Comcast Touts NBC Ratings Momentum, Upfront Outlook
Comcast management continues to see strong momentum at NBCUniversal and its NBC broadcast network, which could finish the season as the top network in primetime in the 18-49 demographic, chairman and CEO Brian Roberts told analysts during an earnings conference call on Tuesday.
Roberts touted the strong financial performance of the entertainment arm in the first quarter, citing "significant ratings momentum" at NBC and "really strong" film results.
He also highlighted that the NBC momentum goes beyond the Winter Olympics in Sochi, as executives lauded the best season-to-date broadcast ratings in a decade for the network. Roberts also spoke of the "incredible turnaround story" that NBC has become in primetime and the "amazing" trends in late night thanks to Jimmy Fallon and Seth Meyers, whose show he said is off to a strong start.
All this has positioned NBC to be the number one network in the 18-49 demo in primetime and late night this season, Roberts said.
Comcast CFO Michael Angelakis predicted a "very successful" upfront for NBCUniversal based on the ratings momentum and said it could prove to be a "meaningful correction year" that could see NBC starting to close a monetization gap with other networks due to years of under-performance that management has repeatedly talked about.
NBCUniversal CEO Steve Burke said NBC could finish 12 percent ahead of the number two network, compared to a 17 percent deficit with the winner last year, saying that swing should be "worth a lot" in the upfront. He didn't provide a specific dollar estimate.
The executives didn't specify what data they were using for the predictions. CBS won last year's 18-49 demo race.
Management reiterated that the Sochi Olympics were profitable but didn't detail how much of a profit they threw off. "Any way you look at the Olympics, it was a tremendous success," Roberts said. "NBCUniversal has real momentum, and we believe this is sustainable" throughout 2014.
Roberts also said that management remains bullish on a big possible acquisition that is being reviewed by regulators. Earlier this year, Comcast struck a $45 billion deal to acquire Time Warner Cable. Charter Communications, in which John Malone's Liberty Media has a 27 percent stake, had stalked TWC for a deal, but lost out.
Charter has been talking to Comcast about acquiring cable systems with about 3 million subscribers that the company has said it plans to divest. According to a recent Financial Times report, a deal could be valued at $18-$20 billion, but Comcast so far hasn't detailed in which markets the cable systems may be.
Angelakis said there are different approaches to divestitures, including an asset sale and a spinoff of systems that will be sold. The CFO said the firm will focus on shareholder value, including tax efficiency, in deciding the best structure.
Angelakis didn't provide any latest estimates for when the regulatory review of the deal could be concluded or when the company may make a decision on divestitures.
The Comcast CFO also said that the second quarter would see the opening of a much-anticipated second Harry Potter attraction at the Universal Orlando theme park. The company had previously mostly talked about an opening around summertime.