earnings calls

Fox Corp. CEO Lachlan Murdoch is certain that that the company’s new sports venture with Disney and Warner Bros. Discovery will be “additive” and will not threaten Fox’s still-lucrative pay-TV business. The venture was announced Tuesday and has set media tongues wagging. The topic dominated Fox’s 30-minute quarterly earnings call, which was where Murdoch made his comments, enabling execs to largely elude tougher questions about a 20% year-over-year decline in advertising revenue in the quarter.

For the fourth quarter, Comcast consolidated revenue increased 2.3%, to $31.3 billion. Adjusted EBITDA was flat, at $8 billion. Earnings per share increased 2.4%, to $0.84.

Key drivers include its Assembly Studios in Atlanta, digital revenue, sports rights and political advertising it estimates could hit $80 million.

CEO Robert Iger: Fiscal “Q4 adjusted earnings per share nearly tripled over the prior year, and all three of our businesses — entertainment, experiences and sports — saw significant increases in fourth quarter operating income compared to Q4 of fiscal ’22.

The broadcaster plans to take the majority of its national sales in house next year. CEO Perry Sook: “We believe that there’s no one better to sell our linear and digital ads to advertisers than us.”

Its execs tells analysts to expect more sports deals and more new CTV networks. CEO Adam Symson says his company is “leading the broadcast renaissance in live sports” with deals impacting results with both advertisers and MVPD distributors. Pictured: WNBA Commissioner Cathy Engelbert and Scripps CEO Adam Symson.

CEO Lachlan Murdoch: “Tubi will be the way our audiences primarily engage with entertainment in the future. It’s a core part of our business.” Another positive: Affiliate fee revenues increased 2% in the last quarter, driven by 8% growth at the company’s television segment, which includes its TV stations.

During its earnings call with analysts Wednesday, top executives at the company said they are anticipating a gangbuster year for political advertising in 2024. And nearly all the company’s agreements with MVPDs for retransmission consent revenue are up for renewal over the next year. Sinclair expects low single-digit growth in that area.

“With Peacock, now we have the most live sports of any of the streaming services,” CEO Brian Roberts said on today’s earnings call. “I believe that’s a surprise to many people when they learn that. He said the streamer’s growth, and the sports component that’s helping to drive it, sets Comcast up for being “more relevant” during a transition: “how we go from analog to digital in a way that helps the leagues.”

Perry Sook: “If you think about it over time, The CW is increasingly looking like Fox, with the same number of hours of weekday programming and its growing live sports portfolio. And with Mike Biard now onboard” as president-COO,” we have the team to get us where we want to go.”

CEO Lachlan Murdoch: “In this year’s upfront we believe Fox led the market in both price and volume across our live sports and news offerings,” he said. And he said he’s optimistic about the current quarter. “While it is early in the quarter, underlying ad trends have shown signs of improvement over last quarter. We are seeing an uptick in scatter, driven largely by sports, and national news is solid,”

President-CEO Bob Bakish: “As we get to Q4, sports are going to be the key driver, frankly the NFL, The Big 10 — that timing has turned out to be great for us — as well as our modified CBS slate, which is strong and has plenty of scripted programming.”

CEO Hilton Howell (pictured): “We’re especially pleased at the performance of our television stations during the quarter. Our core advertising revenue increased 4% on a year-over-year basis, with both local and national core up in low single digits on a year-over-year basis.”

Adam Symson: “I think, ultimately, the strike is going to lead to higher costs for streamers. As the streamers end up with higher expense structures, even more than they have today, they will continue to look for new ways to offset that expense, or to monetize their own costs. And I think that will open up additional programming opportunities for linear broadcasters like us.”

CEO Dave Lougee: “Automotive … has steadily recovered and is generating strong year-over-year growth — and it did so in the second quarter for the fourth consecutive quarter, and is doing it again and is strong in Q3 as well.” Tegna SVP of Financial Planning Julie Heskett has been tapped to succeed the retiring Victoria Harker as CFO.

In third quarter guidance, Sinclair is expecting total media revenue to be down 10% to 12% to a range of $733 million to $752 million, compared to a pro forma $832 million for the third quarter of 2022. “The primary reason for the decline is due to the absence of political advertising revenues in a non-political year,” EVP-CFO Lucy Rutishauser told Wall Street analysts.

CFO Jason Armstrong noted that the dual revenue streams at Peacock, subscription and advertising, are offsetting weakness at the linear networks. He said domestic advertising was down 5% overall for the NBCU media businesses, while advertising revenues for Peacock were up 75%.

Total revenues grew 11% to $1.2 billion. CEO Wade Davis said the writers and actors strikes shouldn’t have much impact on the Spanish-language company since “nearly 100% of our production is outside the U.S.”

CEO Bob Iger: “We see that there’s going to be a substantial growth in digital advertising in this upfront — I mean quite substantial.” Regarding the linear networks, he said: “We’re seeing both sub declines and advertising weakness — and that’s forcing us to look at the cost structure of those channels, which also really comes down more than anything to spending on programming.”

CEO Perry Sook: “On the advertising front, our CW affiliates are already benefitting from increased advertising revenue and we expect national advertising revenue at the network to grow over time.”

Sports saved the company’s fiscal 3Q. “Our advertising revenues increased 43%, led by the Super Bowl,” said CFO Steve Tomsic. “Television advertising revenue led this growth with a 61% increase, fueled by Super Bowl 57, which generated over $650 million in gross revenue. We also benefitted from two additional NFL Playoff games — one divisional and one wildcard — partially offset by the timing of one less regular season game.”

CEO Hilton Howell: “For the first time ever in the year before a presidential election we are receiving significant presidential ad buys from all major candidates and parties. This is a great sign for this year and for next year.”

After media companies have lost billions of dollars making the pivot from linear TV to streaming, CEO David Zaslav declared that Warner Bros. Discovery’s business is no longer hemorrhaging red ink. “Here in the U.S., our streaming business is no longer a bleeder,” Zaslav said on the company’s first-quarter earnings call Friday. “It’s hard to run a business when you have a big bleeder.”

CFO Jason Combs: “Looking ahead to the second quarter of 2023, we expect Local Media revenue to be flat to up in the low single digits percent range.”

The reduction from 24 cents per share to 5 cents was explained as a “prudent” move designed “to optimize the balance sheet for flexibility” CFO Naveen Chopra said, and will “translate to significant cash savings of nearly $500 million annually.”

CFO Lucy Rutishauser: “We expect media revenues to decline compared to second quarter of 2022 due to the absence of political spending and continued year-over-year mid-single-digits subscriber churn. Second quarter core advertising is expected to be down by a low-single-digit percent versus the second quarter of last year, with the decline in core primarily driven by macro-economic weakness.”

With Comcast President Mike Cavanagh now directly overseeing NBCU, Bank of America analyst Jessica Reif Ehrlich asked during a Q&A whether his dual role should be viewed as a permanent solution. “The short answer to the question is me stepping in to oversee NBC is quite sustainable,” he said.

CEO Wade Davis noted that the company’s 1Q ad business in the U.S. grew 6%, while local declined by 5%. There has also been some volume decline in the scatter market from last year’s “historic” level, but Wade said his company is still seeing premiums of 30% in scatter.

CEO Perry Sook: “Today, broadcast television remains the only place where content creators, sports organizations, team owners and, most importantly, advertisers, can access local audiences at scale. We provide reach that no other media can, especially for sports content.”

“No other company has a right to negotiate on behalf of my company without our consent,” said Gray Chairman-CEO Hilton Howell. “I have no intention of negotiating in public, or criticizing anyone anywhere.”

CEO Adam Symson: “Our ubiquitous over-the-air, pay TV and connected TV reach through Ion and the Scripps Networks has immense appeal for leagues looking for both new and consistent franchise viewing events across a national footprint. For us, we see the right live sports as an unparalleled opportunity to drive the value of our linear television streams even higher.”

A year after its merger, the company says the difference between what advertisers pay in the U.S. and in Mexico has mostly been eliminated.

EVP-CFO Lucy Rutishauser: “First quarter’s core advertising is expected to be dragged down a single-digit percent versus first quarter of last year.” And Broadcasting President Robert Weisbord said: “Local was strong in January and February. The weakness we’re seeing is really on the national side. We continue to think that we’ll see that.”

The CEO said: “2023 will be another year of content momentum. Our ’23 film stream is strong. And CBS’s momentum is only getting stronger. The network is on the verge of achieving No. 1 status for the 15th straight broadcast year. And we see great stability in its schedule, with very few slots to fill.”

The restructuring creates a new division called Disney Entertainment headed by TV content chief Dana Walden and movie studio boss Alan Bergman. The ESPN businesses will be a separate unit, run by current chief James Pitaro. And the Parks, Experiences and Products division will continue to be run by Josh D’Amaro. Those execs will be tasked with finding cost-cuts eventually totaling $5.5 billion annually. And that includes cutting some 7,000 jobs.

The company reported total quarterly revenues of $4.61 billion, a 4% increase from the $4.44 billion reported in the prior year quarter. Affiliate fee revenues increased 1% led by 6% growth at the television segment. Advertising revenues increased 4%, primarily reflecting the impact of the FIFA Men’s World Cup and strong NFL results at Fox Sports, higher political advertising revenues at the Fox Television Stations and continued growth at Tubi.

He tells analysts, “The ad market feels to me like it has stabilized a bit. We’re assuming it’s going to stay weak for the first half of this year and then recover, but who really knows, based on the macro economy.”

Third quarter media revenues were down 10% to $684 million. Distribution revenues dropped 11% to $565 million and advertising revenues declined 5% to $112 million. However, Sinclair COO Robert Weisbord had some good news: “On a per-game basis, ad revenues were up by a mid-teens percent, driven by healthy demand in many categories — with the largest gains in service, retail, food and entertainment,” he reported. “Looking forward, we see some positive signs for advertising demand.”

CEO Bob Chapek: “Disney+ has secured more than 100 advertisers for our domestic launch window, spanning a wide range of categories.” Broadcasting grew modestly in the fourth quarter compared to the prior-year quarter as growth at the owned television stations from higher advertising and affiliate revenue was partially offset by lower results at ABC.