EARNINGS CALL

ViacomCBS: Scatter Improving, Golf Returning

While 2Q advertising is taking a hit, President-CEO Bob Bakish sees the third and fourth quarters improving. Starting June 11, CBS will resume live sports broadcasting as the PGA returns.

As ViacomCBS reported solid results for the first quarter this morning, President-CEO Bob Bakish told Wall Street analysts that the company is seeing a significant impact from COVID-19 in the second quarter. However, he sees the third and fourth quarters improving — “assuming businesses reopen — and we’re well positioned to capitalize on that and gain share.”

Currently, CBS Television is faring better than the cable networks and digital assets. “Local is weakest,” Bakish noted. “Interestingly though, the weakness is dominated by five categories. And they’re the categories you’d expect: auto, restaurants, retail, travel, movies — and they’re all significantly impacted by COVID. Now, as we’ve seen some decline in demand, we also have been using some of that inventory to benefit our own products, including SVOD, digital books, promoting our schedules. So that inventory hasn’t gone to waste. We’ve also, in some cases, reduced loads, to improve the viewing environment and to maintain strong pricing.”

Television revenue was down 13% in the first quarter, but a big chunk of that was due to not having the Super Bowl on CBS this year and the COVID-related cancellation of the NCAA Basketball Tournament. Excluding those, CFO Christina Spade said advertising was up 2%. Meanwhile, retrans and reverse comp gained 18% collectively.

CBS will resume live sports broadcasting as the PGA returns on June 11. “We’re seeing very strong demand for that,” Bakish noted.

“On a positive note, one of our largest clients came to market in Q2 with scatter dollars and we know we got the largest shares — and that’s a good reflection on our portfolio. It’s also worth noting that we’ve seen in May and June scatter improve relative to April. So that’s a good sign. And we do see categories continue to be active in the market: pharmaceuticals, CPG, financial services, tech,” Bakish told the analysts.


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