Cablevision Lost 35,000 Cable Subs in Q4 Due to Fox Dispute
NEW YORK – Cablevision Systems on Wednesday said it lost 35,000 basic cable subscribers in the fourth quarter due to its big program fee showdown with News Corp./Fox late last year.
However, quarterly profit jumped 45 percent amid revenue growth and a recent acquisition.
The basic subscriber losses in the latest quarter, before accounting for the addition of subscribers from the recent acquisition, were well above the loss of 2,800 recorded in the fourth quarter of 2009 and 24,500 in the third quarter. Wall Street analysts had on average looked for losses of about 11,000. "Subscriber losses of 35,000...were the worst since the launch of [Verizon's] FiOS," said Sanford C. Bernstein analyst Craig Moffett.
The cable operator had an intense retransmission fee showdown with News Corp. late in 2010, which led to a temporary program blackout in Cablevision homes, and the company has also faced competition from telecom video providers. “We think that almost all of the decreased sales or disconnects…resulted from the retrans fight,” Cablevision COO Tom Rutledge said on an earnings conference call, describing the showdown’s effect as “significant.”
Customer trends returned to normal after the battle, he said, concluding: “ I think it’s an anomaly.”
He also reiterated that Cablevision felt it had to take a stand faced with a take-it-or-leave-it proposition from News Corp. “We think that taking the hit was worth it,” Rutledge said, pointing out the resulting lower programming costs.
Meanwhile, Josh Sapan, president and CEO of Cablevision's Rainbow Media cable networks unit, was asked by an analyst about the state of talks between his company's AMC network and Lionsgate about the future of hit show Mad Men. "We are in discussion, and we think we will come to a resolution," Sapan said, lauding the "great relationship" his firm has with Lionsgate. He didn't provide further details though.
Cablevision’s quarterly profit rose to $114 million, compared with $78.4 million in the year-ago period, helped in part by investment and other gains. Revenue grew 5.7 percent to $1.87 billion boosted in part by the acquisition of small cable operator Bresnan, which closed in December.
Cablevision also said its board has authorized the repurchase of up to an additional $500 million in stock, and its planned spin-off of its cable channels is on track.
Cablevision president and CEO James Dolan said: “For 2011, we are moving forward with the spin-off of our Rainbow business and believe we are on track to complete that transaction by mid-year.”