Quebecor says it will take 5 years for NHL deal to pay

Quebecor says its deal with Rogers Communications to broadcast NHL hockey games has been an early success even though the venture will take up to five years before it is profitable.

Since adding the games to its schedule this season, including the Montreal Canadiens matches on Saturday night, TVA Sports has increased its subscriber base to two million, up 25 per cent in a year.

"As a result, TVA Sports has quickly become a destination of choice for advertisers seeking to reach out to the French speaking sports fans," Quebecor CEO Pierre Dion said Wednesday during a conference call after reporting 2014 results.

The Montreal-based company signed an $800 million deal in 2013 with Rogers to broadcast NHL games over 12 years starting with the current season.

Canadiens come through

The Canadiens sit atop the NHL's eastern conference and are tied with Nashville and Anaheim for the overall league lead, on track for a spot in the playoffs.

Dion said more subscribers will be drawn to the network as playoffs get underway in April. As the exclusive French-language playoff broadcaster, Quebecor sees TVA Sports attracting additional viewers to the 80 to 90 playoff games and 2016 World Cup soccer.

Until that subscriber base fills up however, the $65 million a year in programming costs will weigh on the earnings of Quebecor's media business.

Quebecor  says its continuing media and telecom operations had $50.3 million of adjusted income in the fourth quarter, up 3.5 per cent from a year earlier.

Profit below expectations

The profit amounted to 41 cents per basic share, up from 39 cents in the fourth quarter of 2013.

Overall revenue for the Montreal-based media and telecom company was up 2.9 per cent to $989.4 million.

Quebecor said the quarter's growth was underpinned by the Videotron telecom segment, which had its strongest quarter in terms of subscriber additions since 2011.

However, Quebecor's overall profit and revenue were below analyst estimates of 52 cents per share of earnings and $1.09 billion of revenue.

The company is in the process of selling its English-language daily newspapers and other businesses, mostly outside Quebec. It has also sold 74 Quebec weeklies and abandoned door-to-door distribution of community newspapers and flyers in Quebec.

The operational gains at Quebecor's continuing operations were more than offset by the reduced value of its goodwill, intangible assets and financial derivatives, which dragged the company to a net loss of $59.5 million or 48 cents per share.

Quebecor's discontinued operations had $19.4 million of net income, up from $14.3 million. Including discontinued operations, Quebecor's total net loss in the fourth quarter was $50.3 million, compared with $19.4 million of net income in 2013.