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Executives

John Cassaday – President and CEO

Tom Peddie - Senior Vice President and Chief Financial Officer

Paul Robertson – President, Television

John Hayes – President, Radio

Doug Murphy – President, Nelvana Enterprises.

Analysts

Jason Jacobsen – GMP Securities

Carl Bayard – Genuity Capital

Bob Bek – CIBC World Markets

Scott Cuthbertson – TD Newcrest

Ben Mogil – Thomas Weisel Partners

[Aravinda Galapities] – Cormark Securities

Tim Casey – BMO Capital Markets

Drew McReynolds – RBC Capital Markets

Eric Mencke - UBS

Randal Rudniski – Credit Suisse

Corus Entertainment, Inc. (CJR) F1Q08 Earnings Call January 9, 2008 9:00 AM ET

Operator

Good day and welcome to the Corus Entertainment Q1 Analyst and Investor Conference Call. [Operator Instructions] At this time I would like to turn the conference over to Mr. John Cassaday, President and CEO.

John Cassaday

Good morning everyone. Welcome to Corus Entertainments First Quarter Fiscal ’08 and Analyst Conference Call. Thank you for joining us today. I’ll take just a moment to run through the standard cautionary statement before we begin.

This discussion contains forward looking statements within the meaning of the U.S. Private and Securities Litigation Reform Act of 1955. Some of these statements may involve risk and uncertainties. Actual results may be materially different from those contained in such forward looking statements. 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 filing with the U.S. Securities and Exchange Commission.

I’d like now to introduce to you the Corus Entertainment team that will be available on this call this morning. First of all Tom Peddie our Senior Vice President and Chief Financial Officer, Paul Robertson, President of Corus Television, John Hayes, President of Corus Radio and Doug Murphy, President of Nelvana Enterprises.

Before we review our results we would like to advise everyone that we have a series of power point slides that accompany this call and the link to those slides can be found on the Investor Information page of our website atwww.corusent.com.

Q1 was a record quarter for Corus in terms of revenue and profit. The results that we achieved were in line with our plans and expectations and consistent with the direction that we provided you on our last call. If you turn to slide three, consolidated revenues for the first quarter ended November 30, 2007, were $214.8 million up 3% from last year.

Turning to slide four you’ll see that our consolidated segment profit was $83.4 million up 4% from last year and net income for the quarter was $39.4 million or $.94 per share up 7% from last year. Our Television division delivered quarterly results of $126.1 million up 3% and segment profit was up 4% to $62.9 million.

On slide five you will see that while overall specialty advertising growth slowed to 2% in Q1 we expect to return to more typical growth rates in Q2. The story behind the numbers is much more consistent with our previous growth and performance. Our Women’s business continued to achieve double digit growth and the softness in our Kids business was driven by only two soft spots that we expect to return to normal in the future.

We are excited about our continued growth potential in the Kids business and yesterday we announced a partnership that not only extends our broadcast rights for MTV Networks Nickelodeon brands but sees that partnership grow to include all broadband, mobile, video on demand, pay per view, electronic sell through and gaming rights as well as management of Canadian ad sales for their kid websites. This new partnership enables us to extend our offering to Kid advertisers and begin to penetrate local ad markets.

Our Adult business continued to deliver in the high single digits led by double digit growth from W Network. The Women’s demo continues to increase in demand and we will expand our presence in this area when Cosmo TV launches this February. Again, overall we expect Q2 to return to specialty TV growth rates in the high single digits.

If we turn to slide six, overall subscriber revenue growth was 4% let by Movie Central’s 5% growth versus year ago. As you can see from this slide we saw a small drop off of subscriber levels after the end of The Sopranos but we believe we have turned a corner with growth rates returning in October and November. Overall we continue to project a 5-6% growth rate in overall subscriber revenue for this year and you’ll see on the slide a number of the underlying factors that support our positive outlook for subscriber growth for the balance of the year.

In our Radio division strong national sales of 7% led to first quarter revenues of $79.5 million up 5% over year ago. Segment profit was $25.5 million representing an 8% increase. Slide seven shows that our leadership position in the top ten markets remains in tact despite the recent merger activity. Content was off 19% in the quarter but last years numbers included several first window sales to Corus Networks which we no longer record in our results and the dollar contributed too much of the balance of the decline in our overall content revenues.

In summary our solid Q1 results were in line with our expectations and we have continued confidence in our business. As slide seven shows we will continue to focus on returning value to our shareholders and have once again substantially increased our dividend and announced our intention to extend our share buy back program.

We’ll now turn it over to you for any questions that you may have.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes in from Jason Jacobsen from GMP Securities.

Jason Jacobsen – GMP Securities

Two questions, first I was wondering if you could talk about the Radio outlook, how that’s been going into Q2 and if you’ve got any insight into Q3 whatsoever? Secondly, I’m just wondering if you expect any strike impact on Movie Central, particularly as it relates to HBO and Showtime content, just wondering if you have a number of shows in can to fill in the programming later if you can expect some disruption there.

John Cassaday

Basically the Radio outlook remains solid, we are not seeing any indication that the growth won’t continue into the second and third quarter. The one area that we’re kind of curious about is to see what the impact of the possible bankruptcy of TQS will mean to radio markets in Quebec. That has been the one soft spot for us, Quebec market growth and if in fact TQS does not make it and the inventory leaves that market that could speak well to the possibility of good growth for Quebec radio markets in the back half.

In terms of the strike impact on Movie Central, a significant amount of our programming of course is movies and that will not be impacted whatsoever. We have a number of new series that were previously prepared that will be coming on stream in the second and third quarter. Also we think that this in fact represents a bit of an opportunity for us because of our on demand offering it does provide an opportunity for those people that are perhaps somewhat frustrated with the lack of new drama content on the networks to move over to Movie Central and catch up on some of the series like Entourage, Durham County and The Wire, perhaps they haven’t seen until now.

John have you got anything to add on Radio outlook?

John Hayes

No, only to reiterate what John said and that is that pipeline continues to be strong, however, demand continues to be uneven and a little bit late which is the pattern we’ve experienced over the last several years. The call for avails in placement is at most two weeks now on national business for example. We are currently forecasting to have something like a 7% growth rate in Q2 and as John said Quebec is a concern because the French market has been so soft in Q1 but we are seeing some signs of life and progress at our locations in the French side in Q2 and I would also point out that the English stations in Montreal for us were very strong in Q1 and that pacing continues in Q2.

John Cassaday

Paul anything additional on Movie Central and the strike impact?

Paul Robertson

I agree with your comments that the movies will tend to drive the schedule more as we get past the introduction of The Wire and In Treatment which are in January and February. We’ve got a great line up of movies. When you get into the Spring where we are expecting deliveries of Entourage and Big Love they could be affected but by the time you get to that run rate on subscriber billed at the end of the year we think that the program saving will be an opportunity not a problem for us at that time of the year. I think the profile of pay kind of works well with any issues around the strike.

John Cassaday

Paul, for those perhaps that didn’t have access to the slides do you want to just comment briefly on some of the activity you have underway to drive subscriber growth going forward?

Paul Robertson

We set up three months ago that the first quarter we didn’t think would be all that exciting from a growth standpoint because a lot of the activity that we put into market place gets reported back to us with a pretty major lag affect from our customers which is kind of two months. We’ve got a lot of activity that will affect January, February period. I’m looking at free preview that was in the month of November that went to all Western distributors. We have announced the roll out of Movie Central series on demand which is universal on demand availability for all the series programming and now in Calgary, Edmonton and Vancouver.

We continue to drive the high definition side of the business with two HD channels and of course with all the Christmas activity around HDTV purchases we were very much in on that promotionally. That, in addition to the strong programming lineup for the early season in January and February we know we are going to be picking up momentum and will notice that in Q2 and beyond.

John Cassaday

Jason does that satisfy your question?

Jason Jacobsen – GMP Securities

It certainly does, thanks very much.

Operator

Our next question comes in from Carl Bayard from Genuity Capital.

Carl Bayard – Genuity Capital

A couple questions mainly on the TV side. I was wondering if you guys could break down for us how specialty ad group fared for kids versus the adults group. I noticed there was a 7% decrease in your SG&A in the Television group; I was just wondering if that’s sustainable for the balance of the year?

Paul Robertson

I’ll start on the first one. I think we wouldn’t specifically break out the kids versus adults in all our reporting but I can certainly give you a flavor for it. Kids we expected to be soft because of the toy business and because of the way that Theatricals sell more in the second quarter. We were in a decreasing position on Kids in the first quarter and we were into high singles on the Adult business as John reported.

As you get into the second quarter the overall trend on specialty ends up in the high single digit range which is much more normal level and the Kids comes back into growth and Adult will be in the double digits.

Carl Bayard – Genuity Capital

So you are seeing some of that spending coming back to the Kids in Q2?

Paul Robertson

Yes we were pleased that our projection that the Theatrical releases was going to help us more in the second quarter is coming through. It turned out to be a lot better in Theatrical in Q2 compared to Q1. We’re still not away from the overall mega trend that we’ve been talking about in the Kids area relating to concerns about childhood obesity and the profile of the demographic and those sorts of things. We’ve projected in Kids that we can do low single digits to mid. We still maintain that profile despite the softness that we saw on the first quarter.

Carl Bayard – Genuity Capital

A couple questions for Tom. In terms of if you look at the impact of the restructuring costs on an after tax basis if you could just confirm. I’ve got about $.05 a share for the restructuring charge and $.03 for the change in accounting policy for financial instruments?

Tom Peddie

I think the numbers probably closer to $.03 on the restructuring charge and let me just come back I guess to your second question with respect to SG&A on TV. One of the reasons SG&A was down was because we did take the restructuring charge as you recall we reduced headcount by about 50 people in September. You’re seeing the benefit of that and as you recall that was part of our strategy because of our programming costs having increased we wanted to be able to offset that so we believe we’ve done a pretty good job on it and its one of the reasons you’re seeing continued strong TV margins.

I guess with respect to your question on financial instruments, yes it does cost us a couple cents for having done that particular change.

Carl Bayard – Genuity Capital

Could you give us some more details into that change in accounting policy; I know you mentioned it in the MBNA but if you could just spell it out for us in layman’s terms?

Tom Peddie

I think we’ve done a pretty good job of detailing it in the notes to the financial statements and if you do read the accounting policy we think we’ve done a good job. As you can see we had to adopt comprehensive income calculation. That’s really similar to US GAAP reconciliation. The big item there was our interest rate swap on our debt of [inaudible] and items that are considered to be a hedge are reflected in your comprehensive income. Items that are not to be considered to be a hedge go straight through the EBITDA. If we have an item where we’ve been hedging performing share units that’s not a hedge from an accounting point of view it goes directly through the EBITDA.

In the other case we had to adjust for financial instruments so that can be things like programming rights where we do an affective interest rate on those and adjust the costs as a result it increases our interest expense.

Operator

Our next question comes in from Bob Bek from CIBC World Markets.

Bob Bek – CIBC World Markets

Just to fine tune actually, John Hayes I think you mentioned your sort of targeting 7% Radio growth or sort of tracking in Q2. Was that overall, excluding Quebec, I’m just trying to gauge because I know obviously that number would be pretty big if you had Quebec included, am I right to exclude it?

John Hayes

No, that’s including Quebec.

Bob Bek – CIBC World Markets

Interesting. On the TV side John, one of the variables you point to there is the ramp up in the West on Shaw Digital Television product. We saw great deal of growth in 2007, perhaps some of that was masked by the end of The Sopranos, would you believe that was the case, in which case the expectation for strong Shaw Digital growth in ’08 would auger for starting to see in the subscriber amounts?

John Cassaday

There’s a little bit of a lag in the subscriber numbers but I guess the first point you were asking is do we expected Shaw Digital growth to continue and the answer to that is yes. It’s such a robust service with high speed internet, the number of channels that are available, I think there is a massive push on the part of Shaw to continue to expand their digital base and we of course capitalize on that. If you’ll recall the digital base is currently only about 50% so we think there’s lots of up side. Our penetration for pay within those digital subscribers is only 50% so we think we have both the market and the share opportunity going forward and that’s why we continue to be so optimistic about our ability to grow about this business.

The other thing that Paul mentioned that’s underlying our continued optimism is the consumer electronic side of the business where we are seeing high definition televisions become as common as toasters in peoples home and people are going to want to have access to high definition boxes to capitalize on the picture quality that’s available to them now.

Bob Bek – CIBC World Markets

You’ve been aggressive on the buy back and you’ve renewed the [inaudible] but the stock options have largely taken that out in the last year. I know that’s hard to account for going forward where you see some of the stock options going. Do you think at some point you’re going to see a net decline in share count given your buy back activity?

Tom Peddie

Yes, we did have during the first part of the fiscal year last year stock options were kind of offsetting the buyback. In the fourth quarter of this year, the fourth quarter from a calendar point of view as you know we increased our share buy back to acquiring up to the million and a half that we were allowed to acquire. As a result our share numbers did drop. We do expect that to continue in calendar 2008.

Operator

Our next question comes from Scott Cuthbertson from TD Newcrest.

Scott Cuthbertson – TD Newcrest

Just a couple of additional questions. I just wondered if you can give an indication of materiality and timing of any contributions from the deal with DIC and Sparrowhawk.

John Cassaday

None to speak of, I think this is all perspective. We are very enthusiastic about NBC Universal’s participation in the Kids co venture having purchased the Sparrowhawk shares and I think obviously Sparrowhawk was a terrific partner but NBC Universal committed television broadcast with international aspirations gives us even more confidence that we are on the right track and as Doug and his team announced this week additional good news with the roll out into Southeast Asia, continued progress in Central and Eastern Europe. That’s one that I think demonstrates the value in our library because we have been invited to participate in that not only because of our broadcasting or packaging expertise if you will but most importantly because we have content in approximately 50% of the content in that programming is in fact provided by Nelvana.

Scott Cuthbertson – TD Newcrest

Related I mean you’ve announced a number of niches I guess kind of fall into the explorer part of your strategy including some online announcements selling Nick.com and stuff. Where are you in that evolution right now and sort of what can we expect in any sort of terms you can give us. Will online and other sort of similar explorer type initiatives amount to 10% of revenues by ’09 or are there any sort of metrics you can give us to help us understand better what your progress is in that area?

John Cassaday

I’ll let Doug comment on this because he’s kind of our resident expert on this but right now online sales represent approximately 1% of our total revenue. As you know from the discussions that we’ve had historically about our strategy on Corus explorer we’ve taken the view that our business will remain more like it is today then different up to around 2012 when we see the possibility of a tipping point. In the meantime our view is that we need to continue to explore every possible platform and try to determine where the opportunities are so we are hunting in every area whether it’s on demand, subscription video on demand, direct on broadband.

This deal with Nickelodeon is important for a couple of reasons; one it solidifies our relationship with them over a longer period of time and eliminates any uncertainty that might have been associated with that. Most importantly its recognition that we think the Kid web advertising opportunity is going to continue to grow over the next little while and we now have very impressive arsenal of content to go into the marketplace and sell. One of Paul’s groups key initiatives over the next little while is to make sure that we have the core competency in selling Kid web advertising and for the first time entering the local markets that we have mastered on the broadcast side.

Doug why don’t you just give Scott a bit of a flavor for some of the things that we’re seeing globally on the web explorer side of our business.

Doug Murphy

Our strategy with the Explorer piece for Enterprise is to carefully select some of the best third party partners out there that are doing some of the most innovative work around the digital sell through world. More recently we’ve done deals with Amazon, Box, Pioneer, Hewlett Packard. The recent announcement this week was Coolroom a UK based download to own and rental digital video store front. This is all in an effort to unlock that pot of gold at the end of the long tail.

What we’re seeing in the marketplace today is it’s still pretty much nascent and infant in its revenues but there’s more and more good news coming out there. We are very encouraged to see a lot of these digital media centers, whether not its Xbox 360 or PS3 or Hewlett Packard Media Player line of portable computers or the appliances are getting better distribution, Sony Bravia all the Sony TV sets have a broadband connection now.

We think that the stage is being set and so our approach is to carefully exploit the best partner opportunities to put our digital content out there. Put the lines in the water and wait until the inevitable day comes where there’s some meaningful revenue left because of this new consumer shift.

Scott Cuthbertson – TD Newcrest

The other question I had which is I guess a lot more tangible I was wondering what you expect from the BDU hearings and how that might impact your business.

John Cassaday

I think the reality is that everything is on the table. I think there’s going to be a discussion about a number of issues that could impact our business. Clearly the most important one from our point of view is the discussion around [inaudible] Carriage and our point will be that we in the specialty sector are making what we believe is the most significant contribution to the development of Canadian content in this country and that if in fact there is going to be accommodation for over the air broadcasters with a fee that that not come at the expense of specialty broadcasters and limit our ability to have the kind of impact on the development of Canadian content in the future that we’ve had up until this particular point in time.

That’s the key point that we’ll be making at the hearing. We believe that much of the discussion around digital migration has already happened. We have carved out a basic protocol with our distribution partners for the migration of our stations to digital and our primary preoccupation as an industry is to maintain our revenues and our access to subscribers so we continue to effectively sell our advertising. I think the BTU’s are onside with that particular approach which means that I think over the longer term there will be limited upside potential in terms of great expansion for us in our discussions with our BDU partners and the conversations will really revolve around packaging and maintenance of our access to consumers so that we can continue to program affectively sell advertising to advance our business in that particular fashion.

Scott Cuthbertson – TD Newcrest

What’s your black out periods for the normal course issuer bid you’ve been around quarter ends and stuff like that?

Tom Peddie

That’s an interesting question because we have asked ourselves whether we should have a black out period during our normal course issuer bid. I think we’re probably going to revisit that because we think we might be too conservative because we don’t control the purchases of the shares as you know we farm that out to a third party. What happens is we normally black out about two weeks prior to the release of the numbers and then we start to purchase again after the numbers have been released.

Scott Cuthbertson – TD Newcrest

That’s means you potentially could buy stock today or would you wait until tomorrow or what does it mean?

Tom Peddie

Technically speaking we could start to buy tomorrow but what happens is that we have to, the board just approved it and now what we need to do is we have to go to the TSX to ask for permission to actually go ahead and do it. It’ll be a while before we are actually into the market.

Operator

Our next question comes in from Ben Mogil from Thomas Weisel Partners.

Ben Mogil – Thomas Weisel Partners

A couple questions, in terms of the viewer program Shaw is rolling out for Movie Central is it much more user friendly than the past version or is this sort of more similar to the TMN on demand functionality?

John Cassaday

Yes

Ben Mogil – Thomas Weisel Partners

Do you have a sense of how your viewer ship lags that of TMN on demand perspective because of the new user interface?

John Cassaday

No we don’t but what we do believe is that that interface is a real powerful churn reducing vehicle. The most important thing for us is that we have a very strong view and so does Shaw that a satisfied as people are with our pay offering that they would be even more satisfied with the capability of on demand and a series test is a good start.

Ben Mogil – Thomas Weisel Partners

Historically cable companies have talked about 50% of their other new digital subscribers opt for pay TV is that a number you are still seeing hold if you will in your markets?

Paul Robertson

As you see the aggressive deployment of digital boxes and they are at a much lower price range than they used to be. I think clearly the strategy seems to be let’s get the boxes out there, let’s convert people into digital and let’s up sell them on the services once we get that box into the home. That clearly put the onus on Corus from the pay TV side to get in there, mind those new digital box owners upgrade them into pay television. When we see a great run in terms of BDU’s putting these digital boxes in then the opportunity begins for us to go in and up sell into pay. I guess you’d say the penetration that digital as these new boxes go in reduces a bit and then our job is to bring it back up with an up sell.

Ben Mogil – Thomas Weisel Partners

You talked at investor day and during the quarterly release about Theatrical advertising being weak on the Movie side. I know the Canadian Box Office was weak in the fourth quarter but the spend was pretty strong there was definitely a decent number of kids titles like Bee Movie and Enchanted opened in the first quarter or opened very quickly afterwards. Can you talk about are you seeing advertisers simply spend differently on the movie side?

Paul Robertson

No I think I better just speak to the overall trend which is we definitely saw a strong come back in the second quarter. It related to the timing of the number of titles by quarter which can be very lumpy depending on the amount of family and kids titles that are available in each quarter. It does tend to bounce up and down. No, I can’t say that we’ve seen any major changes to the spend by title.

John Cassaday

I think one of the things we have talked about though is some of these films that have been traditionally targeted exclusively at kids are finding family audiences to be perhaps a little bit broader than they have had in the past. I think while Paul is absolutely right that the level of spending is consistent, we are not seeing any change there, that there are some titles where perhaps our share of that total spend has been impacted to some degree as they go after all family viewer ship because even the more comedic titles that humor is sophisticated enough that Mom and Dad are enjoying them as much as kids. The key thing from our point of view is that these films are doing very well and it suggests to us that we are going to continue to see growth in this category moving forward.

Ben Mogil – Thomas Weisel Partners

And fair to say that having Women’s channel cluster as well probably hedges you a little bit by getting some of the advertising flowing into that area?

John Cassaday

We hope so, of course we want to expand that and this Cosmo launch will give us access to younger women with younger families.

Ben Mogil – Thomas Weisel Partners

Switching a little bit about M&A. Are there any TQS assets you think would make sense for you guys in Quebec?

John Cassaday

On the M&A side we do believe there will still be opportunities for us to pick up orphan brands that are out there and build our television roster. As it relates to TQS no we do not see an opportunity for us in that particular case.

Ben Mogil – Thomas Weisel Partners

Last question from me. In terms of modeling the interest expense that we saw in the first quarter of the year and I realize the non cash issue that had some variability. Is that relatively speaking a decent run rate to use for the year?

Tom Peddie

I think so; I think that the number for the year would probably wind up around the $40 million range. I think part of it depends on how aggressive we are with our normal course issue re bid. I think that of about $10.25 million would be appropriate.

Operator

Our next question comes in from [Aravinda Galapities] from Cormark Securities.

[Aravinda Galapities] – Cormark Securities

The remaining question I had was on Quebec radio. I know in the past you talked of the radio margin being around 6% at the end of 2007, are you still seeing that move forward, seeing that grow even despite the sluggishness you are seeing in Quebec or is that sort of slowing down?

John Hayes

We have expectations that that margin is going to grow this year. We think that our growth in Quebec will be substantial relative to last year and we feel we are on track to do what we said we’d do.

[Aravinda Galapities] – Cormark Securities

One last question on the Television side, on the Kids network advertising, could you tell us whether the advertising there actually declined or what it just flat year on year for Q1?

Paul Robertson

They were down.

Operator

Our next question comes from Tim Casey from BMO Capital Markets.

Tim Casey – BMO Capital Markets

Could you expand a little bit on what the revised agreement that you announced yesterday means I guess relative to what you can do now as opposed to where you were prior to this announcement? Secondly, I’m just curious what kind of economic assumptions have you baked into your outlook for the year, have you assumed a steady state as to ’08 over ’07 or are you assuming a slow down in the overall economy?

John Cassaday

First of all I assume you’re talking about the Nick deal. Our previous Nick deal was an arrangement for programming only. This arrangement does two things, it extends the programming agreement for an additional five years from this point and secondly it gives us access to all of the on demand web activity so all of the digital materials that previously were being controlled by Nickelodeon in Canada. We are in fact effect their partner on their Canadian business and what this does for them it puts essentially all of the available content, ours and theirs, under one roof and provides a really compelling one stop shopping opportunity for people that our interested in reaching kid and families.

It was a two pronged effort, one the extension of our programming agreement on an exclusive basis and secondly the opportunity to work together to capitalize on the revenue opportunity that we think will continue to grow over the next number of years on the digital front. Does that address that one?

Tim Casey – BMO Capital Markets

Just one follow up, are you now allowed to put some of those more high profile content like Dora and Sponge Bob, can you put that on your SVOD platforms?

John Cassaday

Yes we can and we can stream that content on our websites. As it relates to the economic assumptions the simple answer is that while we recognize there is considerable uncertainty out there that we are taking the view that the Canadian economy will remain relatively stable and solid. We are not anticipating a recession or an ad recession we are essentially assuming that Canada, on the strength of its natural resources, the general strength of the economy the tax reduction initiatives of the government will continue to perform in a reasonably strong way. We are looking at the 2.5%, 2.7% GDP growth and our expectation is that advertising overall will continue to grow about a point ahead of GDP which has been historical performance level and if we’re wrong on that obviously that’s a fundamental difference in our planning assumption going forward, that’s where we’re at right now.

We are not seeing anything to indicate otherwise, the Radio business to me is the micro cosma of the economy in Canada because it is a local business up and down the street and with the exception of Quebec, which we talked about, these markets are consistently strong which indicates that retailers and restaurateurs and hotels are continuing to be a relatively confident in their business prospects going forward.

Operator

Our next question comes in from Drew McReynolds from RBC Capital Markets.

Drew McReynolds – RBC Capital Markets

My questions have actually all been answered.

Operator

[Operator Instructions] Our next question comes in from Eric Mencke from UBS.

Eric Mencke - UBS

Just one housekeeping item, have you heard any more on the [inaudible] I know you’re not with them any more but has there been any decision that you’ve heard about yet?

John Cassaday

There’s been no further information since we last reported that we are no longer responsible for payment on [inaudible].

Eric Mencke - UBS

Any comments on potential refund for previous pay fees?

John Cassaday

We have no indication of that at this point in time and we are not assuming, obviously it would be wonderful news if it did happen but at this point in time we are just in a vance on that.

Operator

Our next question comes in from Randal Rudniski from Credit Suisse

Randal Rudniski – Credit Suisse

Regarding the trends in the Radio business, can you describe the features that are different between what’s going on in the French language market and the English language market that would explain the difference in the revenue trajectories in the two markets?

John Hayes

I think it boils down to an answer that is just simple and as complicated as two separate markets with high level of competition on the French side in both the Radio and Television area for revenue and lesser number media outlets on the English side. A very limited place where the Anglophone advertiser in Montreal can place advertising. The French side has been very competitive I think the increased number of avails on television and a falling price structure on television has had a trickle down affect to radio and those would be my two best reasons for the differentiation in English and French Montreal.

John Cassaday

I think now that we realize fully how serious the issues are at TQS I think we can only imagine how aggressive they’ve been in pricing to try to optimize their revenue and keep the doors open. I’d be interesting to see whether Astro has a similar view on this but our expectation is that we could see quite a different environment in Quebec going forward if TQS and SRC are able to restore, come back to more normal pricing levels and that I think will have a result in positive impact on radio going forward but that’s purely conjectory at this point.

John Hayes

I think he’s correct and we’re expecting nice progress for our French locations in Montreal going forward because all the pieces are in place. We are in very good shape, we just need the market to be there for us and we’ll be showing good improvement.

Randal Rudniski – Credit Suisse

One other question pertaining to the Television side a little bit more specifically. The question relates to Entourage and Californication, what are the status of those two series at present, are there any shows that have already been produced or is production of those two series in limbo going to the strike?

Paul Robertson

I can’t say that I know the answer to your question on Californication; I know that Entourage is planned for another season that was to be taking place in the Spring and that I guess that would be in question. Probably the same is true for Californication that the next season is a question mark at this point.

Randal Rudniski – Credit Suisse

If the strike lasts to a certain point will it defer the airing of the next seasons of those series?

Paul Robertson

I think that’s our understanding is that if the strike was protracted that new series that would be coming about in the Spring and beyond are likely to be affected on pay. I think I also said earlier on that once you get to that point in the year being able to off load the program expenses of HBO and Showtime it isn’t all bad.

Randal Rudniski – Credit Suisse

Would it be reasonable to assume that margins could actually increase if some of these series drop off for a quarter or two?

Paul Robertson

I don’t know how you do the calculation but the longer you go in the year the less up side you’re going to get from a subscriber standpoint on the run rate so the burden of the programming would be pretty heavy compared to the revenue up side.

Operator

Our next question comes from Jason Jacobson from GMP Securities.

Jason Jacobson – GMP Securities

Actually Randal just asked my follow up.

Operator

That seems to be our last question please continue.

John Cassaday

We’ll remind everyone that our AGM takes place in Calgary today at 2pm Mountain Time 4pm Eastern Time, we will webcast that live on www.corusent.com. That you for your continued interest in our company and we look forward to talking to you inthe next few days and weeks to come.

Operator

This does conclude the conference call for today.

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Source: Corus Entertainment F1Q08 (Qtr End 11/30/07) Earnings Call Transcript
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