CBS Corp. on Thursday reported results for the fourth quarter of 2015 and the full year that included an 11% drop in revenue from CBS Television Stations from the fourth quarter a year ago.
The company said the decline was the result of lower political money in the quarter compared to advertising for midterm 2014 elections. Growth in affiliate fees partially offset the decline.
The company’s Local Broadcasting segment revenue of $719 million for the quarter decreased 8.5% from $785 million in the same prior-year period. For the full year, Local Broadcasting revenue was $2.6 billion, down 5.5% from $2.75 billion in 2014. (The Local Broadcasting numbers include the CBS Television Stations and CBS Radio.)
The only breakout of TV station revenue was the 11% decrease, which the company attributed to lack of strong political spending that it reported in the prior-year quarter. Growth in affiliate and subscription fees partially offset the decline.
“We had a terrific fourth quarter, and CBS is now in position to build strong momentum throughout 2016,” said Leslie Moonves, chairman, president and CEO, CBS Corp. “Our base businesses are growing well, thanks to the strength of our premium content and the continued improvement in the advertising marketplace. In addition, with Super Bowl 50 here in the first quarter and political spending ramping up into the fourth, we expect 2016 will be a very good year for advertising.
“At the same time, our other high-margin revenue streams continue to thrive. Retransmission consent and reverse compensation are set to hit $1 billion in 2016 — a year earlier than expected — and are on pace to surpass $2 billion in 2020.
“The international market is extremely exciting as well, with demand for our CBS programming higher than ever and new deals that are changing the way we license the Showtime brand overseas. Plus, our new streaming services — CBS All Access, CBSN, and Showtime over the top — are attracting a whole new set of younger viewers on better economic terms. So no matter how quickly the digital world changes — and no matter how viewers want their content — CBS is positioned to succeed.”
Entertainment segment revenues (which include CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive, and CBS Films) of $2.46 billion for the fourth quarter of 2015 grew 9% from $2.26 billion for the same prior-year period. The increase was driven by 8% growth in network advertising revenues, resulting from a strong scatter market. In addition, affiliate and subscription fees were up 45%, and content licensing and distribution revenues grew 7% as a result of increased international television licensing revenues.
Entertainment operating income for the fourth quarter of 2015 was $347 million, up from $253 million for the same prior-year period, primarily reflecting the increased revenues.
For the full year, Entertainment segment revenues rose 2% from $8.3 billion to $8.4 billion.
Cable Networks (Showtime Networks, CBS Sports Network, and Smithsonian Networks) revenues of $562 million for the fourth quarter of 2015 rose 13% from $499 million for the same quarter in 2014, driven by higher revenues from the international licensing of Showtime original series.
Cable Networks operating income was $228 million for the fourth quarter of 2015 compared to $241 million for the same prior-year period, as the fourth quarter of 2014 benefited from the licensing of higher-margin titles.
For the full year, Cable Networks revenues were up 3% from $2.18 billion to $2.24 billion.
For the company overall, revenue of $3.91 billion for the fourth quarter of 2015 were up 6% from $3.68 billion for the prior-year period. For all of 2015, revenues were $13.89 billion, up 1% from $13.81 billion in 2014. The company said that growth was driven by a 15% increase in affiliate and subscription fees, reflecting higher rates, as well as increased revenues from pay-per-view boxing events.
Advertising revenues decreased 3%, reflecting a decline in local advertising revenues as a result of the benefit to 2014 from the midterm elections and lower radio advertising.
On an adjusted basis, 4Q 2015 operating income of $747 million grew 6% from operating income of $707 million from the same prior-year period, primarily reflecting the higher revenues. For the full year, operating income of $2.84 billion in 2015 decreased 4% from $2.97 billion in 2014, reflecting an increased investment in programming and digital distribution initiatives.
Read the company’s report here.
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