CBS TV Stations’ 3Q Revenue Rises 10%

CBS Corp.’s Local Broadcasting (which includes TV and radio stations) revenues for the third quarter of 2014 were $680 million compared with $641 million in the same prior-year period. CBS Television Stations revenues increased 10%, while CBS Radio revenues were up 2%.

The increase in Local Broadcasting revenue, the company said, was driven by higher political spending as a result of midterm elections and higher affiliate and subscription fee revenues.

Local Broadcasting OIBDA for the third quarter of 2014 rose 18% to $214 million from $181 million for the same prior-year period, primarily driven by the revenue growth and lower programming costs. Operating income for the third quarter of 2014 includes restructuring charges of $14 million and a noncash impairment charge of $52 million associated with a radio station swap.

Cable Networks revenues of $624 million for the third quarter of 2014 rose 5% from $596 million for the same prior-year period. This growth was driven by an increase in revenues from the licensing of Showtime original series, as well as gains in affiliate revenues from higher rates at Showtime Networks, CBS Sports Network, and Smithsonian Networks and an increase in telco subscriptions.

Cable Networks revenue growth was partially offset by lower pay-per-view revenues as the third quarter of 2013 benefited from the Floyd Mayweather/Canelo Alvarez boxing match, the highest-grossing pay-per-view event of all time.

The company as a whole posted revenues of $3.37 billion for the third quarter of 2014 increased 2% from $3.30 billion for the same quarter a year ago.  This growth was driven by a 4% increase in content licensing and distribution revenues from higher international and domestic licensing of television programming.

Advertising revenues grew 2%, driven by the broadcast of Thursday Night Football on CBS and political revenues associated with midterm elections.

Affiliate and subscription fees were even with the third quarter of 2013, because of a significant pay-per-view boxing event a year ago that affected the revenue stream comparison by six percentage points.

Cable affiliate fees, retransmission revenues, and fees from CBS Television Network affiliated stations all continued to grow in this year’s third quarter.

Adjusted operating income before depreciation and amortization of $814 million was down 2% as a result of an increased investment in television programming, mainly associated with new contracts with the National Football League. The investment in NFL programming contributed to the successful launch of three new CBS-owned television series in the 2014-15 television broadcast season, which all generated higher ratings in their respective time periods compared with the prior year.

“Our third quarter growth reflects the success of our efforts to create and monetize our premium content,” said Leslie Moonves, president-CEO, CBS Corp. “I am particularly pleased with the CBS Television Network’s encouraging start to the fall season, which has reloaded our owned content pipeline in a big way with Madam Secretary, Scorpion, and NCIS: New Orleans, along with new owned hits from Showtime and the CW.

“Our local businesses had a strong quarter as well, including increasing political spending and higher retransmission consent fees. Also during the quarter, we renegotiated new station affiliate contracts with LIN Media, Tribune Broadcasting, Media General, and Gray Television with more to come later this year, bringing us that much closer toward our stated goal of $2 billion in retransmission consent and reverse compensation revenues by 2020.

“We are also capitalizing on growing consumer demand by expanding into emerging platforms. This includes the recent launch of CBS All Access, which allows our “super fans” to watch CBS wherever they are. At the same time, we are returning more value to shareholders than ever before, and we continue to have great confidence in our future as a content company in this ever-expanding marketplace.”