NBC is off to a strong start in the new television season and Comcast CEO Brian Roberts is talking about the start of a turnaround for the network. Business is also good for the O&O group. NBCUniversal CEO Steve Burke tells analysts there’s plenty of upside for the NBCU businesses.
The NBC O&O station group posted growth in 3Q and the NBC Television Network is off to its strongest Fall start in many seasons. That has top executives of Comcast telling Wall Street analysts that broadcast television is the biggest growth opportunity for the company.
Comcast didn’t break out figures for the station group as it reported 3Q results, but vice chairman-CFO Michael Angelakis did tell analysts on the quarterly conference call that improvement at the O&O stations contributed to the 84% revenue increase for the Broadcast Television segment.
Some additional insight into the station business came when an analyst asked about the strength of political advertising on the O&O stations.
“On the political side we had a strong quarter in Q3 and I think that continues into Q4. But the core business was also very healthy. Without political and the extra broadcast week we were still up 6%,” said NBCUniversal president-CEO Steve Burke.
“Auto seems strong and I think the team is executing very well there. Political remains strong going into Q4,” Burke added.
“Unfortunately we don’t own a television station in Ohio,” quipped Angelakis. “Most of our owned station markets did not have a lot of political because they were not battleground states,” he said, apparently referring to the heavy spending by the Obama and Romney campaigns and Super PACs in presidential swing states.
TVNewsCheck notes, however, that WTVJ Miami is in a presidential battleground state, Florida, while WRC Washington, DC, is in the market that tops all others for political ad spending, largely because of the presidential campaign battle for its Northern Virginia viewers.
On the network side, NBC’s 2012 successes didn’t end with the closing ceremonies of the London Olympics. The Peacock Network is having ratings success with its Fall schedule.
“NBC is up 17% after four weeks and up 31% in entertainment,” Comcast chairman-CEO Brian Roberts proudly told analysts. “This is NBC’s seventh consecutive weekly win in Adults 18-49, as well as the first time NBC has led each of the first four weeks of the new television season since 2002.”
“It’s certainly early, but I believe and hope we are seeing the beginning of a turnaround at NBC,” said Roberts.
Despite the success, Burke told the analysts that NBCUniversal still has “a lot of businesses that are underperforming by my standards” as he looks to the future.
“Broadcast, I think, is our biggest opportunity. And the fact that NBC has been number one for the first four weeks of the season in demo is a very positive start for the season for us and we want to continue that. But I think broadcast profitability could be dramatically higher than it is currently. Hopefully we’re going in the right direction on that,” he said.
“And I think monetization across the company, in terms of affiliate fees, advertising CPMs – we have a lot of upside. We’ve [Comcast] only been together with NBCUniversal now for 18-20 months. We feel like we’re on the right path, but there’s a long, long way to go,” Burke concluded.
As for profitability, NBCU reported that revenues rose 15.7% for the first nine months of 2012 to $17.8 billion, but operating cash flow (OCF) gained only 8% to $2.9 billion. Broadcast Television (network and stations combined) revenues were up 35.3% to $6.2 billion and OCF rose 35.2% to $274 million. However, excluding the Olympics, OCF declined 24% to $154 million for the first three quarters of 2012.