Thank you, operator, and good morning, everyone. We hope that you and your families and friends are keeping healthy and safe at this time.

Welcome to Corus Entertainment’s fiscal 2020 second 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 support slides for this call. You can find them on our website at www.corusent.com under the Investor Relations section.

Now let’s move to the standard cautionary statement found on Slide 2. 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. With that, I’ll offer some perspective on how Corus is managing our business through this challenging environment, and then we will briefly review our second quarter results.

Turning to Slide 3. What an unprecedented time we find ourselves in today.

Since the COVID-19 virus reached its pandemic status a few short weeks ago, Canada’s focus has been on keeping everyone safe and healthy. We applaud the government’s efforts to manage the situation, while providing Canadians with the information and guidance they need to stem the spread and flatten the curve.

We also extend our gratitude to Canada’s frontline workers from our first responders and healthcare professionals to those who are equipping us with essential supplies and services. Canadians across the country are demonstrating incredible resilience and adaptability during these uncertain times.

The same is true of our people here at Corus. Our workplace is being impacted by COVID-19 much like other businesses across Canada and around the world.

Our utmost priority is to ensure that health and well-being of our employees, who continue to diligently serve the needs of our audiences, clients, and agency partners. We deeply understand that one of our foremost responsibilities as an essential, national, and local broadcaster is to provide the public reliable and timely news and entertainment programming, particularly in times such as these.

On today’s call, we will take this opportunity to provide you with an update on how we are navigating the COVID-19 environment and the steps we are taking to maintain business continuity, while we remain focused on advancing our strategic priorities. Led by our strong management team, we are well positioned to weather this, and we are acting decisively in managing our operations and financial position with the utmost of prudence.

Let’s turn to Slide 4. I’d like to take a moment to briefly review with you what we know, what we don’t know, and what we’re doing as we navigate these unchartered waters.

Here is what we know. At Corus, we were quick to implement physical distancing and other measures as recommended by Public Health Agencies.

And where possible, our employees are working at home. We are united in our support of working with all Canadians to flatten the curve.

With these new working arrangements now in place, we are open for business and working with our clients and agency partners to find creative solutions to adapt to this environment as we continue to provide our news and entertainment programming for Canadians. We know that as an industry, total TV viewing is up 10% across the country as people are isolating at home.

At Corus, we have seen material audience growth across our portfolio, including some significant shifting of audiences as a result of the cancellation of sporting events. With the Summer Olympics being postponed, we expect further audience shifting in favor of our Corus channels in the summer.

Viewership on news is, as you can imagine, up to record levels. Audiences are turning to Global News and other broadcasters to keep abreast of the latest news and information across Canada and in their communities.

Over the last two weeks, viewing patterns were up when compared to the spring season to date prior to social distancing measures being put in place. Let me give you a few examples.

Corus overall is seeing a 23% increase in total audience delivery. Our conventional network global is up 41% and Global News up 51%.

Our specialty services are up 18%, and our kids’ business is up 25% and Global News Radio across the country is seeing significant growth. We also know that we are seeing increased activity across our digital platforms.

Over the past three weeks, globalnews.ca had almost doubled the web traffic versus the three weeks prior, averaging 2.8 million daily unique visitors. STACKTV and Nick+ on Amazon Prime Video are also experiencing a leg up and paid subscribers, with new subscribers as compared to the prior four-week trend.

We have also seen impressive uptake on our newly expanded Global TV App that now offers free 24/7 news streams, as well as access to Global and up to six of our top specialty networks, both live and on-demand, depending on the user’s cable subscription options. We saw almost triple the amount of downloads in the last three weeks since its launch on March 3.

Today, we’re announcing the addition of Adult Swim and Nat Geo to the Global TV App now offering access to eight specialty channels. Further, the Global TV App is also now, as of today, available on Roku and Amazon Fire TV.

Our investments to deliver more content in more ways help us to better serve both existing subscribers and Canadians that don’t subscribe to the cable bundle. We know, not surprisingly, that ad revenue is effective.

Clients are focused on their own pandemic plans, the safety of their people and work-from-home protocols. Many companies are adjusting their creative and advertising messages to more appropriately suit the current environment.

Consumer-facing businesses, which have been the one hardest hit to date, such as restaurants, airlines, travel business, hospitality have for the moment cancelled their advertising campaigns. Some clients are pausing, reducing, or delaying advertising investments, while they assess the impacts of the situation on their business.

That said, all clients are preparing for an eventual return to normal operations. As a result of this, we anticipate that there will be a material disruption to advertising revenues, while the restrictions across the country remain in place.

Our agile and innovative team is displaying tremendous resiliency and supporting our clients as we help them navigate through this challenging period. Further, we’re working diligently to size the financial impact and adjust our business operations accordingly.

We also know that virtually all of the productions in Canada and the U.S. are on hiatus at the moment This has resulted in real hardship for the production community.

At Corus, we have had to shorten the time series and delayed production altogether on others. We’re still assessing the impact of this on our business.

Having said that, programming for the third quarter is mostly completed with schedule set. I’ll come back to the production topic later in my remarks.

Now, there are lots of things that we don’t know. First and foremost, we do not know how long the isolation restrictions will remain in place and when we will experience a flattening of the curve.

We don’t know what the knock-on impact will be economically and how it might affect cord-cutting and cord-shaving. It remains to be seen how advertisers will adapt their go-forward strategies, given the economic slowdown and how they’ll return to a new normal.

And we are unsure what the impact will be on the entertainment industry’s programming and content supply chain. And finally, despite massive growth in viewership during the COVID-19 crisis, it is difficult at this time to determine how effectively we can monetize these audiences.

Okay. So that’s what we know and don’t know.

Here’s what Corus is doing. Against the backdrop of this uncertainty, I’m exceptionally proud of the work the entire team is doing, and I’m confident we’ll exit this global crisis in good shape.

We are firmly focused on business continuity. The entire Corus family has been working tirelessly to provide programming, whether news or entertainment across our networks, and we are ensuring we are well-positioned to return to normal operations when the situation allows.

We remain committed to bringing news to Canadians. It’s at times like these that one is reminded of the critical role that news organizations play in our society.

We are very proud of the work our Global News team does each and every day to ensure Canadians are well informed, offering a around-the-clock news and information when it is needed the most. Given that so many Canadians are at home rediscovering television, we have also launched a mix of both nationwide and targeted free previews on many of our networks to provide high-quality content to all Canadians in concert with our BDU partners.

And given that all production is on a hiatus, we know that we have received substantial inbound interest for licensing content from Nelvana and Corus Studios from broadcasters and streaming platforms that rolled over. At Corus, we have a solid financial position.

Thanks to the focused efforts of our team over the past few years to manage our cost structure and delever the balance sheet. Further to that, we have already taken significant and immediate steps to manage our cost structure.

These include a hiring freeze, cessation of all travel and entertainment, and the elimination of all discretionary or non-essential expenses, such as our annual upfront. In addition, we are evaluating the impact on our programming costs, given the widespread production shutdown.

And our discipline doesn’t stop there. As the situation evolves, we’ll continue to assess the impact of the COVID-19 crisis on our business and take any prudent, but necessary measures to navigate this environment.

With that, I’ll hand it over to John to review our current financial condition and measures we are taking as precautions in this environment, as well as our Q2 financial results. John?

Thanks very much, Doug. Good morning, everyone.

I hope you’re all well in keeping faith. I’ll start now on Slide 5.

Our focus on rapidly deleveraging the balance sheet, maintaining financial discipline and increasing our financial flexibility has been evident over the past six quarters. Over that period, we have repaid $337 million of bank debt, that includes $87 million of bank debt we paid down in the first-half of fiscal 2020.

This has resulted in a report leverage of 3.0 times net debt to segment profit at the end of the second quarter, which includes the impact of the adoption of IFRS 16 at the beginning of the fiscal year. Absent this change, net debt to segment profit would have been 2.79 times.

As a reminder, the company’s debt is held solely by large financial institutions. The credit agreement, as well as amendments to the credit agreement are filed on SEDAR at www.sedar.com.

Calculation of leverage under the bank credit facility for purposes of testing compliance with the leverage covenant of 4.0 times total debt to bank cash flow differs in several respects from the reported leverage of 3.0 times. However, at the end of the second quarter, this result was coincidentally very similar.

The implication of this is that, we have almost a full turn of cover available under the bank leverage covenant. With this financial flexibility, we are well-positioned to navigate this unprecedented period.

We exited the second quarter with $58.5 million of cash and cash equivalents and our $300 million committed revolving credit facility, which expires in 2023 remaining undrawn. As of today, we have $25 million drawn under the revolving credit facility, which is reflective of normal course working capital flows.

This committed revolving credit facility provides the company with sufficient liquidity to operate in these uncertain times. Our financial priorities remain unchanged.

Importantly, we remain committed to increasing our financial flexibility over the longer-term. In this environment, however, we believe it is prudent to conserve cash out of an abundance of caution.

As such, the company expects to refrain from buying back shares under its share buyback program in the immediate term. Consistent with this approach, while the March 31 dividend was paid as scheduled yesterday, the Board has elected to defer its decision on the declaration of the June 30 dividend payment at this time The outside date for a decision on the declaration of the June dividend is June 9, by which point the company expects to have more clarity on the nature and length of the impact of the COVID-19 pandemic.

To be clear, we are not reducing, eliminating or temporarily suspending the dividend at this time. Diligent management of capital and reducing costs will be in focus as we navigate through the unfolding COVID-19 environment.

I’ll now provide a brief update on our Q2 results starting on Slide 6, before handing the call back to Doug. Our second quarter performance represents a solid result, particularly given last year’s unusually strong TV advertising revenue growth of 11% in Q2.

Consolidated revenues of $376 million declined 2% compared to the prior-year quarter, or 1% pro forma for the disposition of TLN last March. This result was driven by lower advertising revenues, partially offset by increased revenue from our content business, reflecting the benefits of our revenue diversification strategy.

Our subscriber revenues remain resilient, growing 1% pro forma for the disposition of TLN. Consolidated segment profit of $116 million for the quarter was up 2% over the prior year, or 4% pro forma disposition of TLN, reflecting the benefit of general administrative cost savings and lower programming expenses, which were mostly due to the timing of our Canadian spend and the transition to IFRS 16.

We delivered consolidated segment profit margins of 31% for the quarter and that’s up from 29% last year. Consolidated net income attributable to shareholders for the quarter was $18.5 million, or $0.09 per share, and that compares to $6.3 million, or $0.03 per share in the prior year.

Free cash flow of $65 million was lower than the $84 million in the prior-year quarter, reflecting a catch up from Q1 on program right spend and higher restructuring costs, partially offset by higher segment profit, removal of lease payments under IFRS 16 and reduced interest payments on bank debt. Free cash flow for the first-half of fiscal 2020 was $118 million, compared to $126 million last year.

Now turning to our TV results on Slide 7. Overall, TV segment revenues were down 2% or flat for the quarter pro forma disposition of TLN.

TV advertising revenue declined 6%, or 5% pro forma, driven by lower audience levels on our specialty services and the reinstatement of simultaneous substitution for the NFL Super Bowl on a competitor network in the quarter. Our advanced advertising initiatives continue to perform well, represent 24% of English TV ad revenue in Q2.

As we noted earlier, these are solid overall results, given the tough comparables of 11% TV advertising growth in the prior-year quarter. TV subscriber revenue was down 2% compared to the prior year.

But adjusting for the disposal of TLN, subscriber revenue would have been up 1%, reflecting the strength of STACKTV on Amazon Prime Video and a retroactive adjustment upon renewal of a distribution agreement in the current year quarter. Merchandising, distribution and other revenues were up $8 million in Q2, representing a 50% increase over the prior-year quarter.

This reflects a higher number of deliveries in Nelvana on current productions, compared to the prior year and a completed sale of subscription video on-demand programming and increased merchandising revenue from Nelvana. TV expenses in the second quarter were down 3% over the prior year and direct cost of sales decreased 1%, while general and administrative expenses were down 6%, benefiting from a reduction of revenue-based costs, lower transmission costs and the implementation of IFRS 16.

Overall, TV segment profit increased 2% in the second quarter and TV segment profit margins were 33%, and that’s up compared to 32% in the prior year. Now quickly turning to our Radio results on Slide 8.

Radio segment revenues were $28 million and that’s a decrease of $2.5 million for the quarter, impacted by softness in the retail advertising environment, as well as continued economic and ratings challenges in Alberta. Radio segment profit was $4.6 million, and that’s a decrease of $0.4 million in the quarter, given those challenging market conditions.

However, segment profit margin in the Radio of 16% were consistent with the prior year, reflecting our continued focus on expense control. With that, I’ll turn it back to Doug.

Thank you, John. Moving to Slide 9.

Q2 was a solid quarter for us, yet it feels like forever ago, given what’s been happening around the world. Before closing, I wanted to reiterate some key points.

We’re actively managing the COVID-19 situation. This includes: ensuring the safety and security of our team, managing our business continuity and contingencies; delivering the news and gaining the facts to Canadians in real-time; providing entertainment content to our audiences across our networks and platforms; working with our advertisers to address their business needs; and finally, we remain resolute in our financial discipline to maximize our free cash flow, manage our cost structure, and ensure continued financial flexibility for the road ahead.

While I’m always proud of what our team does, I’m incredibly proud of how they have risen to this new challenge. We have quickly adjusted our way of working to ensure our audience get breaking news and great entertainment programming without interruption.

Our teams are dedicated to supporting our customers, agency partners and suppliers through this uncertain time. At the same time, we recognize the toll that has taken on our people, particularly where we have seen the shutdown of many productions across Canada for Corus and our other industry participants.

We’re confident that when we are able, we will have our production back in full swing. Over to Slide 10.

On a personal note, this past week, we were deeply saddened by the passing of the Founder of our company, JR Shaw, who passed away peacefully at the age of 85. Corus would not exist without JR, and all of us are aware of the great contribution he made to our company and to the Canadian media and telecommunications industry as a whole.

From his tremendous vision and drive when he created our company in 1999 and the profound guidance and generosity of ideas he provided in recent years, he has defined our company. He was a classic builder and unbridled entrepreneur, get a saucepot for TV and radio.

He reveled in the success of others and provided his unequivocal support. Our heartfelt condolences go to his wife, Carol; to his children, Heather Shaw, Corus’ Executive Chair; Julie Shaw, Corus’ Vice Chair; and Brad Shaw, the CEO of Shaw Communications; as well as the JR’s grandchildren and great grandchild, not to mention, his extended network of family friends and business colleagues.

In closing, I want to assure all of you on the call that we have the utmost confidence and belief in our team and our collective ability to get through this together. As ever, we will be available to you for questions in the days and the weeks ahead.

We would like to acknowledge and thank our audiences and suppliers, clients, partners, and the government, both federal and provincial, as we all work together to weather the storm. Thank you, and back to you, operator.

Yes. Thanks very much, and let me pass on my condolences for the Shaw family as well.

Shaw was a great man.

Yes.

If I can start just on program rights and maybe more for John. So $148 million spent in the second quarter versus $127 million last year, and you are up $39 million year-to-date, is this just all timing in the CRTC commitments and given the production slowdowns, plus maybe you can comment on any relief the CRTC may be willing to grant you during these unprecedented times?

Should we expect to see a pretty material reduction in the amount that you spend on programming film rights in the second half?

Why don’t I take the second-half question, and I’ll let John address the first half, Vince, and thank you for your comments about JR. It’s obvious that given that all the productions in Canada are on a hiatus that there will be an impact on our programming, cash investments, and amortization.

At this juncture, it’s just too difficult to predict the size and scope of that. Obviously, we’re all hoping that we can get back in business on these productions as soon as possible, but to be prudent and safe, it’s likely that we won’t.

So that’s some of the work we’re doing. Right now, we’re staying close to our partners, both in the U.S.

and Canada to try to understand the status of their various productions. But I think it’s safe to say that there will be a cost and cash impact, which will be favorable, and the details of which we will be more able to provide in the next quarter results.

Based on the cash flows, you’re right, both in the quarter and year-to-date, we’re up about $21 million of cash out on programming. That is many, many moving pieces.

I’d say that larger pieces are around what you mentioned, the Canadian production. We did have a ramp up that was occurring for the back-half of 2020 and into the beginning of 2021.

So, you’ll see some effect of that in the second quarter for sure. There can also just be timing matters that happen quarter-to-quarter even over the year-end.

So, there’s a little bit of that on the foreign programming supply, but it’s mostly the Canadian, as you pointed out.

Okay. I’ll try to limit it to two more here.

I’m sure there’s lots of questions on the line. Let me ask one on costs first.

So, the restructuring costs were $10 million in Q2 versus $4 million last year. Is that in any way related to initial efforts to maybe try to reduce your cost structure?

Does that all predate the crisis? And in either way, can you add anymore financial detail to these discretionary costs that you talked about or trying to reduce in terms of the travel and upfront and other things?

Sure. So in the quarter, there were several things going on.

There’s, I think, ongoing restructuring that happens at Corus. It was not COVID-19-related, that wasn’t occurring in Q2.

So, two other things. So yes, there’s definitely that normal flow of activity.

The other things that were going on were we did shutdown another channel in the quarter that had some restructuring costs associated with it, some write-downs, and as well there’s some other infrastructure-type programs that are going on and those do drive some restructuring costs as well. So that’s why it’s up to that level in Q2, but nothing is related to the current situation.

And quantifying these discretionary costs, you talked about trying to reduce, is there any ballpark on what you are talking about there?

Well, I wouldn’t give you a number. But I think it’s safe to say that, we’re not – no one is traveling.

No one is going for dinner. We’ve seized all third-party marketing investments externally.

We’ve canceled our upfront. So, I think you could take a look at H2 last year and compare to what might be happening this year, and they have to make some relatively reasonable assumptions and get to a decent number.

It’s fairly meaningful, and we’re looking for more places to go. I mean, we’re committed to, as I said in my call, we appreciate the essential services that we provide.

And so, we’re balancing the prudent stewardship of our balance sheet with making sure we deliver news to our – to Canadians. So – but, I think it’s going to be a reasonably – a reasonable solid pickup year-over-year.

Okay. And my last one, as you can imagine, on advertising.

So, I assume, if you wanted to give us any sense of what’s happened in the last two or three weeks of March, and you would have done it, but I’ll throw that out there. But also, just specifically, you mentioned some of these categories, Doug, in terms of restaurants and so forth.

I still don’t see a fair number of ads for some restaurant categories in specialty, delivery and take out places to pizza companies and Swiss Chalet and even shawhotels.com at last night that was a new ad, not what – just one of the old ones. Is this just stuff that people have prepaid for, So they have to use the airtime as opposed to anything new that’s been committed and the ads definitely haven’t been canceled.

But how – can you just walk us through exactly what goes on in these categories that you say have gone to zero?

Absolutely. And I’m very pleased to hear that you’re watching more television, Vince.

That’s great. So no, there’s lots of – this is part of the – so a lot of advertisers hit the brakes and they’re retooling their messages.

So there’s a ton of examples in local and national radio and television. The hotels.com, example, Captain Obvious, I think, is a great one and it’s a new PSA urging us all to stay at home.

We – we’re seeing a new advertising campaign, some Garnier hair products basically with touch up products for your roots, not your roots, of course, but those of us that have roots. Ford – Ford has got a new campaign saying, for those of you who have leases need to rearrange payments, please reach out to Ford Subaru, has got supplies, thanking frontline workers.

These are all new campaigns that have been lit up in the last couple of weeks. So, in many cases, there has been a cessation of campaigns that were booked.

We’ve shifted dollars and we’ve tried to retool the message. We have other examples, locally of – you mentioned, restaurants doing home delivery, appliance stores trying to create shape shopping environments, IT companies helping Canadians set up home offices, professional service organizations, employment law, lots of those coming to the fore, automotive repair shops offering pickup and drop off services.

So, this is part of the work that the teams are doing. I mentioned creative solutions where we’re reaching out to all of our partners, because they still have businesses they have to run.

And the ones that are able to remain open are still looking for ways to drive sales. And then the ones that are required to be sort of shutdown, they are working feverishly to develop the return to normal, and we’re building campaigns at the moment for that.

So if that gives you a little bit of color, hopefully, that’s of use to you.

Yes, it’s very helpful. I’ll pass the line.

Thanks, Vince. You’re welcome.

Thank you. So also reiterating condolences to Shaw’s family.

And to you, Doug and John, hopefully, you and your families are healthy and well.

Thank you, Adam.

Maybe a little housekeeping item questions for John. And there are a couple more serious ones looking ahead for you, Doug.

Just on the housekeeping, John, in the Q2, it look like there was some one-timers in terms of retroactive adjustment for a new distribution agreement. Wondering if you could quantify that?

Additionally, an SVOD sale in other. So I don’t know if you could address that quickly or need to review that later?

And then maybe for Doug, I know Vince touched on this, I’m not sure if you answered it, but maybe I’ll push you a little bit. Pockets of relief hopefully will come from the government in a number of areas.

I know, there has been some relief in regards to Part 1 fees, but that seems to be more looking ahead somehow into the fiscal 2021. Maybe you could sort of clarify that, maybe even quantify that and address in the other areas of potential lease that you see potentially coming to further help address some of the top line pressure?

Sure. Hey, Adam, I’ll get into the numbers.

So on subscribers, there were two things – well, maybe three things in there this quarter. One is, yes, there was a retroactive adjustment on carriage agreement, that was about $2 million benefit to the quarter.

The two other things that we’re going on is, we did have the impact of the channel shutdown, two in the fall and then one more in December, that’s about a $3 million hit the other way. So those two items don’t quite offset.

And then, given that we were up 1% pro forma, you can imagine that STACKTV is performing well and it’s adding to that line. So those are the three kind of moving parts in subscribers for the quarter.

In terms of SVOD, that’s about a $3 million item in Q2. That particular deal is now on an 18 -month cycle.

So you would have last seen it in Q4 of 2018, so that’s why it’s there now. And just before Doug gets to the government relief, the benefit of the Part 1 fee reduction and these are based on the government’s fiscal year, so that’s April to March.

So starting now, that’s about a $2 million cash and expense benefit to us starting this month.

Yes, Adam, I’ve been in very regular contact with Ottawa, the Heritage Ministry and other players and we’re advocating for relief measures for the broadcast and production industries. We understand that government is working on a variety of programs to support multiple sectors in the economy.

Many of us – all of us who are impacted by the crisis, but there’s active discussion, so a couple of comments. Firstly, some of the existing measures that have been announced, for example, different remittance of GST, HST, QST collected from February, April through to end of June, penalty is a helpful on cash.

Similarly, the ability to defer income tax installments to September 1 with a penalty is another cash benefit. So those are things that are helpful.

John mentioned the CRTC Part 1 fees, there also has been the announcement of a wage subsidy, but we’re not quite yet of the details and visibility as to whether or not Corus would be eligible for that. From a regulatory modernization of the Broadcast Act, we have been, as you know, advocating that we need more rapid change than waiting to the next loop-based [ph] license period.

There is no doubt that this crisis has accelerated the need for modernization of broadcast policy, namely, we are strongly of the view that the sole obligation for us should be to provide news, local, national, television, radio, digital to Canadians timely and important basis. This is a pandemic that is rife with fake news and it’s our job to provide real news.

And that our traditional obligations of Canadian program expenditures need to be commensurately reduced. We’ll see how that plays out in a practical manner.

There’s no way that we can spend the money we have to spend this year, given the shutdown in production. And so it just goes without saying, I think, that the acceleration of changes to the requirements is inevitable.

But at the moment, nothing that’s been specifically revealed. But we do anticipate based on discussions I’ve been having that measures should be revealed in the coming weeks that would be mindful of the pressure that the broadcast and production sectors are under.

Right. So thank you for that.

I’ll queue up again.

Thanks, Adam.

Good morning. Thanks for taking my questions.

And Doug and John, I hope you guys are doing well. On the – I wanted to start on the dividend and sort of the decision to declare to kind of defer the declaration.

Can you give a little bit more color as to how you’re thinking about the dividend. I mean, is there sort of a red line in terms of the ad trends that you’re looking at, should that be crossed, and you probably think about the options you have, including suspension or reduction and so on.

And whatever color you can provide on what that red line would look like, given sort of the headroom that you typically have in terms of that – to that dividend. And then in terms of the ads, I was wondering if you – to the extent that you can, whether you can sort of give us a sense of the mix.

And, Doug, you talked about this on the most affected sectors, travel, airlines, et cetera. What’s the mix there?

So we can have a sense of make up our own minds as to where our trends could go?

It’s a hard one to really give you anything that I think would be very helpful. So, I mean, I think it’s – as I gave you some examples of retooling messages, obviously, airlines aren’t advertising right now, nor the hotels be advertising right now on travel.

So those are all basically done. In terms of the mix, I really couldn’t give you a number.

Maybe we can follow-up with you on that one. I’ll just make a couple of comments and then John can address your dividend question.

What’s I think really important for all of us to recognize is the world changed three weeks ago. Our first priority was the continuity of our business and our essential obligations to Canadians.

Our business strategies remain unchanged to diversify our revenue base, to build our growing content business, to focus on consolidated top line growth, save and except for the Super Bowl simulcast in the last quarter, I think, we delivered on what we said we would do. We are obviously at this juncture taking a very aggressive position on our cost structure, but we’re also supporting our employees across the country, who are working for Corus and isolating in their homes at this time with their families.

So our financial position is solid. But we’re recognizing that the world has changed and we’re just positioning our company to endure whatever lies ahead.

And then, as I say, always, it’s hard to look around the corner. And once again, it’s hard to look around the corner.

I’ll let John, talk a little bit more about the dividend.

Sure. Thanks, Doug.

Aravinda, as we’ve said, both in the press release and then in the prepared remarks, really is an abundance of caution right now, just given that, we really don’t know how long this is going to go on for and what the overall impact is ultimately going to be. So, I think, really, what’s happening here is, we do have time on our side.

We just paid the dividend yesterday. And the next one is not normally scheduled to June 30.

So it just struck us that the timing really doesn’t work in our favor. That timing is kind of a hangover from when we had a monthly dividend.

So the attitude of let’s just see how this goes. We’ve got lots of time, I think, is just being very, very prudent.

And, as I said, it’s not a reduction. It’s not an elimination, it’s not even a suspension.

Right now, we’re just saying, we’ve got time to decide this. In terms of some of the things we’re going to be monitoring very carefully and not just in respect to dividend is, clearly, what’s happening with the revenue trajectory.

And then, as Doug talked about it in a fair bit of length and we just don’t know what production looks like and what that’s going to translate to in terms of cost savings for us. So there’s a lot of moving pieces.

Obviously, we can work hard on the SG&A type costs, but there’s just a lot of unknowns right now. So I think, as we get through some of those uncertainties and things become a little clearer, then we’ll definitely be in a better position to make this decision.

Obviously, the payout ratio when you look at historical levels and historical levels of free cash flow has been quite modest under 20%. So that’s clearly something that is in the back of our mind and that will be a main consideration as well.

Thanks, John. Just a quick follow-up, and I apologize if I missed that during your prepared remarks.

With respect to the covenant, can you just clarify whether the covenant is sort of ex IFRS 16, or it’s actually factored in the accounting change?

Sure. So, I mentioned that the calculation is different, but quick, generally, the outcome is very similar to the net segment – sorry, the net debt to segment profit that we reported 3.0 times.

So here – here’s the three differences, just to be very clear. One is, it is before IFRS 16.

So debt levels are measured before the lease liability. It’s just the bank debt.

Number two is, it’s proportionate EBITDA effectively, it’s not consolidated EBITDA. It’s the other key difference, I think, in the calculation, and it’s on a trailing 12-month basis, which is what we also do for the reported number.

Okay. Thank you.

I’ll pass the line.

Thanks, Aravinda. Be safe.

Thank you for taking my question. And again, I hope everyone stay safe and work from home until this is over.

So I wanted to ask you a question. Yesterday, I was listening to the highest-rated radio channel here by the Bell Media Group in Montreal.

And for two hours, I did not hear one advertisement, which I kind of was stunned by it. I wanted to ask you on the radio side – we talked on the TV side.

But on the radio side, how are things going in terms of advertising? And it seems to me this more likely to be more affected, I guess, but from TV, can you maybe add some clarity on or some quality – give some quality in terms of where we’re going in terms of ad trends there?

Okay. Let me start with audiences.

So given the fact that, I mean, our news radio is up substantially. But given the fact that people are driving around anymore to go to work, the share on our FMs are down, because they’re not listening to music on their commute.

From a category perspective, you’re seeing stuff like restaurants, as I said before, our furniture stores, some of those other players, not advertising, professional services are advertising. Government has actually advertising quite a bit more now.

You’ve probably noticed maybe not in Montreal, but certainly here in Ontario. But the likely suspects in terms of categories, like movies, not advertising; auto, quite a bit slowed down, no one’s going for cars; real estate, open houses are not happening.

So those are all things that are kind of in the moment that we’re experiencing. I wouldn’t want to quantify it, per se, but I would say that, the local businesses are the ones, I think, they’re going to get – they’re most hardly hit.

They’re also the ones that, I think, the government is trying to support. So, I’ll just leave it at that.

Right. So yes, exactly.

So, on the radio side, it’s more probably local than on the TV side. But do you see a – Vince was referring to this earlier, some of the ads that you’re seeing right now on TV, are the – are they prepaid as or pre-agreed on slots that they are basically filling up, because they agreed to them historically?

And how about new ad campaigns? What – going into the next couple of months, how are you seeing those getting affected by COVID-19?

Yes. So thank you for the question.

So let me just give you a couple examples. We’re taking a – we’re immediate actions to minimize the short-term impact on revenue at large, and that’s both advertising and subscribers.

Let me just take a minute and kind of drill down into that. In terms of advertising, what we’re doing is, we’re leveraging our in-house production to ensure we can reposition the creative and to engage with new business initiatives, given the reality.

So restaurants turn their focus on not in-store dining, but on delivery, for example. I mentioned a couple examples earlier in my call about what’s been happening with other advertisers.

We’re also developing a banner, which you’ll see in the coming days, I hope or week anyways, call it, hashtag Canada together. And it’s a campaign with a number of kind of pillar advertisers that are reaching out to help shed a light on what great things Canadians are doing around the country during this time of need.

So we’re trying to basically use our platform to bring new creative and new messages to Canadians. And some of the examples also of editorial programming include the Ontario Medical Association; our Royal Bank of Canada with small business support programs; Clorox in terms of healthy at home series; and I mentioned earlier, the Government of Canada advertising.

So there’s a lot of things that are very, very fluid and again, complement to our sales teams, which are being innovative and creative in terms of providing solutions. That’s the advertising side.

I don’t want everybody to lose sight of the subscriber side, because there’s a very good story there and we’re focused on building deeper audience connections. Hey, listen, Canadians are rediscovering television right now.

This is the thing that people have a lot more time on their hands and it’s evident in some of the ratings we’re seeing. The global story is remarkable, not just news, but across the entire network, up 41% is unbelievable.

So as they rediscover TV, we’re working on improving the value proposition. So the new Global Television App is unbelievable.

It’s got global TV live and on-demand. It’s got eight specialty channels, assuming you get those in your bundle.

We’ve expanded the content before the wall to 14 days, so they can catch up as a free preview of all of our channels now beyond just the Global TV App across the country using BDUs. We’ve got globalnews.ca, which is a free website that Canadians around the world can go to for their information.

And we also mentioned in a remark STACKTV, which we’re promoting with a new campaign and Nick+ on our network to promote new subscribers. So the results of the Q2 on subscriber, I think, are notable, especially pro forma.

And we expect to continue to focus on those areas to ensure we can provide Canadians, who don’t have a cable subscription with our content and those that do to give them a better value proposition, so they’ll stay subscribers for the future.

Great. Okay.

Thanks for that. And my last question is on the cost side.

Can you maybe tell us what kind of costs initiatives or reductions we might see in Q3, Q4 to offset some of the top line pressure? And also when you think about the business going forward after we get out of this COVID-19 situation, which evidently, I think, hopefully, we will.

Are you seeing a potential cost change in structure of your business that can improve margins going forward as you learn from the current situation in order to improve your cost structure going forward?

Sure, Maher, I mean Doug covered a lot of those. I think your final point there is a good one and one that we’re definitely going to keep an eye on, as we continue through our new way of working for sure.

Doug talked about what we’re doing in terms of headcount, some of the discretionary costs, by definition, a lot of them have gone away or out of necessity, and other things that we’re looking to do. I think the biggest cost we have is programming.

And that’s where the biggest uncertainty is right now, just given that everything has been shutdown. So, that is definitely a moving target.

We’re talking to the U.S. studios on a very regular basis to understand what they’re doing.

Obviously, they have to keep programming on the air as well and that impacts global in particular. So, we’re going to continue to follow that and monitor that.

Canadian programming is shutdown. And that’s, for us, probably a more immediate impact, because we would typically be running that now as we get towards the summer season, especially in our lifestyle channels.

So the slowdown in that production will have a benefit to cost in the short-term. Again, we’re quantifying that on a real-time basis, just based on what we know, but that seems to be changing by the day.

So we’re going to continue to work hard. We sent people back and said, if you’ve got costs that are committed, let’s figure out if that’s actually the case.

Things can be in that category in normal business times, but perhaps they’re not going to happen. anymore.

So – and there’s lots of examples of those types of things, whether promotions or other events, or just other activity of really any kind that isn’t going to be happening right now. So, we’re going to continue.

We’ve got this on a very short leash in terms of the cycle of what we’re doing and how we’re looking at things going forward.

I’ll just add. This management team and our larger team of leaders got pretty good muscle memory on expense control and how to manage a challenging time, and we we’ll bring that same game to this situation adeptly, I’m certain.

Just to give you some examples. I think, your question about working differently is clearly one of the benefits.

I was with the friend of mine over the weekend, went for a long six-foot spacewalk and talking about what’s going to be different. And there’s no doubt, we have 75% of our population and roughly 3,400 people that are working there out of our offices, which is quite remarkable.

We have 52 radio shows that are being run remote in people’s homes, including John Derringer for [indiscernible] in the morning. There are a litany of examples of this.

We have news broadcasters who are self isolating like for an ASAR, who’s been at her home here for Global TV in Toronto. And as we do more and more of this, we’re learning more and more things about how we could be working differently.

And so, those learnings will continue to accrue as we deal with this crisis. And certainly, we’ll inform some different ways of doing things once we’ve returned back to whatever the new normal is.

But it’s hard to put $1 on that at the moment other than the fact that, we’re all at home. We’re all using Zoom Video or Skype for Business or we’re all using different technologies that are working well.

And I think that will open the doors to lots of interesting opportunities in the future.

Okay. Thank you.

Thank you, and be safe.

Thank you. Good morning.

My condolences to Corus and the Shaw family. And Doug and John, I hope you both well.

Thanks, Jeff.

I want to just focus a little bit more on the programming cost. I mean, there’s two aspects here.

I think you touched on a little bit regarding your production and your delivery of shows, as well as the output agreements that you have with U.S. studios.

So maybe on your production, Canadian production shutdown. It sounds like in your comment that you’re still delivering your shows through Q3, I just want to clarify that, that you’re still getting a delivery done on your end?

And then flip it to the U.S. output deals, I know what is – what are you getting from the U.S.

studios now in terms of delivery schedules through the next three to six months, like based on shows that have been produced and post-production? Are you going to get shows delivered to you?

Are there no shows being delivered? Can you just help us think through that a little bit?

And if there are no shows delivered, the commitment, I would suspect that you’re not going to be paying for any content. So that’s a big relief, because I’m going down this path, because this is very different from other recessions, I mean, the recessions have had just a revenue advertising impact.

But this has programming and distribution, delivery impact as well. So can you give us some visibility on the U.S.

studios and also your production?

Yes, happy to. And John and I will kind of tag team this one.

I think, I’ll let him speak to the kind of counting on output deals and such and I can make some comments just to the schedule. You’re right, this is a very unusual situation.

So just on conventional, where simulcast is an important part of the business model and which is all U.S. studio-based.

Most studios have already decreased their seasons show orders. It’s all very title specific and it all depends on where they were in terms of their production pipeline, some are in post, so they’ll be able to finish it.

For those that were doing principal photography, the U.S. situation is very disparate, right?

You’ve now got hodgepodge from Florida, Atlanta, Georgia, the big tax credit TV production area. California, of course, isn’t lockdown.

Texas actually is taking a different tack. We all know about New York.

So it is, as you can imagine, given the size of investments that the U.S. studio is making their content, there’s a wide variety of potential outcomes that we could experience.

So that will be more apparent. I think, as the months tick on, we have content on our conventional network through the end of Q3.

So Q3 is kind of locked and loaded for the most part. There may be a couple of examples of things that won’t occur.

But that’s pretty much good. As for Q4, that’s kind of jump ball, we just don’t know.

In terms of Canadian, we have a very good bank. Recall that we were – as of last year – given last year’s growth in revenue, we had to step up to spend this year, which is part of the thing we were talking about in terms of our obligations being onerous and unheralded even before the crisis.

The good news in that regard is, we’ve got a lot of shows that were made by Corus studios that will air on HGTV, Food Network and History. Those are the very same shows.

By the way that we’re getting the phones ringing quite a bit from U.S. buyers saying, I need content.

But that’s one of the things that we didn’t actually think about occurring when this happened was that, we’re seeing some content licensing businesses popping out of nowhere. That is an opportunity for us.

When you look at the cost on the Canadian productions for those ones that aren’t in the CAM, there’s kind of two things that happens. One is, we have to flow cash out the door to produce the show, which is a cash impact, doesn’t show up on EBITDA yet.

But that it hits EBITDA when it airs as an amortization. And so there’s a double kind of whammy effect here in terms of the production shutdown.

It’ll have a cash impact and it’ll have an amort impact depending on when the bank of existing shows in the can runs out and we can’t replace it with other content that would have been produced to the cash investment at that if you follow me. So that’s just a little bit about the dynamics of that.

To actually size that is virtually impossible right now just because of the uncertainty ahead. I’ll let John talk a little bit about the output deals on our specialty channels, because that’s an important piece of it, too.

Yes. So, Jeff, on U.S.

programming, obviously, a big part of the programming on specialty – on branded channels like HG, Food CMT, et cetera, those output deals from those studios are multi-year, and the way they get accounted for it is they’re capitalized upfront when the deal is done and then the amortization starts. So once they start, amortization isn’t going to stop.

Within the commitments in those deals, there are, in many cases, a minimum number of hours or new hours per year that we have been promised. So to the extent that this show – slowdown goes on longer, I guess, there could be discussions about that commitment and whether that should result in some kind of an adjustment in the price temporarily to get – before we get back to normal levels of output.

We do buy some standalone series for specialty. Again, those get set up when we buy them and they’re amortized over their life.

On the global side, Doug covered off what we’re seeing there. That’s what we call the pay per play model.

So as the show airs on a U.S. network in primetime, we are triggered – payments triggered and we tend to air those simulcast, obviously, to get the maximum audience.

That will continue as long as there were our new episodes available and being aired in the U.S. Then what we’ve seen in the past, I think, back to the rider strike in a way where there were no new shows available, so repeats start to be delivered.

The good news there is, we used to have a model back then where we paid the same price basically for repeat as an original. The model has changed significantly now.

So yes, we will still pay for certain repeats, but it won’t be at the same price as what we pay for an original episode. So I think that will be helpful going forward.

Now, obviously, audiences on repeats are different than audiences on originals. But given that there is a challenge in monetizing audiences, that is a different scenarios than what we’ve seen in the past.

So, there’s many different ways of receiving this U.S. programming and we’re obviously watching them all.

I guess, the thing I’d leave you with is, we’re monitoring these on a show-by-show basis. So we understand exactly what’s going on and what that financial commitment looks like to us.

And that’s, that’s why I said, we’re talking to the studios real-time just to understand exactly what’s happening with deliveries and the programming schedules, particularly on the conventional networks in primetime, because that’s where the bigger ticket shows are.

Let me just maybe add a couple of other comments. Again, I’ve used the term and I’ve used it purposefully that Canadians are rediscovering television, certainly, the millennials.

And the notion of having repeats over the summer might actually be a pretty good thing. It’ll be less expensive than typical and there’s no Olympics, so people will be at home discovering shows that they might have missed, because they were too busy doing other things before the crisis hit.

So, again, obviously, I think our teams would prefer to have new content. But the good news is, there is content that we’ll have and we’ll have an opportunity to attract more audiences over the summer.

If this got help us persist long and we know that the Olympics won’t be happening this year. I want to make a quick comment about Nelvana, because that’s also a part of the CP production side.

We’ve moved really quickly to move some of the big show’s out of the studio. We’ve migrated our crews to a work from home status, emphasizing the priority of certain series are scheduled for delivery this fiscal year.

Hardy Boys is a show that’s now in post production, which has been sold to Hulu, which is going to be delivered, which is a promising opportunity. Just on our merchandising side, while I’m talking about Nelvana, Bakugan was performing extremely well.

It’s obviously been put on hold for the moment. That’s, in my view, that’s simply a shift.

We’ll get that business. We’ll just get it in a couple of quarters versus getting it in the back-half of this year.

And then lastly, our Toon Boom Animation software business, they’re all working from home and that business continues moving along. So there’s a little color for you there on some other parts.

Thanks. Just a couple of very quick follow-ups.

Back on the output deals on the specialty side, did I hear you right that the amortization once you have those output deals signed, that doesn’t stop even as we go through this process?

Yes, that’s right.

Okay.

No, I mean…

What about the cash? Sorry, go ahead.

I was going to say, yes, that’s right. But I mean, no one has ever encountered this before.

So hopefully, it’s a temporary pause and not like a prolonged pause. But these are unusual times.

Understood. The cash component of those out deals, again, related to the specialties.

Were those all paid upfront already, or those on an annual or quarterly?

Yes, those are typically quarterly. And so those, again, will continue to run.

As I said, if there’s an underperformance in delivery of original hours, just to the extent that there’s a minimum in the deal, then obviously we’d want to be having conversations about how that was going to be compensated for.

Right. And then those minimum hours, are there stipulations on what’s new versus like something that’s kind of in the library, the type of content that they have to deliver?

Yes, each deal is different, but the minimum hours tend to be originals, right? That’s…

Okay.

…that’s where we can drive the most audience.

Okay. So in the end, like based on all this explanation, it sounds like there is a little bit more flexibility with the global programming costs versus the U.S.

programming, which is still kind of to be determined based on show-by-show, program-by-program, so is that a fair assessment?

Yes. When you say global, I think in Canadians.

Yes, Canadian, Canadian conventional?

Absolutely, that’s totally within our control. Foreign on global, subject to what the U.S.

studio is delivering what gets aired in the U.S.

Okay.

And then Canadian and CPE spend on specialty is the one that’s most impacted by the production hiatus. And that’s the one that has the cash and amort impact.

Okay, lots of moving parts?

That just did. It’s an interesting time for sure.

Okay, thanks for the explanation. Thank you, all.

Thank you, Jeff. Yes.

Hi, guys, thanks for taking my questions. So Doug, in your prepared remarks, you talked about material disruption and ad revenues.

I wasn’t sure if you’re talking about the industry, or you’re talking about Corus specifically, or maybe you’re referring both? I was wondering if you could clarify that.

And can you not give us any sort of idea, maybe with advanced bookings over the last two weeks on how the ad revenue is being impacted? I just kind of love to get some ideas as to how much it’s trending down at all?

Yes. My comment was the whole industry, the whole television sector globally is impacted and, of course, as well.

We – in Canada, there’s different levels of impact. Of course, fortunately or unfortunately, we don’t have sports.

So that’s a different impact for us relative to the others in our market. But it’s not surprising that has been impacted.

What we would like to answer this question was to say, three weeks ago, the whole world changed. We’ve described today what we’re doing to ensure business continuity.

Our business strategies remain the same. We’ve taken appropriate and necessary and important actions on managing expenses and costs.

We have financial flexibility, given the fact that in the last six quarters we’ve paid down $337 million of bank debt and we’re well healed to deal with whatever it comes. And we’re continuing to work with diligence to ensure that we understand the environment.

But it’s impossible to size the impact at this point in time.

Okay. So maybe just insert another question then.

The merchandising distribution and other revenue was up 50% in Q2. I was wondering if you have any sort of outlook on what Q3 and Q4 would be?

I mean you talked about the fact that a lot of productions have stopped and so people need to fill their grid. And so they’re reaching out to you and possibly buying more programming from you, so that would obviously be a benefit to you.

I was wondering, can you give us any clarity on that?

Sure. Well, David, let me answer that by giving you a little bit of color on what’s in Q2, so you can get a sense of it.

As I said before, the other revenue includes a lot of things, but kind of content revenue is about 90% of it. Now of that, almost half of it was deliveries of shows.

And then you get into things like merch and publishing and Toon Boom. So, depending on what part we’re talking about, given that production has slowed down for now, but we’re getting it back up and running, as Doug just described.

There will be some reduction in that we would expect for the rest of the year. He talked about the merch line.

It’s still a relatively small component of that other, but growing rapidly. So that will see some slowdown deferral.

And on the publishing side, again, that had a strong quarter. But we do know that some of the online booksellers, i.e.

Amazon have stopped shipping books. So, that will slowdown the publishing side.

Having said all that, the activity underlying development will continue and those teams are being equipped to work from home as well. So, the big items, I’d say, are looking like they’re going to slowdown, probably temporarily.

But yes, there are opportunities for sure. We’ve got that big LIBOR rate in Nelvana and growing LIBOR at Corus Studios.

So that is an opportunity. We can’t size that right now, because those deals are all in flight.

Okay. All right.

Thanks a lot, guys.

Thank you, David.

Thanks. Good morning.

Just following up on the advertising discussion, Doug, can you comment on what sort of process you guys are going to go through and the industry, given we’re coming up to upfront season, obviously, that’s cancelled across the Board? But just no one can really set a schedule yet, given the production issues you’ve detailed.

And sports may be back, that’s going to impact ratings. I’m sure there – the sports networks are offering generous make goods.

I mean, how do you think the industry will conduct normal business, if I can call it that, given the traditional processes are obviously derailed here? And that – I suppose that’s going to lead into the discussion of when there’ll be more clarity on all these types of things?

Yes. You can help me with that answer, Tim.

I’d appreciate it, because it’s – obviously, no one can predict the future. Listen, I don’t know, quite frankly, the upfront cycle in Canada is something that all of us, the broadcasters are talking over the last couple of years or two, like why are we doing that?

In the U.S., it’s a bit of a different animal. They have a different buying process.

In Canada, we have – and this is a question, Maher, was asking earlier about what might change? What kind of things might you stop doing?

I – one could have argued prior to the COVID crisis that the upfronts were an expensive exercise that weren’t really necessary. So I don’t really frankly think it’s going to have a material impact in terms of the buying cycle that you put it or the process for placing dollars.

We work with our major agency groups on an annual basis and arrange for the year ahead. And I think we’ll just do the same thing this year.

We’ll find ways to screen our new shows, probably digitally. And so I don’t really see that as a major factor in terms of the go-forward process.

If sports comes back, then everything comes back, right? So that, in that regard, where the world returns to normal, my thinking – emerging thinking here, based on looking at our audience trending on our networks, is that adult swims up more than 100% right now from where it was just three weeks ago.

I’m using the term rediscovering television, I think, we’re going to have a lot of folks that’ll determine that they really like HGTV, maybe I haven’t watched it for a while, but it’s what it used to be when they were fans maybe before the era of streaming platforms or not. But I do think that there will be a benefit – a residual benefit and I hate the benefit from this crisis, don’t get me wrong.

But it will be a residual benefit from the fact that the Canadians are in their home and they’re watching a lot of television and they will build affinity to our channels and our shows. So as – what that means is the thing that I mentioned in my prepared remarks, it is really, really difficult at this point in time to size how we can monetize those new audiences.

And that’s where, I think, what’s really important is, as I went through the discipline of saying, here’s what we know, here’s what we don’t know, here’s what we’re doing, we’re continuing to work with our advertisers who – their – all their sales are down, too, right? So, they want to get back in business and they’re trying to find ways to ensure that their brands have priority.

So, we’ve talked in the past about how the funnel speaks about the reach and frequency of TV nationally and radio nationally is important for brand building. Then in the middle of a funnel, you have kind of product knowledge and features and benefits, and the bottom of the funnel is conversion and digital works at the bottom, trying to move up the funnel.

We’re trying to move down the funnel with our audience segment selling and we’ll continue to do that. People are realizing they just can’t not be on television.

They’ve got to advertise their brands. And so those discussions are happening now.

And I think after the kind of the sort of the immediate effect of the pandemic being declared on March the 11, I would expect in the coming weeks and months, we’ll start seeing some new brand sale campaigns that will be addressing the need to keep branch front and center in front of Canadians.

Thanks, Doug. Thank you.

Yes. Thanks very much.

Good morning. Obviously, complex time So certainly, Doug and John, probably on behalf of most on this call appreciate the transparency and insight really do.

Two quick follow-ups for me. First, Doug, in your opening remarks, you alluded to keeping your eye on the ball on kind of ad tech initiatives and still trying to move that forward.

Just want to get a comment on how kind of practical that is? On the CapEx side, maybe for you, John, is there any kind of leeway there?

Did you expect to kind of make any changes on that front? And then lastly, and these can be all quick.

On the production side of it that kind of Jeff asked that one. Is there a kind of point of no return in terms of delivering product into the fall season?

I know not an easy question to answer at this point, but curious from that standpoint. Thank you.

I’ll take the last and the first and John can take the middle. Is there a point of no return?

Listen, I mean, the nice thing about our model is that, we license in content, but we also sell content globally and we understand where lots of content lives. And so our teams are already being very creative in terms of identifying potential sources of new programming if needed, for the fall season.

So it’d be different. But I don’t think it’s life threatening by any means whatsoever.

So that was that one. I’m now blanking on what your first question was?

Oh, yes, ad tech.

Yes. Ad tech remains a priority and absolute priority.

We – we’re an advocate for Canada-wide solution on common audience segments. We continue to work with the key broadcasters in Canada to get to that space.

We’re having some progress there. Our audience segment selling initiatives were not turning off the tap on that one.

That’s fundamental to transforming how we sell television, which is critical for the future stage. And I would suspect, quite frankly, that we’ll probably see some interesting new targeted campaigns coming out of that, given the realities of the situation at the moment.

But I think advertisers are still sort of redoubling and figuring out where they want to go. So – but our advanced advertising team and our cinch initiatives and all those things we’ve spoken to you in the past remain a priority.

So, Drew, on CapEx, the short answer is, yes, there’s opportunity. We have a relatively low capital intensity of just 2%.

But if I think of what some of the bigger projects are, Doug just actually touched on some of them that we want to keep going on, because they will drive either revenue or cost efficiency. So those remain important.

Now, there’s a practical question about how much we can do and we do rely on certain vendors in some of those cases. So, that’s a – that’s an ongoing, just like everything else, an ongoing kind of watch in terms of how those things can proceed.

There’s going to be some pressure, obviously. We didn’t have a workforce that was completely equipped to work from home.

We got ahead of that very quickly. So we’ve deployed almost 1,000 laptops in the last few weeks, that obviously will come at a slight capital cost, but certainly well worth the investment.

But overall, we’re like all costs, we’re going to take a very close look at what’s in CapEx and figure out what we can absolutely do without in the near-term, as we have to see how long this is going to go.

Okay. Thanks very much.

Thank you, Drew.

Thank you, operator, and thank you, everybody, for the time you’ve taken today to ask questions and inquiries to what Corus is doing to ensure business continuity, the safety of our people, the essential services we provide to Canadians and managing our business. We appreciate all your support.

We implore all of you to take care of yourself to be safe, and we look forward to speaking you in the weeks and months ahead. Thanks very much.

Bye-bye.