Wildbrain loses appeal at CRTC, will wind up 3 channels

Executive Summary

• Wildbrain Ltd. is ceasing operations of its Canadian television broadcast channels (Family Channel, Family Jr., WildbrainTV, and Telemagino) and surrendering their licenses to the CRTC, as the channels are no longer commercially viable following removal from Rogers and Bell distribution services.
• The previously announced transaction to sell a majority stake in these channels to IoM Media Ventures has been cancelled due to the failure to secure a new carriage agreement with Rogers.
• Following the cessation of broadcasting, Wildbrain intends to simplify its corporate structure by removing variable voting restrictions for non-Canadian shareholders, aiming to provide greater strategic flexibility.

Key Details

• Channel Discontinuation: Wildbrain will cease broadcast operations for Family Channel, Family Jr., WildbrainTV, and Telemagino after their removal from Rogers' distribution service, expected in the coming months.
• License Surrender: The company intends to surrender the channel licenses to the Canadian Radio-television and Telecommunications Commission (CRTC).
• Cancelled Transaction: The deal to sell a majority stake in the channels to IoM Media Ventures will no longer proceed.
• Regulatory Context: The decision follows a CRTC ruling that Wildbrain was not subject to undue disadvantage from Rogers Communications Canada Inc., leading to the breakdown of carriage negotiations.
• Corporate Structure Change: Wildbrain will remove its variable voting structure applicable to non-Canadian shareholders, simplifying to a single class of shares to align with the removal of Canadian control restrictions under the Broadcasting Act.
• Business Impact: CEO Josh Scherba states the impact on the broader business is minimal and does not affect the go-forward strategy, which focuses on global IP monetization.
• Financial Performance: The company reported 17% year-to-date growth through the third fiscal quarter.
• Strategic Focus: Wildbrain remains focused on monetizing IP (including Peanuts, Strawberry Shortcake, and Teletubbies) across streaming, YouTube, consumer products, and immersive experiences, marking a strategic exit from the declining Canadian broadcast space.

Notable Quotes

• "For nearly four decades, Family channel has been a trusted destination for Canadian kids and families. We're incredibly proud of the legacy we've built -- thanks to our loyal viewers, dedicated television employees and the many talented Canadian producers we've partnered with." — Josh Scherba, President and CEO
• "While it is unfortunate that the channels will be discontinued, the impact on our broader business is minimal and does not affect our go-forward strategy. Wildbrain remains a global leader in kids' and family entertainment... We have deliberately positioned our business to align with changing consumer habits, including a strategic exit from the declining broadcast space in Canada." — Josh Scherba, President and CEO
• "We delivered 17-per-cent growth year-to-date through the third fiscal quarter, underscoring the strength of our diversified platform beyond the television business despite ongoing industry headwinds." — Josh Scherba, President and CEO