Bell Media announced a tentative $410-million deal Monday to buy the Canadian operations of outdoor advertising company Outfront Media Inc. in a move that experts say could solidify its hold on the out-of-home advertising market.
The acquisition, which is expected to close in 2024 subject to regulatory approval and other conditions, would see the BCE Inc. subsidiary take over Outfront Media’s 9,325 advertising displays in Canada.
Bell Media, which owns television and radio stations as well as digital and out-of-home media assets, bought Astral Media in 2013 for $3.2 billion, gaining one of Canada’s largest out-of-home advertising brands.
For Bell, the Outfront deal would add to its 45,000 advertising displays that are part of the Astral brand.
Dwayne Winseck, a professor at Carleton University’s School of Journalism and Communication, said the move would increase Bell’s share of the $622-million out-of-home advertising market in Canada from around 20 to 35 per cent.
“It would be the dominant player in this small part of the advertising market,” he said. “It would further buttress its cross-media advertising opportunities with more addressable ad targeting capabilities.”
But Winseck said there may be a larger motive by Bell “lurking in this deal” as the telecommunications company seeks to expand its footprint of 5G infrastructure.
He said 5G networks require thousands of small antennae to be placed in relatively close proximity to one another throughout service areas, which means companies need to be able to access key site locations such as street furniture and buildings.
“Companies deploying 5G have to get permissions to access and locate their antennae on those things,” said Winseck.
“Is BCE really buying just an out-of-home ad business … or is it buying that and site locations that are essential to 5G in cities across Canada where Astral Media and Outfront Media have 50,000-plus sites? I think it’s the latter.”
He said if that’s the case, then regulatory approval of the transaction should be conditional upon a transparent and open wholesale access regime “so that control over street furniture does not become one more arrow in BCE’s quiver used to hobble mobile wireless competition.”
Stewart Johnston, senior vice-president of sales and sports at Bell Media, said out-of-home advertising continues to grow in importance as a mass reach vehicle, as digital formats allow for greater targeting capabilities.
“Outfront’s diverse array of Canadian assets reinforces Astral’s dedication to delivering impactful, multi-channel marketing solutions, while accelerating Bell Media’s digital strategy,” he said in a statement.
“The synergy between Outfront’s established expertise and our commitment to driving innovation will provide clients with tremendous opportunities on a true coast-to-coast footprint.”
Outfront Media chair and chief executive Jeremy Male said the sale would provide the company with additional financial flexibility as it focuses on its U.S. assets.
National Bank of Canada Financial Markets analyst Adam Shine said outdoor signage is a growing segment in media “that is relatively less exposed to secular pressures.”
“The Outfront platform involves a higher mix of traditional outdoor signage compared to Astral, which consists of a lot of metro and airport signage as well as so-called street furniture (columns, bus stops),” Shine said in a note to investors on Monday.
Shine noted Outfront’s portfolio is more geographically diverse than that of Astral, which could satisfy any competition concerns surrounding the deal.
“While the Astral business skews 75 per cent to Quebec and 25 per cent to Ontario, the Outfront business in Canada is about 50 per cent out west, 40 per cent or more in Ontario, and the rest in Quebec,” he said.
“As such, this appears to be a geographic complement for Bell Media which need not necessarily trigger serious regulatory concerns, but we’ll see what the Competition Bureau says.”
This report by The Canadian Press was first published Oct. 23, 2023.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
