hill. Q3 is the next hill. That's how we're running the business right now. Okay. Up and to the right. I'll leave it there. Up and to the right. Thanks a lot. That's right. Thank you. Happy New Year. Your next question comes from Drew McReynolds of RBC. Your line is open. Thanks. Thanks very much. Happy New Year to both of you. Just following up on Adam's question, just overall on TV programming costs, maybe asked a little bit different for you, John. In terms of, you know, kind of what you see as an underlying run rate for the business, if you kind of put out of the question, delays in the schedule and a new cadence, but you know, maybe it's difficult to answer. In terms of kinda the margins of TV, or said a different way, the underlying programming costs that you're incurring on the TV side, how do you see that evolving kinda post-COVID, if at all? Yeah. It's a good question, Drew. Look, the view's changed a lot in the last year. You know, if I look at the renewal of our bigger output deals, and those are primarily specialty, I'd say, you know, there is some cost inflation for sure, but with that comes additional rights. Think, you know, more digital platform rights. Think, you know, potentially more back catalog that can also feed some of those platforms. Yeah, I would say whatever normal is or may be going forward, we'd probably see some modest increase in programming costs. I think that's, you know, not surprising to anyone. Right now, it's just really hard to predict. There's so much volatility in conventional right now, given, you know, the pay-per-play model that we have for simulcast content that, you know, that's what's causing us to pause a little bit and we're not trying to be cagey at all. We just don't really have a firm grip on exactly how that's gonna play. We know what we've committed to, and we know what the cost of it is. We just don't know when it's coming. Yeah. Yep. Okay. No, that's helpful. Just switching gears a little bit, the impact of the second wave here, you know, you've obviously talked about the cadence of the fall schedule and delays and what have you. You know, more on the advertising side, you know, versus what you experienced, I guess, back through April, May, and then managing through the second wave with renewed shutdowns. Like, is there anything, presumably Corus, not unlike other companies, are just managing this on a more efficient or effective basis. Is there anything you can flag as to, you know, what may be better or worse through the second wave in terms of the business environment that you're having to deal with? With regards to advertising in particular, Drew? Yes, exactly. Yeah, for sure. I would say as a general matter, companies are realizing that they need to keep their brands front and center in front of audiences. There's a groundswell of brand-driven advertising that we've seen in the last quarter, and we continue to see coming in. That, you know, that's less about, you know, ringing the cash register. It's more about, you know, keeping brands front and center in the minds of Canadians. As far as categories, we do a very detailed category by category build up with our revenue management modeling. We're seeing gains. You know, we're seeing nice gains in categories like packaged goods, financial services, video games, and not surprisingly, alcoholic beverages. We are seeing declines in entertainment, you know, cinema, travel, health and beauty, restaurants. That's again, not surprising kinda to anybody. In direct to consumer, it's a bit of a mixed bag, you know, on the travel related direct to consumer, Expedia, trivago, you know, those kinda accounts are, you know, still not back to where they were. Home furnishing, you know, eyewear, you know, those kinda categories are growing. You know, really the path forward is, as I mentioned in my comments, is our sales team, you know, really working in concert with all of our advertisers of every, each and every size to help understand their business needs and help provide solutions. You know, the great news is we still have a very attractive, highly differentiated suite of linear services with a growing digital platform to complement that and radio and integrations with Tempo and so.da. We continue to, you know, advance our advanced advertising ambitions and serve the needs of those advertisers. That's kinda how it's a customer first sort of approach with our suite of services. You know, that's why we've been able to show, you know, sequential improvement in our advertising trending, along with, of course, you know, a gradual and recovery in the overall economy. Okay. That's, yeah, that's helpful, Doug. Last one for me then, just on the TV ad tech side. Just, just remind me, we've obviously got a lot of BDUs here in Canada deploying X1 and, you know, Shaw's there, Rogers, Quebecor making kind of their push here in 2020, 2021. Just, just remind me kind of on the ad tech side where the status on that platform is from your perspective. Well, it still remains a very, very significant priority on the revenue team and the tech team to continue to invest significant amounts of money year over year as we have been. I think I shared a number with you all last time that, you know, since we bought Shaw Media, we've invested more than CAD 50 million in building out our capabilities, and we'll continue to do that. As regards to platforms on X1, you know, and Mediaroom, you know, we're working with That's the good news. There's two dominant video distribution platforms in Canada. You know, we have vertically integrated BDUs in each of the platforms that wanna optimize their business. You know, we're working with common segments across the nation and a shared ambition to, you know, help really put Canada on the map globally as a leading advertising economy from a television perspective. You know, that's why we decided to reveal, you know, a new vocabulary today with our kind of optimized revenue metric, which is the sum of, you know, our audience-based buying, linear optimization in Cynch, as well as our new platforms, which is, you know, the growth we're having sort of off the traditional linear system. Because it's just another example of the work we're doing to diversify our revenues and find new areas of growth to get to that year-over-year-over-year consolidated growth ambition that we're confident to achieve. Okay. Thank you. Thank you, Drew. Happy New Year. Your next question comes from Vince Valentini of TD Securities. Your line is open. Thanks very much. Let me start with these nice new charts you've given us on optimized revenue and new platform revenue. Just to be clear, John, is there any overlap between these two charts or are these two very discrete buckets? Yeah, they're discrete. Add to 26. Yeah, they're discrete. They're discrete buckets. Yeah, no overlap. Perfect. Second, let's get nitpicky first before big picture. The quarter was obviously very strong for the most part, but I'm not sure why corporate costs were up so much. Was there something in share-based comp or? Yeah. Some other unusual timing issue? It's mostly share-based comp, I'd say. I can pull a detail for you, but that's the biggest movement, and that's due to the share price, obviously. The other costs beyond that were up, you know, a couple hundred thousand CAD, and that's probably 15 different moving pieces plus and minus. Yeah, share-based comp is the biggest part of it. And, uh- You know, it was up over CAD 1 million in the quarter. Okay. In terms of the bigger picture advertising, Thanks for the categories, Doug. I didn't hear you mention automotive or telecom, which tend to be, especially auto, pretty big segment. Any just color on those given that you shed some light? On some of the others? Is automotive recovering? Automotive, thank you. Our research and insights team just did a crackerjack piece of research with Canadians that individuals and households, you know, have one of the highest purchase intentions of buying a car within the next two years that we've seen in a decade at the moment. Part of that, I think, is the fact that their cars are all old, also people are realizing that they may not be able to take public transit, you know, when things return to the next normal. We're seeing actually a nice rebound in automotive advertising coming back. You know, certain brands are all over us right now, other brands we're kind of convincing that they need to be there given this compelling research. From a household perspective, the business, I think, is recovering quite nicely. From a fleet perspective, you know, rental car businesses and such, not so much, right? That's kind of, you know, flatlined at the moment until people get back to tourism and travel. Telecom is still a good category for us. It's down somewhat, it's still a substantial part of our mix. Okay. Lastly, just packing that all together, I mean, the standard question you usually get, I haven't heard asked yet is, do you have any thoughts on Q2 in terms of TV advertising revenues? December is the biggest month of that quarter, and it's already over, and we're hearing anecdotally from others that advertising trends were pretty good in December. Is there any chance you can get down to a single-digit decline in TV ad revenue in fiscal Q2? I think what you're hearing anecdotally is our experience as well for December anyways. Some of that, of course, is, you know, notwithstanding my comments about there's not a wall at the end of Q4 on programming, in some cases, if you're a CMO, there is a wall on the end of the calendar year. You know, they'll use it or lose it. A lot of dollars came in across the whole country, I think, towards the end of the calendar year. You know, Q2 is off to a good start. Of course, we're all getting down partial lockdowns, of course, right? You have to temper that with what's gonna happen in January and February. All that said, you know, we're still strongly of the view that the back half of our year will be notwithstanding, you know, obviously very significant growth 'cause we're gonna be sort of less COVID over, you know, the debut of COVID a year ago. The first half of the year will be sequential improvement month to month to month, and then we'll turn the switch, and it'll be positive in the back half of the year. We're still. All of our revenue models indicate that that's the confident outcome. Thank you very much. You're welcome. Happy New Year. Thanks. Your next question comes from Aravinda Galappatthige of Canaccord Genuity. Your line is open. Good morning, Doug and John, and Happy New Year. I've got a couple of questions. I'll start with, I think where Drew left off on the ad tech front, with respect to the optimized revenues. Is there have you started to sort of book in, you know, dynamic ad insertion on VOD yet, or is that still a work in progress? I guess connected to that, is, you know, what you have in disclosure is sort of your digital ad revenues, you know, including what you're accruing from Global app. Any commentary around that growth and the materiality of that component? The Global TV app will be the those numbers will be rolled out in the new platforms metric that we just revealed today. Yeah. Yeah. They're in there. All the digital revenue's in the new platform revenue. Yeah. Yeah. That will be. DAI on VOD is coming along. It's still, we're still sort of setting the table on that one. The team is very acutely aware of the opportunity that exists in that, given the fact that now we're offering full in-season stacks of all of our big shows on the majority of our BDUs, similarly on STACKTV. The opportunity to monetize those impressions are not lost on anybody. There just is a bit of a technological roadmap that we need to kind of navigate with the various platforms to turn that on. I would say we're, you know, we're currently in that business, Aravinda, but it's gonna hit its stride, you know, in the coming quarters, and that will also be captured in our new revenue metrics. Okay, great. On, you know, the balance sheet, obviously your free cash flow obviously benefited from a couple of items, including the wage subsidy inflows. Your free cash continues to be strong. You're at 3.1x. I think any reasonable estimate does get you below 3x. As you kind of cross that threshold, Doug, does that make you think a little bit differently about asset mix, about investing, about M&A? Would you still kind of focus on continuing to kind of pull down the, you know, balance sheet leverage and de-risk, even towards 2.5x or below before you know, maybe reconsider the asset mix and maybe look to get more aggressive on that front? Good question. Something we're thinking about a lot, and always have been for that matter. My answer would be, until we have full and clear view of the regulatory backdrop, we're gonna keep paying down the bank debt. I just wanna make sure that, you know, we have a line of sight to the new regulatory world order. You know, we remain cautiously optimistic that the leveling of the playing field will benefit us in terms of, you know, reduced obligations, more flexibility, more incentives, for us to do certain things that are on strategy. You know, this notion which I applaud wholly, this notion of conditions of service, which effectively means it'll be bespoke, regulatory licensing between regulated actors like Corus and the commission as opposed to a one size fits all conditions of license. You know, that will help us to get more surgical in terms of any sort of portfolio strategy. You know, we're still in a pandemic. We still are, you know, being very focused on cash maximization, de-leveraging the balance sheet, that will impact equity share value, as will, you know, the return to consolidated revenue growth. That's our real focus with the existing mix of assets at the moment. Okay. That's helpful. Thanks, Doug. Then last question for John. I think when you talked about some potential increases in programming expenses in Q2, Q3, I presume you're talking about the program amort, you know, which goes into the P&L, the EBITDA rather than the actual cash spend, which obviously saw a very sharp swing in Q1, I think something around CAD 134 million to CAD 90 million when you add the two pieces. That I suspect will be even more volatile. Any kind of color on how that would shape, just to get a sense of how we should think about free cash flow towards the following quarters? Sure. I mean, you know, as you noted in Q1, the kind of usual relationship of amort and cash being relatively similar kind of diverged. As much as we had the savings on the amort line, we had bigger savings on cash. Part of that has to do with how we closed 2020, and how caught up we were at that point on programming. I think, you know, it also has to do a little bit with what's happening with Canadian production and that starting to ramp back up. Yeah, I mean, to give you the quick answer, yes, cash will go back to kind of normal levels and potentially ramp a bit in the back half of the year as production really starts to step up. Q1 was a bit unusual. You know, given the, given the place we're in right now with the slowdowns, you know, it's not that surprising, I guess, but it is gonna pick up for sure. Okay. Thank you very much. I'll leave it for others. Thanks, Arvind. Your next question comes from David McFadgen of Cormark. Your line is open. Oh, hi. Thanks. Yeah, I'll try my own question on the programming expenditures. Do you know the quantity of programming expenditures that weren't incurred in Q1 as a result of programming delays? Like, let's say it was CAD 5 million or CAD 20 million, CAD 10 million. Do you know that number? Or maybe you can't quantify it. He's digging around here. I'll while John sees if he can dig that out, I'll just give you a sense of the complexity that I appreciate everybody's trying to get at this number, as are we. Various things can happen, right? Start dates can shift, which has happened because you couldn't finish principal photography and so you can't do final edit and cut. Also that's happened, and that happened in Q1. What we don't know yet, quite frankly, on these big shows is did they get the full episode load produced? Did they get the 22 episodes done or is it gonna be 21, or is it gonna be 20, or is it gonna be 18, I mean, that's an uncertain reality. We don't know that level of detail. That has, as you'd imagine, David, relatively significant impact on your programming cost line. Then what we also don't know is, if they can't deliver some of these shows, will they, given our output deals, will they swap out another show which is within their right in certain instances, or will they have us do reruns, which is a different cost than again. Those are sort of the multitude of realities that are impacting on Global. Specialty is more or less set because we get As I said in the last call, the good news is all those shows on our output deals were kind of effectively in the can and less affected by, you know, the shutdowns versus the network shows. The other, the other factor that weighs on programming is the CPE, which as we know, was also affected. You know, we couldn't spend the money that we were going to spend. You know, that has come back to some degree recently, but it's likely, I don't know what Ontario government's announcing today, but something's coming out, I understand, and we might be back in hiatus again there. That's kind of why it's hard to give you any kind of a steer, and that was my comment about take the next hill because we don't really know that. That said, John has been digging. Do you have an answer, John? Yeah. Okay. I mean, for David, there's like, you know, as you can imagine, there's about eight categories that feed programming. If I look at conventional in particular, and I look at what we call foreign, so the U.S. stuff, that's really where all the savings came from. Actually on the Canadian side, we were up a little bit year-over-year. You know, that's probably the best handle we have. We would usually assume that the foreign costs on Global are relatively consistent year-over-year. There's not typically the same kind of timing effect that we had this year. I think, you know, was it going to be exactly the same as last year? We never really had a view of that, because, you know, we weren't in that place even back in the spring. Certainly, you know, that's where the savings came from. Okay. Doug, you mentioned CPE. Can you give us an update? Has there been any relief on CPE as a result of COVID? Are you gonna have to make up these CPE expenditures that you didn't incur in fiscal 2020 into fiscal 2021? Can you give us an update there? Yeah. The most substantive piece of information on that came in the fall when the commission issued a notice saying that they understood that the obligations of CPE that were affected by the COVID would need to be addressed over a protracted period of time, which puts us into our next license period. We're still waiting to hear what that actually means. But we don't, we're relatively confident that we'll have some flexibility to address that as part of our new license period, which will also incorporate the, you know, Bill C-10 and the Modernized Broadcasting Act. I think that's kind of part of this regulatory file that's kind of revealing itself in the quarters ahead. Okay. Just lastly, just on the merchandise and distribution revenue was up 11% in the quarter, do you think that the fiscal 2021 year would result in low double digit growth on that revenue line or it would be more high single digit? No, I'd say I think I've been quoted as saying double digits for forever. We do have a couple of tough comps, I think, in Q2. We had a big one-time sale to Netflix, I think last year, which will be, I think, a tough comp. You know, the slate is ramping up, you know, in both Corus Studios and in Nelvana. We've increased our investment in development a year and a half, two years ago, so we've got a big funnel of great IP. We continue to break new ground with streamers internationally. I spoke of Hardy Boys and Hulu. Our production frameworks are growing. redknot with Discovery Kids Latin America, for example, our Nickelodeon, one also has got a couple of exciting new shows we'll be announcing in the coming months. That is clearly our goal, double digit growth on the content side. Okay. Thank you. You're welcome. Again, if you would like to ask a question, press star then number one on your telephone keypad. The next question comes from Jeff Fan of Scotiabank. Your line is open. Thank you. Good morning, and happy New Year to you both. Going back to an earlier question, I think, about the ad spending environment. The one area that I think maybe wasn't touched on was ad pricing regarding CPM. There's a lot of things moving around, obviously, with programming. Given the low inventory and the spend, I would suspect that it held up pretty well through your, through your quarter. Wondering if you have any color on that and what's kinda driving that, if that is the case. How do you think that's gonna look with low inventory kinda continuing through the second quarter so far? Sorry, Jeff, I just wanna confirm, your question's on CPM? Yeah. It was on ad spend and then pricing. Yeah. Yeah. I would say pricing was solid in the first quarter because there was the return of a bunch of demand. We did have some capacity issues. In other words, we did have some programming that shifted out of the quarter or was delayed, and we had to supplement that with some sort of new acquisitions in simulcast to meet the demand. Our CPMs held up nicely. I think the tale there will really be predicated upon the recovery of the health crisis, right? I mean, my expectation is, given the fact that, you know, there is a whole bunch of cash on the balance sheet of Canadians' households across the country, I think it was Dave McKay from Royal Bank yesterday came out talking about, you know, the recovery expectations that he feels are quite, you know, promising, that will drive a lot of advertising, and our pricing power should be pretty good. I'm feeling pretty good about CPM. Again, you know, balancing the demand and supply is always, and will be this year more than ever, the art and the science of our business. At the minute, they're holding up well. Just to your earlier comments, was there, like in companies and advertisers spending their budget for the December year, are you saying that there could be a bit of a slowdown in how spending may occur here in the early calendar year, based on what you've seen so far? I'm just trying to clarify what. It sounds like it was strong ending the calendar year. So far in the early calendar year, what's spending like? There's I mean, in the system, there's a ton of spending. I mean, the I mean, I referred to the World Juniors earlier. I mean, that was, you know, that was a, you know, that was a fantastic broadcast result. You know, kudos to our friends over there at, on Queen Street. You know, they shot the lights out with that one. I think, I mean, basically, January and February are gonna be caught in the, on the partial or complete shutdown if that happens. At the moment, pacing looks pretty good for the quarter, relatively speaking, given that it's not a normal quarter in any given normal year. You know, again, as I said, it's really you gotta take each month at a time and the team does great work balancing demand and supply. On your CPM question, I would tell you that we are seeing increasing CPMs on our digital platforms. You know, there still remains a lot of demand there that we're able to take advantage of with price. Great. My next question's just on the new revenue performance metrics. I would reiterate that happy to hear, to see some of those. I wanna zero in on the new platform revenues. I'm wondering what do you think will be the biggest contributors driving that mix higher going forward? Well, the new platforms is a combination of, you know, our OTT ambitions, the STACKTV would be in there. Nick+ is in there. Our Global TV app is in there. Our Global News OTT product, now we've got nine different Global News OTT products available, would be in there. You know, those are basically all of our, you know, putting more content in more places, you know, basically moving beyond the legacy channel business effectively. That's what is in that category. Okay. Finally, just wondering if you have any comments on Discovery+ and what they may or may not do in Canada. I mean, if you can't comment specifically there, wondering if you think they'll look more like a Disney+ where they'll go more direct, or does it look more like a Peacock where Disney or Discovery original shows might be part of future output deals? Wondering if you think how you think they'll treat Canada. The honest answer is we don't know at this juncture. We are obviously in ongoing discussions with our partners. You know, congratulations to them on their launch. They've got, you know, out of the gate nicely in the U.S. and the U.K. You know, the Canadian situation, you know, is something that we'll be focused on in this coming year. You know, we're working with all of our key partners on understanding how best to monetize, you know, the opportunities available in the streaming business, NBC, you know, Viacom, Discovery, all of them, you know, Hallmark. You know, that's, I think that's gonna be something that'll kind of evolve in the quarters ahead. What is not lost on anybody is the unbelievable success of STACKTV. I mean, it is just a locomotive. You know, we've been purposefully focusing on how big is big over the last, you know, 12 weeks. It continues to surprise us on the upside. You know, that's partly why we wanted to put out these new metrics, so we can help to continue to break out the success there, because it certainly is unpacking a real opportunity, and it's a different product. This is the thing that I think is really noteworthy. It's not an SVOD, you know, binge viewing only product. It is a combination of a lean back traditional resilient television experience where you just wanna channel surf, and it's a lean in binge view on-demand type SVOD product with the in-seasons STACKTV. That is a unique product in the global marketplace at the minute, and certainly in Canada. I think it's providing cord nevers and perhaps cord cutters with the opportunity to experience both on-demand consumption, but also the traditional lean back television experience, and they're loving it. You know, we're just gonna continue to put the pedal down on this business, and we'll keep reporting back to all of you in the quarters ahead. It's part of our up into the right thesis for sure. Great. Thanks, John. You're welcome. [inaudible] Thanks, Jeff. There are no further questions at this time. I will now return the call to Mr. Murphy for closing comments. Thanks, Chris, and thanks everybody for your interest and attention today. We will look forward to speaking with I think all of you today at some point. Once again, just a sincere thank you to the Corus team across the country for all your hard work. Everybody, please stay safe and be well, and we look forward to speaking to you in the weeks and months ahead. Thanks very much. Bye-bye. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.