CBS grows revenue, cuts loss thanks to advertising resurgence, retransmission fees
CBS Corp. Chief Executive Leslie Moonves credited a growing advertising market as the key factor that helped to narrow losses at the entertainment company best known for its top-rated broadcast network.
CBS' advertising revenue jumped 17% during the first three months of 2010 to $2.38 billion, fueling a rise in overall revenue to $3.53 billion. The company benefited from airing the Superbowl in February along with a rise in demand among marketers as the economy improves.
Net loss for the quarter was $26.2 million, down from $55.3 million in the same quarter last year. That includes a $57.1 million charge that the company took for job cuts.
"We have been the biggest beneficiaries of a very, very strong scatter market," Moonves said, referring to advertising time bought piecemeal during the television season.
"We're well-positioned going into the Upfront," he added, speaking of the annual spring event when advertisers buy time for the upcoming television season. "It will be one of the strongest in years."
He added that recent agreements for controversial retransmission fees, through which cable and satellite operators pay to carry broadcast channels such as CBS, will generate $100 million in revenue for the company this year and "multiples of that number" in the future.
The company's fastest-growing division was local broadcasting, with revenue up 19%, a very positive sign for the troubled local television station business. In addition to the improving ad market and the Superbowl, Moonves said growing political ad spending is helping and that a recent Supreme Court ruling that removes limits on spending by corporations and unions should help CBS.
The entertainment division, which includes the CBS network along with its online assets and new film division, saw revenues grow 15% to $2.08 billion.
Moonves gave a vote of confidence to CBS Films, which recently released its second film, "The Back-Up Plan," to modest results after the January flop "Extraordinary Measures." "[The Back-Up Plan] performed considerably better than our first film, and we anticipate continued improvement for this new division going forward," he said.
Asked about a New York Magazine report that CBS and CNN may combine their news gathering operations, Moonves would only say that his company has been talking to CNN for years about a potential partnership. "We're in constant dialogue about how do we make our business better, and we will continue to do that," he said.
-- Ben Fritz