Comcast Touts 3Q NBC And Peacock Strengths

Broadcasting was a bright spot in a tough quarter for the NBCUniversal part of Comcast, as theme parks and the movie business continued to feel tremendous drag from COVID-19 closures and restrictions. Broadcast television (NBC, Telemundo, TV studio and the O&Os) was the only segment of NBCU to post a year-over-year revenue gain in the third quarter, growing by 8.3% to $2.4 billion. That only partially offset declines of nearly 81% for the theme parks and 25% for filmed entertainment, as total NBCU revenues dropped 18.9% to $6.7 billion.

“I’m pleased to report that some businesses are steadily recovering,” said Comcast Chairman-CEO Brian Roberts as he praised NBCU management for navigation of the pandemic impact. “Given the resumption of both sports and content production, where we continue to see the most pressure from COVID is in our theme parks, which were the single biggest drag in the quarter. In fact, excluding this segment, NBCUniversal EBITDA would have grown by 9% year-over-year,” he said. Cautioning that it will take some time for the parks to return to historical levels, he remains bullish on the business long-term.

Both the TV studio and the movie studio got boosts in the quarter from licensing transactions with the new Comcast-owned Peacock streaming service. That contributed to EBITDA growth for the quarter, with broadcast television EBITDA up 26.7% to $436 million and a rise in filmed entertainment EBITDA of 53.4% to $300 million, even with movie theaters mostly dark. Despite the delay of the Olympics into 2021, Peacock has been running well ahead of its targets, surpassing 22 million users during the third quarter.

“Turning to broadcast television, revenue increased 8.3%, driven by 66% growth in content licensing sales and continued growth in retransmission consent fees, partially offset by a decline in advertising,” Comcast CFO Mike Cavanagh told analysts in the company’s quarterly conference call. He noted that while advertising “improved significantly compared to the second quarter,” broadcast did not benefit as much as the cable networks from the shift of sports, since many sports added from the previous quarter were counterbalanced by new event cancellations.

Despite COVID-19 derailing anything that looked like a traditional upfront, NBCU declared its run through a virtual upfront a success, “with strong volume commitments and higher pricing.” Discussing details with analysts, Jeff Shell, CEO, NBCUniversal, said the ad deals for the NBCU broadcast and cable networks were “slightly up on price, we’d expected to be way down on price, we ended slightly up on price.” He added that they were “slightly down on volume.”

“Obviously, the upfront was a very unusual upfront. We didn’t think a couple of months ago there was even going to be an upfront this year. The fact that there was one and it ended up being relatively normal and stronger than we’d expected was really good news,” Shell said.

He noted that ratings were down for NBCU and everyone else, since production had been delayed. But that’s also created scarcity and the fall season is now getting underway with new content. “Obviously a much smaller upfront than in the past, but much better than we expected,” he concluded.