CBS TV Stations’ 2Q Revenue Drops 6%

CBS Corp.’s Local Broadcasting (which includes TV and radio stations) revenues for the second quarter of 2014 were $665 million compared with $698 million in the same prior-year period.

The drop, the company said, was primarily a result of softness in the advertising marketplace. An increase in affiliate and subscription fee revenues partially offset the decline.

CBS Television Stations revenues were down 6%, with three percentage points of the decrease attributable to the nonrenewal of a sports programming contract and the absence of the broadcast of the semifinals of the NCAA Tournament on CBS in 2014.

CBS Radio revenues were down 3%.  

Local Broadcasting OIBDA for the second quarter of 2014 decreased 7% to $238 million from $255 million for the same prior-year period. The decline reflected the lower revenues, partially offset by lower programming costs.

The company as a whole posted revenues of $3.19 billion for the second quarter of 2014 compared with $3.37 billion for the same quarter a year ago, which benefited from the timing of television licensing revenues and the NCAA semifinals, which were aired by Turner Broadcasting Systems in 2014 and on the CBS Television Network in 2013.

Operating income before depreciation and amortization (“OIBDA”) of $801 million and operating income of $730 million for the second quarter of 2014 were each down 6% from the same prior-year period as a result of the lower revenues.

“CBS’s strategy of producing premium content across its businesses and all around the world is the cornerstone of our continued success,” said Sumner Redstone, executive chairman, CBS Corp. “Regardless of the media landscape, and regardless of the means of distribution, great content will always be king. [President-CEO] Les [Moonves] and his team are keenly aware of this fact, and I have full confidence in their ability to manage this company through these times of change and opportunity.”

Moonves said: “Our high-margin, fast-growing revenue streams continue to drive EPS, and they stand to become an even bigger factor in our growth going forward thanks to two recent major events.

“First, we completed the separation of CBS Outdoor, which makes us less dependent on advertising and allows us to sharpen our focus on our core content business.

“Second, we received a landmark Supreme Court ruling that removed any distraction from our ability to achieve $2 billion in retransmission consent and station affiliate fees in 2020.

“With so many ways to sell our content before us, we are constantly refilling the pipeline with new hits. Following up on the CBS Television Network’s first place finish in May, we continue to be the most-watched network this summer, with an unprecedented amount of original programming.

“This fall, we’ll have ownership in four out of five of our new series and more than 70% of our total lineup, positioning us well for continued success in content licensing. Of course, the biggest upcoming event on network television is Thursday Night Football, which will further strengthen our schedule and provide an unparalleled platform from which we can launch our new shows.

“Our strategy of producing more original programming is paying off at Showtime as well, where we have premiered nine successful new shows in a row with more to come this fall. The strong confidence we have in our business is why today we have announced we are significantly expanding the value we return to shareholders. We are reloading the amount authorized under our share buyback program to $6 billion and raising our quarterly dividend by 25%.

“These actions once again demonstrate our enduring strength as a content company and our continued commitment to our investors.”