Comcast: NBCUniversal Broke Even on London Olympics, Expects Profits From Future Games
UPDATED: The entertainment company recorded a $120 million profit from the Summer Games in the third quarter.
Cable giant Comcast Corp. on Friday reported a $120 million third-quarter profit on the London Olympics for its NBCUniversal entertainment arm and confirmed that it broke even on the Summer Games.
Comcast chairman and CEO Brian Roberts told an earnings conference call that his team continues to expect future Olympics to turn a profit. “We now have more confidence than ever the Olympics can be profitable,” he said.
Comcast CFO Michael Angelakis later said: “Overall, the London Olympics were breakeven when you take into account other Olympics-related revenues that are booked over multiple quarters.”
NBCUniversal had earlier in the day posted quarterly revenue of $6.8 billion, up 31.2 percent over the year-ago period. The Summer Games helped drive the revenue growth by adding $1.8 billion in the quarter. Excluding this impact, revenue was up 8.3 percent.
Operating cash flow rose 19.9 percent to $1.1 billion. The figure included $120 million of operating cash flow generated by the Olympics. The company said the positive contribution from the Olympics "reflects the settlement of a $237 million unfavorable contract recorded in acquisition accounting in 2011." Excluding the Olympics impact, operating cash flow increased 7.3 percent in the latest period.
Roberts told the earnings call “how proud” he was of the Olympics coverage and results, lauding staff for ensuring that “the whole company worked together.”
And, he said, the Olympics helped launch NBC’s fall primetime schedule, which has started off successfully. Roberts said he was hopeful that this was the start of a turnaround for NBC, which has in recent years faced ratings challenges.
NBCUniversal CEO Steve Burke said that it has been "a very positive start for the season for us," but added that "broadcast profitability could be dramatically higher than it currently is." He said "we have a lot of upside" in advertising rates, affiliate fees and retransmission consent fees, for which the company has already struck some hand-shake deals that will turn into real money when current carriage deals are extended.
Overall, he said about NBCUniversal, "We feel like we are on the right path, but there is a long, long way to go." And Roberts added, "Steve Burke and his team are making steady progress throughout NBCUniversal."
Asked where TV viewers are going in the digital age, Burke said, "People are watching more video today." But the challenge for TV companies is that much viewing is in places that aren't measured or monetized, including subscription VOD and online streaming. The challenge is to "over time make sure that that changes, so that the ecosystem continues to remain healthy," Burke said.
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