The ratings on Toronto-based Corus Entertainment Inc. reflect what Standard&Poor's Ratings Services views as the company's "fair" business risk profile and "significant" financial risk profile. The business risk profile reflects the company's good market position in specialty television and radio, as well as the favorable Canadian broadcasting regulatory regime, which limits competition. However, participation in the media industry is challenging because of its cyclical nature (particularly for advertising and content) and competitive pressures from alternative content and distribution channels. Corus' financial risk profile is supported by its strong EBITDA margin and liquidity, as well as adequate credit protection measures, partially offset by the company's sizable annual dividend, which reduces free cash flow. Corus' business comprises two operating divisions:
