CBS Q1 Profit Surges on Super Bowl Advertising
CBS Corp. said revenue and net income in the first quarter increased due to the broadcast of Super Bowl 50 on the company’s flagship TV network as well as three more NFL games than in the year-earlier period, underscoring the important of pro football to the economics of the modern TV business.
The New York owner of CBS, Showtime and Simon & Schuster said first quarter profit came to $473 million, or $1.02 a share, compared with $394 million, or 78 cents a share, a year earlier.
Revenue in the first quarter revenue rose 10%, to $3.85 billion from $3.50 billion in the year-earlier period, owing to increases in ad revenue from the Super Bowl as well as affiliate and subscription fees. Overall ad revenue grew 31% while revenue from affiliate fees and subscriptions grew 15%, CBS said. Advertising revenues for the CBS network grew 49%, driven by the NFL broadcasts as well as 12% growth in underlying advertising.
During a call with investors, Leslie Moonves, the company’s chairman and chief executive noted the company’s results would have been buoyed even without the football games. He cited the Grammys as well as political advertising as factors in CBS results for the period. “There is a shift in dollars coming back to television,” he said, noting that Madison Avenue had growing concerns about performance of advertising on digital and basic-cable outlets.
Even so, football helped buoy the performance. CBS continues to broadcast Sunday afternoon games but will split a passel of Thursday-night football contests next season with NBC.
Revenue from the company’s cable operations fell to $525 million, compared with $539 million in the year-earlier period, owing to lower international licensing revenue. Revenue from publishing was flat while operating income grew owing to lower production costs at Simon & Schuster.
Advertising was robust at the company and is likely to ramp up in weeks and months to come, according to CBS’ chairman and chief executive, Leslie Moonves. “Looking ahead, we are in a very enviable position for this year’s upfront, given the ongoing strength of our primetime lineup and a robust advertising marketplace,” the executive said in a prepared statement. “Plus, advertising is poised for even more growth in the back half of the year as political spending ramps up.”
The company sketched out plans for the future, including the direction of some of its newer ventures aimed at consumers who use streaming video. Moonves said CBS planned to, over time, roll out “three to four” original series per year for its “CBS All Access” subscription video service. Already, the company plans to launch a new “Star Trek” series that will debut concurrently on All Access and CBS broadcast, then stay at the digital service.
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