NBCUniversal CEO Steve Burke: 'We're Off to a Great Start'
Six months after cable giant Comcast acquired a 51 percent stake in the company, the executive again urges patience for a turnaround of NBC and says his team is investing more in shows, such as "The Voice," local news and other initiatives.
NEW YORK - "We're off to a great start." That is how NBCUniversal CEO Steve Burke on Wednesday summarized the company's first half year under majority ownership of cable giant Comcast. "After six months, we are feeling very good."
While early investments in new programming have shown success, there is "a lot more opportunity," the long-time right-hand man of Comcast chairman and CEO Brian Roberts said on Comcast's conference call after its latest quarterly earnings report.
And he once again emphasized that the turnaround at the NBC broadcast network is likely to take two to three years rather than happen overnight.
"Content is more valuable today than the day we did the deal" 18 months ago, and retransmission consent fees have grown since then, and online video content deals are now "significantly greater," Burke said, adding that this means that the broadcast TV outlook is now "much rosier." But NBC remains in fourth place in terms of ratings, and people shouldn't expect miracles, Burke said, even though he said he is "very confident we will get there.
Comcast closed its acquisition of a 51 percent stake in NBCUniversal, which posted stronger second-quarter results, at the end of January.
Burke and Roberts on Wednesday also once again discussed their way of approaching synergies - a word that got a bad rep under failed mergers, such as the AOL-Time Warner combination - between Comcast and NBCUniversal. They referred to what the company internally has called "Project Symphony" to describe the process of bringing together the two companies to put their combined promotional and other resources behind key projects, such as has been the case with animated film success Hop and NBC show The Voice.
Asked if the weak economy and U.S. debt crisis have affected the advertising market, Burke said on Wednesday: "We don't see any signs of a deceleration." But he said he would keep a close eye on the ad market and expressed concern about the economy.
"We see this year and next year probably as investment years," Burke said about his approach to building the NBCUni business.
The broadcast network hasn't been getting the investment necessary to compete in recent years, he said, highlighting increased production budgets for The Voice to ensure "great coaches," marketing and a good look. After making the show the company's number one promotional priority, it surpassed the most optimistic expectations to become a "bona fide hit," he said. And it helped second-quarter financials at the network and TV stations despite the expenditures it brings with it, he added.
Burke also highlighted that the company is spending on its local TV stations, particularly in news, as well to boost ratings. Among the recent hires are more than 40 reporters, 20 producers and spending on investigative units in five markets, according to Burke, who mentioned that he has already seen an improvement in the local station performance in New York.
Cable network investments are also key. They have meant that the quarterly number of original episodes was up by 12 percent, which tends to be a drag on near-term results, but drive advertising rates and affiliate fees longer-term, Burke told analysts on Wednesday's call. He mentioned new USA shows Suits and Necessary Roughness as examples of shows that were given the green light after the Comcast deal.
Discussing other key priorities, Burke said NBCUniversal's recent long-term Olympics rights deal would be profitable over the term of the agreement and prove to be "a smart investment."
He also said that Spanish-language broadcaster Telemundo provides an "attractive growth opportunity" for NBCUniversal.
Comcast CFO Michael Angelakis was asked Wednesday if the cable giant could look to buy minority shareholder General Electric out of NBCUni early due to its strong early performance. But he said that is likely not in the cards, and it is too early to talk about a next phase of an increase in the ownership stake.