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The cable giant’s chairman and CEO Brian Roberts on the company’s earnings conference call on Thursday touted the latest year of growth of its entertainment arm, with NBCUniversal CEO Steve Burke saying, “We still have a lot of opportunity to grow the company.”
Burke lauded what he said has been the highest compound growth rate of all entertainment conglomerates over the six years that Comcast has owned the company and touted the future upside, but also said that maybe it is not “quite as much” as in “the early days.”
Asked about the biggest areas of possible upside for NBCUniversal, Burke cited theme parks, saying “we have a long, long runway as long as we invest”; consumer products, which currently amounts to about $200 million dollars of operating cash flow and also has “a long, long runway”; and Telemundo, which he said “essentially was making no money at all and now a couple hundred million dollars a year,” with ratings suggesting “we should make significantly more than that” ahead.
Comcast management said NBCUniversal capital expenditures would increase about 10 percent in 2017 driven by theme parks investments, with CFO Mike Cavanagh highlighting the strong returns such park investments have brought.
The call came after the company posted better-than-expected fourth-quarter financials, including at entertainment arm NBCUniversal, and said it grew its pay TV subscribers for the full year.
Asked about the Trump administration and what it will mean for the regulatory environment, Roberts said: “Regulatory certainty is the same as it is for management. It helps you have the confidence to make long-term plans.” He added: “We are encouraged by the prospect of rules that we believe will encourage … investment,” whether that is tax decreases or revisiting the approach to net neutrality.
Full-year film unit operating cash flow came in at $697 million, compared to the record $1.2 billion reported in 2015, driven by the hits Minions, Furious 7 and Jurassic World. Looking at 2017, the company has a stronger slate. Roberts lauded such upcoming tentpole releases as Fifty Shades Darker, Despicable Me 3 and the latest in the Fast & Furious franchise. And Cavanagh said 2016 was still one of the best years ever for the film unit.
NBC is off to a “great” start to the new TV season, with the biggest lead ever at this point of the season in the 18-49 demo, Roberts also said on Thursday. He cited the success of the likes of the “wonderful” new hit series This Is Us as well as Saturday Night Live, which has its most-watched season in 20 years, and he lauded Telemundo for beating Univision “on many nights” for the first time ever.
Asked by an analyst if NBCUniversal was interested in possibly buying more TV stations if ownership caps were changed, Burke said: “We like the broadcast business.” He added: “There isn’t a necessity to increase our footprint,” but if ownership caps do change, that could be an opportunity.
Comcast on Thursday also said it added 161,000 video subscribers in 2016, compared with a 2015 decline of 36,000 and marking its first subscriber gain in 10 years. He said “this is a fantastic” performance, particularly amid intense competition and changes in the pay TV market.
Analysts have been lauding improved subscriber momentum at big cable operators as of late amid ongoing concerns about cord cutting, which has seen some consumers end their pay TV subscriptions, affecting the businesses of distributors and networks companies alike.
Asked if Comcast could grow video subs even stronger ahead, Comcast Cable boss Neil Smit said, “We continue to see opportunity in video.”
Discussing the recent integration of Netflix into set-top boxes, Roberts spoke of the “incredible level of sign-on and engagement.”
The exec also said the measured launch of a wireless service will be a key focus for the company’s cable business this year. Roberts signaled that improving user churn trends is a key focus in terms of the company’s wireless strategy.
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