Comcast CFO Touts NBCUniversal Studio Performance, Retrans Growth
CFO Michael Cavanagh speaks at the UBS Global Media and Communications Conference in New York.
Cable giant Comcast's entertainment arm NBCUniversal has elevated its film studio performance and is in good shape to continue its financial momentum despite a smaller release slate in 2016, CFO Michael Cavanagh said Monday at the UBS Global Media and Communications Conference in New York.
With the studio set to hit a profit record this year, thanks to such box-office hits as Jurassic World, Furious 7 and Minions — which all topped $1 billion worldwide, the first time any studio has had three such blockbusters in a single year — Cavanagh said the company will continue to look for solid financials in the movie business in the coming years. He said the studio will have a "strategic" slate with big franchises and animation titles in 2016, "but not as big a slate" as this year. “We have lifted the cruising altitude of the film business and will continue to drive that," said Cavanagh.
He later explained that the studio has taken a "strategic" approach to its slate that allows it to manage films for single years and over multiyear periods. "The business is in good shape to be a major contributor in the future," said Cavanagh.
Among the organizational changes that have helped film performance this year and will continue doing so are the fact that Universal has made its marketing side a global business and taken its China distribution in-house, the Comcast CFO said.
Cavanagh also touted growth in retransmission consent fee revenue at NBC, saying it will come in at around $400 million-$500 million this year, with the higher figure in line with a target cited in the past by NBCUniversal CEO Steve Burke. Cavanagh also forecast $800 million in retrans revenue in 2016, well above the $4 million the company earned years ago when it first started receiving retrans fees from pay TV operators.
Cavanagh said that beyond retrans revenue, theme parks also will continue to be a key growth driver at NBCUniversal in 2016. The company has been adding new attractions at its parks and in September agreed to buy a 51 percent stake in theme parks operator Universal Studios Japan for $1.5 billion, which has so far operated as an independent company under license from NBCU.
Can investors expect lower programming cost growth at the Comcast cable systems business? "Sadly, no," said Cavanagh.
Earlier in the year, Comcast, the largest U.S. cable operator, abandoned its planned acquisition of Time Warner Cable amid regulatory opposition. Charter Communications, in which John Malone's Liberty Media owns a big stake, then struck a deal to buy TWC, which is being looked at by regulators.
The UBS investor conference features the CEOs and other top executives from industry players. It is widely seen as the final event of the year where big-name execs provide an outlook for the new year and sound off on hot-button issues.