John M. Cassaday - Chief Executive Officer, President, Non-Independent Director, Member of Executive Committee, Member of Audit Committee, Member of Corporate Governance Committee and Member of Human Resources & Compensation Committee Thomas C.

Peddie - Chief Financial Officer and Executive Vice President Douglas D. Murphy - Executive Vice President and President of Corus Television Chris Pandoff - Executive Vice President and President of Corus Radio

Adam Shine - National Bank Financial, Inc., Research Division Paul Steep - Scotiabank Global Banking and Markets, Research Division Aravinda Galappatthige - Canaccord Genuity, Research Division Vince Valentini - TD Securities Equity Research Tim Casey - BMO Capital Markets Canada Haran Posner - RBC Capital Markets, LLC, Research Division

Thank you, operator. Good afternoon, everyone.

I am John Cassaday, and welcome to Corus Entertainment's Fiscal 2013 Third Quarter Report and Analyst Call. We thank you for joining us today.

Before we read the cautionary statement, we would like to remind everyone that there are a series of PowerPoint slides that accompany this call. The slides can be found on our website at www.corusent.com in the Investor Relations section.

We will now run through the standard cautionary statement. This discussion contains forward-looking statements, which may involve risks and uncertainties.

Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's filings with the Canadian Securities Administrators on SEDAR. Now we would like to introduce you to the Corus Entertainment team joining us on the call today.

Tom Peddie, our Executive Vice President and Chief Financial Officer; Doug Murphy, our Executive Vice President and President of our Television Division; and Chris Pandoff, our Executive Vice President and President of our Radio division. Turning to Slide 3 of the PowerPoint presentation.

Our third quarter results were mixed. We are, however, very pleased with the performance of our core Television Broadcast business and, of course, our net income and EPS growth in the quarter.

Consolidated revenues were $200 million, which was down 2% from prior year, and consolidated segment profit finished the quarter at $68 million, down 10% versus year ago. Our specialty television advertising growth was excellent, and our subscriber revenue growth was solid.

Our mixed results were impacted by a number of contributing factors, including an expected decline in Beyblade sales, the timing of certain production and distribution revenues and soft radio advertising results, particularly in Ontario, which occurred in the last 5 weeks of the quarter. Despite these revenue challenges in 2 areas of our business, Radio and Nelvana, we made gains on a number of important fronts, which we will touch on by turning to Slide 4.

Our net income attributable to shareholders for the quarter was $90 million, up 108% from $43 million last year. This reflects a $55.4 million gain from the disposition of Food Network Canada and a 300 basis point reduction in our borrowing costs as a result of the financing of our senior unsecured guaranteed notes.

In addition, we finished the third quarter with free cash flow of $128 million year-to-date. Importantly, as previously mentioned, our Television business delivered very strong specialty advertising growth, up an impressive 9%.

From a ratings perspective, 2013 has proven to be very strong across all our verticals, with Corus outperforming our competitors in the English specialty television market year-to-date. In the quarter, we also saw a lift in subscriber revenue, up 2%.

These gains in advertising and subscriber revenue are a clear indication that the fundamentals of our core Television Broadcast business are strong and improving. Progress has also been made on a number of significant acquisitions that we announced in March.

On April 30, we completed our transaction with Shaw Media for the purchase of the remaining 49% interest in ABC Spark, as well as the divestiture of our noncontrolling interest in Food Network Canada. On March 18, Corus received a clearance from the Competition Bureau to proceed with the acquisition of 2 Ottawa radio stations, the 50% ownership interest in the TELETOON channels and the 50% ownership interest in the French-language services, Historia and Séries+, from Bell.

These transactions are, of course, subject to CRTC approval. Subsequent to the quarter, on June 27, another important step in this acquisition process was achieved with the CRTC's approval of the Bell-Astral transaction, which clears the way for the consideration of our CRTC applications.

Turning to Slide 5 and the Radio business. Our Radio results were below expectations this quarter.

Revenue softness in Ontario in the month of May led to a 5% decrease in Radio's overall revenues for the quarter. However, we did see pockets of strength.

Our Western markets, particularly the Vancouver and Calgary stations, performed very well. Although segment profit was down 8% in the quarter, it was up and continues to be up 2% year-to-date.

Strong performance in the West and an ongoing focus on cost control have allowed us to deliver a strong segment profit margin of 31% year-to-date. Turning to Slide 6 and our Television business.

We are, again, particularly pleased with the 9% gain made in our specialty advertising revenues as a result of outstanding double-digit growth in the women's vertical, led by W Network and the Oprah Winfrey Network. Continued softness in certain categories of the Kids ad market was offset by the success of ABC Spark and strong demand among advertisers for our co-view audiences.

Our 2% subscriber revenue growth was solid this quarter, driven primarily by the end of ABC Spark's free preview period and our Pay Television business, which finished the quarter with 1,009,000 subscribers, up 33,000 year-to-date. Tough year-over-year comps from Beyblade, as it continues to taper off from an exceptional prior year, as well as the timing of certain international distribution sales, led to a 26% decline in our television merchandising, distribution and other revenue.

This resulted in a decline in Television's overall revenues and segment profit of 1% and 7%, respectively, for the quarter. However, with the strength of our core Television Broadcast business, we delivered strong segment profit margins of 41% year-to-date, consistent with the prior year.

Moving to Slide 7 and our outlook. In the Radio business, our Western markets are continuing to perform well due to solid rating performance and favorable market conditions, again, particularly from our Vancouver and Calgary clusters, which are outpacing TRAM.

Despite severe flooding this June in Calgary, our stations continue to show strength. And although we had to evacuate our premises, the FM stations remained on air, and our News Talk radio station was able to rely on the newsrooms and news feeds from our sister station, 630 CHED in Edmonton.

This ensured that Calgarians and Albertans received extensive, up-to-date information and coverage throughout the crisis, a testament to our staff's commitment to serve our listeners. Calgary is also benefiting from the current popularity of the Country format, which is enjoying a strong music cycle that is attracting new listeners, especially in the sought-after female 18- to 34-year-old audience.

As we've mentioned earlier, our Vancouver cluster is also performing very well, pacing ahead of prior year. In the Ontario market, weaker advertising conditions persist, but June's PPM report showed good results for Corus, with improved ratings in several of our key markets, including Toronto.

As well, our Fresh FM brand is showing signs of traction, with ratings growth in the markets where the format has become established. Our Radio division remains focused on disciplined execution of our operating strategies and our cost-containment initiatives.

Our recent ratings recovery in Toronto, combined with our continued strength in Calgary and Vancouver and our belief in the prospects for our Fresh brand rollout, give us confidence that Radio will be a growth engine in fiscal 2014. Moving to Television.

The Broadcast business continues to pace well from a revenue and ratings perspective. We are seeing strong advertising growth across several of our core brands, including improvement in some key Kid advertising categories.

In fact, our verticals are showing strong pacing and positive momentum overall in Q4, fueled by our women's services, fueled by demand for our co-view audiences and the strength of our newest offering, ABC Spark. In the women's vertical, demand for W Network's coveted audience continues to drive growth for this flagship service, with viewers responding well to the network's popular original series.

As well, rating increases of over 30% on the Oprah Winfrey Network are translating into significant year-over-year ad revenue growth as more viewers turn to Oprah's channel for her distinctive brand of programming. The strategy to monetize the co-view audience on our Kids and Family target services has been highly successful and remains a compelling growth opportunity for Corus Entertainment.

ABC Spark, with its expanded distribution, appealing audience demo and strong summer schedule, will contribute to the division's growth in Q4. We are also very encouraged to see Kids advertising on YTV and TELETOON pacing ahead of last year, a positive indication that the Kids ad market is finally starting to recover.

As a lead-in to the important fall ratings period, YTV is getting an early start by launching one of its strongest schedules to date in the month of August, and TELETOON will benefit from the kickoff of its Camp TELETOON, which of course is their summer-long programming block. As a result, we are forecasting high single-digit specialty advertising growth in the fourth quarter.

Turning to Nelvana in Q4, it continues to face tough year-over-year comps. In April, we had forecasted that our Q3 merchandising distribution and other revenues from our international Kids business would be flat, based on the anticipated timing of certain international distribution sales.

However, these sales are now forecasted to slip into subsequent quarters. In addition, the expected decline in Beyblade continues to impact results.

Moving to subscriber revenues, we are forecasting low single-digit growth in the fourth quarter, driven by Movie Central and ABC Spark. Movie Central and HBO Canada are offering a high-impact summer schedule, with new seasons of HBO's True Blood and The Newsroom, the final season of Showtime's Dexter and the critically acclaimed new Showtime series, Ray Donovan, starting Liev Schreiber and Jon Voight, which has been hailed by critics as "one of the most compelling and complex thrillers to arrive on premium cable in the last decade."

With the roster of high-profile series and exclusive offerings, new targeted acquisition and retention programs and expanded on-demand offerings, we expect growth in our Pay subscribers from prior year. In summary, while we anticipate solid revenue growth from our core Television business to continue into the fourth quarter, given the weaker-than-anticipated Radio results, coupled with the declines in our merchandising and distribution businesses, it is now apparent that we will miss the lower end of our segment profit target.

We are, however, remaining firm on our free cash flow guidance of $140 million. Fiscal 2013 has been a pivotal year for Corus.

With strong fundamentals in our core Broadcast business, an exceptional mix of high-impact brands and the exciting opportunities that lie ahead with our pending accretive acquisitions, we believe we are well positioned for growth in 2014. We hope that you have found these comments helpful, and we'd now be delighted to take any questions that you may have.

So operator, we'll turn the call back over to you.

In terms of -- let's start maybe with the Pay TV subscriber trends. I mean, after strong results in the first half of the year, certainly helped by some of the free preview initiatives, it was a little bit of a slippage on a quarter-over-quarter basis.

Is that just maybe a bit of a lull in the context of transitioning ahead of some of the summer fare? Obviously, you addressed Ray Donovan.

You also had -- what was the other one? Dexter, a new season.

So could you just speak to some of the dynamics specifically in Q3?

I do think that the Pay business is a little lumpy from a quarter-to-quarter basis, but we continue to see good prospects to growing that business, as we've discussed. We think there are exciting opportunities to increase our penetration levels.

We think that there are good opportunities to work collaboratively with our new partners in Pay TV Bell on acquisition and promotion. So we're quite bullish about it.

And of course, with the Showtime and HBO output arrangements that we have in place, we continue to have highly promotable new programming delivered to us. So for those 3 reasons, we're quite optimistic about our ability to continue to grow Pay.

Maybe one for Tom. In terms of corporate cost, I think the guidance was reduced down towards sort of a $26 million sort of context.

I know there's a reference in the MD&A regarding some timing in terms of the quarterly performance this year versus last year, but any update to how that's trending?

Sure, Adam. As you noted, our costs in Q3 were up over last year.

Last year's costs were benefited by some of our cost recoveries on the Corus Quay. So year-over-year comparison is tough.

I think we're guiding right now to probably $27 million to maybe $29 million for the year, but it's totally dependent on stock-based comp.

Okay. Maybe just one last one, John, and I'll leave it to others.

Just in terms of the timing of when we might see CRTC approvals, let alone [ph] the closing of some of those pending transactions. Is this sort of a potential early Q1 '14 dynamic or maybe shifting a bit later into the period?

We are uncertain at this point in time as to when the commission will give us a decision. We have filed all of our applications in March of this year, and we're now waiting, having had them recently approve the Bell-Astral transaction, to them to begin to focus their attention on ours.

And obviously, we are hoping for the earliest possible approval, but we're cognizant of the fact that they have other things on their agenda as well. So we just have to wait and see, Adam.

Maybe on the Kids business, I think might be worth talking a little bit about the ratings uptick there and how you're seeing that progress into Q4 and maybe the back end of the year, how the -- some of the Nick product is maybe performing in Canada relative to, I guess, 1 year ago?

It's Doug, Paul. We continue to be very pleased with the performance of our Kids audiences on the Kids networks.

The Nickelodeon content is clearly a factor in that regard, but I would also add that our Nelvana content, in addition to our Canadian [ph] commissions, are also pulling weight. So we're really quite pleased with where we sit right now.

It can be a soft period from the audience delivery point of view because you're out playing and out to camp and such, but we're actually ready to launch the new Kids fall season early this year. We'll be bringing forward the YTV launch in August, as opposed to prior years where it was September.

That gives us a lot of confidence that we'll have a huge degree of momentum rolling into the high-demand period in the first quarter. So I would conclude by saying that we're happy with where we are in the Kids ratings.

All the horses are pulling along at equal weight, and we're positioning ourselves to have a very good first quarter in Kids.

If I could just add one comment, Paul, to Doug's explanation. One of the good things about the fact that we have positive rating performance on Kids is we don't have to be sort of comping our Kid advertisers with valuable airtime from our co-view sector of our schedule.

So this gives us a better opportunity to manage our yield. So there's really a couple of benefits from having strong Kid ratings.

The first one is just being able to maximize the opportunity for our Kids advertisers, but the second one is having access to more valuable inventory in that co-view block to use exclusively for co-view advertisers.

Great. I guess the other question may be worth asking too.

We've gone over merchandising a little bit, and Q4 will still be a bit of a soft spot, presumably, based on your comments. How should we think about it into sort of this year's Christmas season?

Obviously, Beyblade's in a bit of an off year. The other products, how's the early performance sort of looking on that side, Doug?

So for Beyblade, Paul, clearly, the business is sort of resetting from its exceptional performance last year and -- as evident in our revenues and our earnings. The expectation is the business will sort of find a leveling here, and we expect it to be a reasonably significant contributor to our earnings on the Kids side of our business throughout the next fiscal year.

In terms of trying to make up the gap with the some of our other properties. The preschool business, as we discussed in the past, is a slower build than the boys action business.

Mike the Knight has now been launched in 3 markets. It's on shelf in the U.K.

It's launching, I should say, in North America later this summer for the back-to-school season. It will be on shelf for Christmas of this year.

But I would not expect it to completely replace the downstroke in the Beyblade revenues in the coming year.

That's great. The last one, I guess, for Chris or John.

Maybe talk a little bit about the dynamics in the Toronto radio market and the performance there. We haven't had -- obviously, Indie 88.1 hasn't launched yet.

You've got a little bit of a flux in the market with FLOW and boom both being sort of, I guess, out for sale per the divestitures. How's the market trending as we head to the fall season, Chris?

Well, let me -- 2 points. First, on the TRAM side, in terms of market revenue, it's pretty much flat and should finish this year at about $238 million, which is not quite up its 2008 numbers.

On the ratings side, what you're seeing is really a significant amount of compression on sort of rank positions 3 through 7 and 8. And particularly in 25-54, everybody is kind of bunching into the center there.

And so on any given quarterly release of PPM results, you can see dollars shift as a result of that. And you combine that with what is a third and fourth quarter softer pace in national sales going into the market, you got sort of a double hit there.

What Paul is really getting -- what Chris is getting at is that rank positions 4 through 8, I'd say there's less than 0.5 share points separating those 4 brands. And makes a huge difference on the national buys, in particular, whether you're ranked 4 versus 8, so the dollars start getting split up.

And we had really, really good book recently on the Edge, which moved itself into a position to really be able to benefit going into next year, so we're quite optimistic about that. But it was certainly a challenging year for us in Toronto thus far, but the recent PPM results, on the Edge in particular, were very gratifying.

And Q and Hamilton -- Q has been traditionally strong here. Is it holding up well?

Yes, it is. Actually with boom and FLOW going into a trust, they may not be as formidable a competitor as they've been in the past.

Although I would say that right now with the music trends, for Q107 in particular, the brand is so strong and the personalities are so strong in the station that we've held up really well over the last 24 months.

Let me just start off with Pay TV. I mean, you've seen some nice year-over-year growth there.

Do you expect to sort of continue on with the current promotional campaign, or would you -- do you see yourselves easing up a little bit on the discounts side of things as -- in the upcoming quarters?

Doug will expand on this, but we're continuing to get smarter as to how we plan these promotions. And the headline to respond to your question, Aravinda, is that we plan on doing less price-oriented promoting going forward.

Doug, perhaps you could provide some additional detail.

Thanks, John. That's exactly right on.

We will continue to target new subscribers with a new sort of order of acquisition campaigns. These are much more targeted.

We've been working with our BDU partners to data mine in a much more effective and sort of surgical manner: recent churns, new ads, promotional subs that are coming close to their kind of offer period being up. So I think the effectiveness of our coming campaigns are going to be significant.

And furthermore, one of our strategies in the coming year is to improve overall margin on our paid business by kind of easing off the discounting file and just kind of making sure we understand better the behaviors and the needs of our subscribers, be they promotional or longstanding subs. This most recent quarter, we've had a very effective campaign with our Game of Thrones campaign, which was a discount.

It was a half-off 6-month campaign. And summer, it's really about retention.

And we have a new sale offer, which is a less of a discount if we're going to -- if someone's going to churn out, we have a "4 months at half off" campaign. And then we have a number of new acquisition offers that have been tailored to subscribers within each individual BDU.

So we're hitting it hard. I think growth will continue as it has.

We're delighted with the performance of the sub growth, and we're delighted with the performance of the content. Our ratings have never been stronger from an audience perspective.

So it's a superior product with great content coming out in the summer, and the profile is very promising.

Okay. And then just moving on to the programming costs side.

I mean, it did arise a little bit in Q3, as you had said it would in the back half. I was just wondering what the trajectory is as you kind of head into Q4?

Do you expect inflation to sort of remain elevated and maybe perhaps ease up in the early part of 2014? Any color on the programming cost there?

On the programming side, on the core business moving into F '14, we are working to manage our total programming amort to around 5% above where we ended up this year. Of course, this year's programming expense was influenced to a significant degree by the new output arrangement with Disney for ABC Spark, with the Oprah Winfrey output arrangement.

And they had an inflationary impact on this year's numbers. Next year, we think we can control spend to around 5%.

And of course, you have to take into account that we have obligatory conditions of license related to Canadian spending that drive that number up to a fairly significant degree in their own right. But overall, program spend we expect will be in the plus 5% range for F '14.

And by the way, we will, of course, be hosting an Investor Day in the new year, date to be determined. We'd like to really find out where we are with the regulator on these acquisitions so we can share with you what our thinking and plans are for the acquired assets.

But certainly, early in the new year, we'll give you good color on areas like program expenditures and our plans for Pay TV to the topics that we've been discussing already in this call.

Maybe if I could just build on that, John. The other thing just to be cognizant of is we make strategic decisions to move the timing of our schedules around in order to maintain our competitive strength in the marketplace.

And to John's opening notes, we are delighted with our leadership and audience growth amongst the English-language specialty sector. So things like the ABC Spark summer season launch in June brings a bunch of original programming forward to drive audience, but of course, that hits the books.

Pulling forward the YTV launch in September to August is a great strategy, but of course that would also hit the books. So these are decisions we make to make sure our services are strong and competitively advantaged, and so it's hard to look at a quarter-to-quarter movement in the amort rate.

These move around quite a bit based on how we're deciding to run the business.

Great. And then lastly for me, with respect to the outlook for Nelvana.

As you look ahead a little bit beyond Q4, I mean, do you feel that you're in a position where -- the digital sales, both international and domestic, that you've been talking about in the last several quarters, could start to impact top line momentarily? Or are we a fair bit away before that becomes a meaningful contributor?

Well, we're very much focused on taking advantage of every opportunity we have around the world. And I guess the question of materiality is one that is open for debate.

But I would just rely on -- again, Doug, please feel free to add comments here, but I'd just kind of go back to the commentary that we've made historically, and that is that we would like to see Nelvana positioned, year-over-year, as a business that can generate $15 million in EBITDA and that when we get a hit, whether it's Trucktown in the future or the relaunch of Bakugan sometime in the future or, obviously, what we've been enjoying in very recent times with Beyblade, that, that becomes sort of the option value for Nelvana. But we are hitting the bushes really hard with our content right now and finding receptive audiences around the world in multiple languages.

Yes. I'll just build on that.

That's the right characterization of how we look at the Nelvana business. It's a more volatile revenue and earnings profile.

It is our global market opportunity. So when we hit the ball out of the park, which we've done 4 years kind of in a row now with 2 boys action hits, Bakugan and Beyblade, it sure feels good.

When we have to kind of reset and come off that, as we're doing right now, it stings a little bit. But we have -- we'll be announcing, and we'll give more detail on the Investor Day, but we have 4 new Kids content properties that we are greenlighting to move forward with.

Two of those are preschool. Two of those are boys action.

And what's critically important is to keep the content pipeline filled at Nelvana. And so when you think about the overall business, that's the Nelvana profile kind of steady state, $15 million, sustainable EBITDA.

As we ready ourselves for the next hit, we focus on our film asset investments on sort of consumer product-driven option value opportunities. In the meantime, the Television core business is massive.

It's healthy, it's growing, and that's a different profile than the Nelvana one.

A couple of questions. I believe you have now launched one of those subscription channels on YouTube.

Any evidence you're seeing so far that you can give us in terms of usage or subscription revenue starting to come in?

No. We look at that as an opportunity to experiment.

So nothing meaningful to report at this time, Vince.

Okay. And one little one, maybe for Tom.

There was an Ontario interactive digital media tax credit in the Radio costs this quarter. Was that anything material, or can you quantify it for us?

It was material, $200,000 -- sorry, it wasn't material, $200,000.

Okay. Good.

And to go back to the Kids segment, you talked about your ratings getting better and the excitement you have for the first quarter. Is that just your own ratings and, therefore, market share improving, or are you starting to see sort of that advertising in that category starting to perk up maybe now that Target is getting more stores out there and it's perking up spending and competition in that sector?

Both. Our ratings have been improving, which is terrific because we have to use less inventory to meet the obligations we have to our advertisers.

But we're also starting to see a turnaround in some of the categories, notably entertainment, which has been a real -- we were hit hard on this one as advertising of kid-oriented movies declined. But we've been working hard.

Doug and his team have been working very hard to try to reinforce the value of YTV and TELETOON to the studios as they market their family movies, and we're seeing success there.

And that category is -- it's Doug again. The entertainment category, I would say, is one of the major success stories that we're seeing this year on our Kids networks.

And we are optimistic that there's a bright future of growth back in Kids advertising, led by the entertainment studios.

Okay. Great.

And the last one. I believe DBRS had been looking at your credit ratings quite closely.

I'm just wondering, if something happens with your reduced guidance and with the Astral-Bell deal closing, if there were to be a rating downgrade, can you just talk us through is there anything material that you would see as implications there? Or is your financing already well enough in place, and you don't think a 1-notch rating impact would have much impact on you?

Vince, it's Tom. I guess 2-part answer to the question is that DBRS has indicated to us that they will look at the rating once the acquisitions are completed, not prior to that.

So I don't know if our results, at this particular point in time, will impact that. But all of our financing is in place for the acquisitions and so we'll just access existing lines.

The other message that we've given to the Street was that on a pro forma basis, our leverage would be 2.9 compared to the 1.7 we're at now, but that we are committing to get to leverage below 2.5 in 12 to 18 months. So all of that still applies.

A couple of things. One on the Radio side.

Do you think that there is -- have been any structural changes in the radio advertising market, given that the satellite radio business here in Canada is executing better and you have the ongoing other structural challenges to the business brought on by technology and things like that, or do you think that this weakness is all cyclical? And second one.

Just, John, on the Kids advertising pool -- I mean, it's been a while since you've been encouraged by it. You cited the entertainment as kind of -- of the swing of the major advertisers in that category.

What about the rest of them? Do you see any change?

Like do you think we're getting to an inflection point here, or is that too early to call?

It's too early, but we are -- maybe elated is too strong a word, but maybe it isn't, because I could tell you Doug and I are darn happy to be looking at the prospect of having year-over-year growth in Kids. And that's advertising targeted at kids 6 to 11 in the fourth quarter, because it's been a number of quarters since we've had that.

So yes, we are happy. So we identified the entertainment category as the area that we could really influence, and we have done a good job in doing that and reaching out to each of the studios to make sure that they understand the importance of not neglecting the kid networks as they basically age up their family-oriented programming.

And what we see now in what was kind of formerly kid-oriented movie releases is multiple layers of humor that make them all family-oriented. So it became even more appropriate to advertise on American Idol as it had previously been on SpongeBob.

And what we've been reminding them is that, "Don't forget that the decision as to what movie to go to is, in fact, usually a vote amongst the household. So don't ignore how influential kids can be in making the decision as to whether or not it's going to be the Lone Ranger or Despicable Me."

And that was resonating in a big way. The food piece is a little bit more challenging because of the societal concerns over childhood obesity.

But again, we have gotten breakthroughs with food advertisers who have been off the air with us for a while that have been reformulating and realized that they cannot afford to ignore that sector, but they have to be very socially responsible in their messaging. And what they're doing is responding to that.

And then, of course, the toy space is one that's dependent on 2 things, and that's the robustness of the retail space and of course, as you point out, with the transition from Zellers to Target, we had a bit of a hiatus there. That's going to come back, not so much yet, but we're certainly counting on that for next year.

And then the other thing is just hits. And when they've got something that's really doing well, they'll hit that hard.

So we are -- we're not breaking out the champagne yet on the return of Kids advertising growth, but we're very gratified to see Q4 looking good, and we're looking at that as a starting point to more sustained recovery. On the issue of secular versus cyclical declines in Radio, I think the fact that we are seeing continued pockets of growth across the country in certain regions, specifically Alberta and British Columbia, says to me that this is a cyclical and not a secular decline.

There's no question that the category has been impacted to some degree by the consolidation of the beer category in recent times, but I believe that we continue to represent the only real viable source of local advertising for local retailers, restaurateurs, hoteliers, and that continues to make our business relevant. If you look at the time spent listening to radio, it is in fact very, very stable.

Satellite radio, which you mentioned as a threat, has certainly not been a threat on the ad side. It is a threat as it relates to taking time away from listening to commercial radio while you're in the car, but there's always been that there.

Our goal is to just continue to be as locally relevant as possible. And for those of you in Toronto, you realize the investment that we've made with Oakley in the morning and The Dean Blundell Show and the John Derringer show.

These are all very focused efforts on our part to remain really tapped into the local scene with local content that people don't want to miss as they move into the office setting on their way from their commute. Chris or Doug, you want to add any comments?

Well, I would add just one thing that's hard to -- I understand why you would asked the question, but what's hard for me to resolve is that it hasn't been, over the long term, a decline. It was almost like, at about the third week of May, the business sort of slowed right down.

And usually, when you get a long-term decline, you can see it sort of on a consistent basis. But we've kind of hit what you would describe as an inflection point, but I think that's more related to the economy.

Were the economy stronger, we would have a better sense of whether it's cyclical or secular. But I think there's just too many factors, as John had pointed out, that go into this.

I will add, on the Kids advertising, the other key focus that we've employed has been category diversification beyond the big 3 of food, toy and entertainment companies. So the sales team has been actively prospecting new categories: government and hospitality, tourism, areas where kids have influence on family decision making -- auto, even, for that matter -- and have had some nice success there.

So we're not going to give up on the big 3. That's still going to be the engine that drives the Kids network advertising model.

But the extent to which we see recovery on those big 3 and then we can layer in new buys from new clients, that makes us very optimistic.

Maybe a follow-up for John. You gave us some very good outlook for Q4.

I was wondering, maybe it's a little bit too early, but if you can -- or comment on bookings at all for Q1, which was obviously seasonally stronger. And then as a follow-up question, I remember last year at this time, you made a comment that at the -- during the upfront season, you decided to postpone or to sell less of your inventory in savior -- in favor of scatter pricing.

And I was wondering if you could comment on sort of your approach to that this year?

Well, I'll deal with the last one first. Clearly, we had anticipated a stronger back half than what has materialized.

And that has impacted our results, no question about that. We weren't alone, but we did significantly overestimate the strengthening of the Canadian economy in the back half of this year.

Hope springs eternal going forward. But having said that, it didn't materialize for us this year.

I think the profile for next year will be very much the same as this past year in terms of upfront commitments. I think that agencies are looking for the flexibility to get in and out of the market, just like we're looking for the flexibility to price our product based on improved ratings and better economic conditions.

So I would say the profile for our upfront business will be more alike than different for fiscal '14 than it was for fiscal '13.

That's great. And then just wondering, on the Q1 bookings, if you have any color at all?

Yes. I really don't have -- Radio is just so darn late.

It's too early to say where we'll be. Generally speaking, our Television ratings are pacing ahead.

But I don't want to make a commitment on that at this particular point in time. But we're generally seeing a nice -- and as witnessed by 2 successive positive quarters of TV growth on the specialty side, there's definitely more resilience on the national-oriented businesses than there are on the local ones, which are more dependent on economic recovery.

That's very helpful. And then maybe just one other question for you, John.

With respect to the CRTC's public consultation on television, which is coming this fall, I was wondering if you have a good sense for the scope of that proceeding and then any expectations that you have out of that?

I think the commission has indicated to us that they are open-minded about what the scope of the hearing will be. It would be our hope that we can provide some leadership by working with our colleagues in the industry in framing the issues that need to be identified and dealt with and hopefully go in with a unified vision as to what we need to succeed.

It's in the interest of the commission to ensure a successful Canadian broadcasting system because that's what triggers the investments in Canadian content. And as a result, I think it's really incumbent on us -- and by us I mean Shaw, Corus, Rogers, Bell -- to go and lead the commission through this, make sure they're aware of the flexibility that we think we need to compete against over-the-top providers and other nonregulated entrants in our industry.

And I'm hoping that they will be receptive. What I very much hope is that we don't go in with an absence of a clear, compelling and united view, because that will only encourage more regulation, and we need more flexibility right now to ensure that we can be successful into the future.

Thank you, operator, and thank you all for your continued interest in our company. I think this was, Tom, our 54th Analyst Call.

So for many of you, you have been with us from the beginning, so we thank you for your continued support, and we look forward to talking to you in the next few days and weeks to come. Bye for now.