Comcast CFO Touts NBCUniversal Upside, Talks "Optimism" About Business Environment Under Trump

On visits from his corporate superiors at Comcast
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"I dress the place up to look like a movie studio. I bring all the Winnebagos to the front; I have people pushing sets around, like one of those old Cecil B. DeMille movies. So they come for two days every two, three months, and we look like we're a bustling metropolis, and then we go back to being a regular old business."

Michael Cavanagh also spoke about DirecTV Now and Comcast's Netflix integration at the UBS Global Media and Communications Conference.

Comcast CFO Michael Cavanagh at an investor conference Wednesday touted the performance of and further upside for entertainment arm NBCUniversal and weighed in on what President-elect Donald Trump could mean for U.S. businesses and cable regulation.

Speaking at the 44th annual Global Media and Communications Conference in New York, he said NBCU after a smaller slate this year has a "very promising year on the film side" in 2017. He cited the return of big franchises next year, such as Fast 8, Fifty Shades Darker and Despicable Me 3, among others.

But Cavanagh lauded 2016 as a "strong year for what we had" in the film unit, highlighting the strong performance of original animation movie Secret Life of Pets, which he said benefited from the company's "Symphony" cross-promotion efforts. And he said "we’re very excited about Sing." 

Touting the acquisition this year of DreamWorks Animation, including a healthy consumer products business, Cavanagh told the UBS audience that consumer products is a key upside opportunity for the film unit and NBCU overall. "We got a runway to really go after that business," he said.

Discussing the TV business, the Comcast CFO said NBC has had success dominating big nights thanks to such flagship programming as the Olympics and the Golden Globes. He cited retransmission consent fee revenue as a source of further upside and said the combined broadcast and cable upfront held by NBCU for the first time this year offered advertisers “a powerful package.” 

Cavanagh also lauded continued growth in the theme parks business thanks to increased investment, including new rides. The theme parks operation "has really been transformed," he gushed.

When asked what the incoming Trump administration could mean for business, Cavanagh told the UBS conference there has been “optimism,” it would be good for businesses. “We got to go from the optimism in the market to really seeing what happens," he said, but added that he, too, was optimistic "that it will be a good environment for business broadly, which I think will help the economy very broadly, which will help everybody, including us." Added the Comcast CFO: "And then specifically what happens in our industry, we feel optimistic about as well.”

He cited tax reform as a possible benefit for companies, highlighting that “we’re a high tax payer.” And asked about net neutrality, he said past regulation didn’t hurt the cable sector, but that “the overhang of where it could go in the future was something that had a [chilling] effect.”

On Tuesday, pay TV industry top executives, from AT&T boss Randall Stephenson to Charter Communications CEO Tom Rutledge, had similarly said that the Trump administration could bring regulatory relief for cable and telecom companies.

Asked about new streaming video service DirecTV Now and other planned new streaming offers, set to launch next year, Cavanagh said Comcast has invested in its video service and added VOD and other content. Overall, he said the company felt well positioned to compete, and he vowed it was always ready to be "hustling to compete.”

Asked about Comcast's recent deal to integrate Netflix into U.S. set-top boxes, the company's management has said that Netflix customers have been inconvenienced, meaning the integration allows for happier customers. “Customers like it," Cavanagh said Wednesday. That’s the point." He concluded: “It’s good for them, good for us.”

Comcast first got a controlling stake in NBCU in early 2011, before buying full control in 2013. It has since more than doubled the operating cash flow at NBCUniversal