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NEW YORK — Fresh off the nearly $1 billion deal that jump-started this year’s upfront marketplace, NBC Universal is poised for growth on all fronts, executives told financial analysts Thursday.
President and CEO Jeff Zucker predicted that NBC Uni would bring in $3.9 billion in upfront revenue companywide for the 2007-08 television season, a take that would be flat to up slightly when compared to last year. Within that, NBC primetime is projected to take in $1.8 billion-$1.9 billion, about even with last season. Telemundo, other dayparts and NBC Uni cable are expected to be up year over year.
“Pricing is positive on the network and cable side, even with the conversion” between program ratings and commercial live plus three ratings, Zucker said, referencing the $1 billion deal with Group M that included a companywide portfolio with the exception of Olympics and NBC Sports (HR 6/14). He declined to comment on reports that average CPMs were 4%-5% up from last year.
Live plus three ratings count those who watch live, plus those who watch on DVR during the following three days. Commercial minutes are measured separately.
At the four-hour analysts meeting in NBC’s Studio 8H, Zucker and his key executives sought to paint a picture of a company that is clicking on almost all cylinders, with success in news, entertainment cable, digital and international.
Zucker noted that the cable portfolio and film and digital platforms make up 80% of earnings, with network TV accounting for 5%-10% of the total. After a plunge in primetime operating profit — from $900 million in 2004 to $100 million in 2007 — Zucker said the picture will be better this year.
“The hit to our primetime profit is behind us,” he said.
Zucker said the new management team at NBC Entertainment will transform the network’s TV fortunes. “It’s the one problem we have and we know it,” he said. “But it’s not the drag on our bottom line that you’d think it is.”
Two of the executives charged with renewing NBC primetime, entertainment co-chairman Marc Graboff and Universal Media Studios president Katherine Pope, appeared before analysts and touted their fall schedule.
“We are aggressively rebuilding,” Graboff said. “We need to return to the top of the heap.”
Entertainment co-chairman Ben Silverman, who recently joined the company after the departure of NBC Entertainment president Kevin Reilly, was back in Los Angeles, said to be working on the schedule.
NBC pins high hopes on “Bionic Woman,” a 2007 revamp of the 1970s series, as well as “Journeyman,” a 20th Century Fox Television production that occupies the coveted 10 p.m. Monday time slot after “Heroes,” the network’s breakout hit last year. Pope also noted “Chuck” and “Life” as potential hits.
Zucker cited the management team, especially the addition of Silverman, in talking about NBC’s primetime strategy.
“That’s the surest sign I can give you that we’re not satisfied with where we are and we are committed to fixing it,” he said.
Asked by an analyst whether the project would take two to three years, he said executives are “trying to ensure it doesn’t take that full 12-18 months.”
Marc Shmuger, chairman of Universal Pictures, said the company is reinvigorating its strategy in film with an increased focus on tentpole/franchise creation and international efforts while partnering with Chris Meledandri to boost its family-movie production to 2-3 films a year by 2010.
Digital chief Beth Comstock said NBC is poised to reach $1 billion in new-media revenue in 2008, a year ahead of a previous forecast. “We’re performing better than expected,” she said.
Comstock said a name would soon be attached to the NBC Uni-News Corp. online video joint venture that is signing up new partners before its September launch. She said the venture will be well positioned to capitalize on the $1 billion worth of online video inventory that will soon exist.
As competition from the Fox Business Channel faces CNBC this year, CNBC president Mark Hoffman said the channel had improved, with a 200% increase in business-day viewership since its low point in 2005, and double-digit revenue growth. He touted the greater business focus of primetime and CNBC’s revamped daytime, along with investments in longform content.
“We’re focused always on playing offense with competitors here today or (those who) might be coming down the road,” Hoffman said. A high-definition version of CNBC will debut in January, he said.
NBC Uni predicted that operating profit in 2007 would be up 5% to $3.1 billion on revenue of $16 billion. The company also released its first look at 2008, which for its ad-supported TV networks would include stronger revenue on political advertising as well as the Summer Olympics in Beijing. It said revenue would increase 5%, with operating profit up 10%.
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