GE chief Jeff Immelt was asked by Charlie Rose in an interview on his PBS broadcast this evening why the company sold a majority stake in NBCUniversal to Comcast. “We’re an operating company, we’re not a holding company. When I go into an oil and gas review I have 1,000 ideas. When I see our health care business I have 1,500 good ideas. At the end of NBC I’d say, ‘Make better shows and buy more cable’…I didn’t have 52 good ideas. I had two.” Still he says he doesn’t regret the period when he ran the entertainment giant. He noted that during the GE years NBCU launched the Harry Potter theme park attraction, aired the Olympics and the NFL, introduced The Voice, and beefed up its cable network holdings.
UPDATE: The Walt Disney Co was the last major studio and network to report quarterly earnings, and its fiscal 3rd quarter profit rose 40% on the strong box office grosses from Pixar’s Toy Story 3, Marvel’s Iron Man 2, and Tim Burton’s Alice In Wonderland 3D. As promised, here is an earnings roundup showing that Big Media is alive and well and even flourishing not just this quarter but in many cases for next quarter or even the entire year. Yet the trickle down effect has been slow or nonexistent for Hollywood. After rounds of layoffs during the economic crisis, the moguls are still slow to put people back to work. And the movie and TV community still is underemployed. But what everyone can count on is that Big Media’s good news for the benefit of Wall Street will turn into bad news to the detriment of talent, behind-the-camera, post-production, and below-the-line unions when it’s time to negotiate:
August 5th: Viacom Inc Reports Sharply Higher Earnings For Q2
Credit the rebounding economy and recovering advertising market. Net earnings rose to $420 million, or 69 cents a share, up 52% from $277 million, or 46 cents a share, a year ago. Executive Chairman Sumner Redstone gushed, ”With six months under our belt in this calendar year, day after day our confidence continues to grow as the emerging economy recovery builds. Now of course we’re not all the way back, but the light is brighter than it’s been for some time… Consumers are returning to the marketplace, marketers are beginning to spend again to grow revenues and capture share and Viacom is now and will continue to benefit.” Revenue at Viacom’s media networks group rose 6% to $2.1 billion.
Viacom CEO Philippe Dauman said ad revenue growth has been improving quarter by quarter. “Once we get into October and into the December quarter, we will benefit from this upfront where we have greater volume than last year at higher pricing. Dauman singled out Jersey Shore as a show where ”we have advertisers scrambling to get on it. We have advertisers who want to be wall to wall in particular episode. We’re turning them away.” Viacom’s movie business was down 10% to 41.25 billion, led by a 43% drop in home entertainment revenue. Also, Paramount Pictures has primarily been distributing others’ films like Iron Man 2 and Shrek Forever After in 2010 and self-financing its own pics. It is deliberately pursuing a strategy of a smaller slate of films in 2010-2011. Still, the film unit booked income of $69 million, reversing an $8 million loss in the same quarter a year ago. Viacom continued to post equity losses from its EPIX joint venture but said it should approach break-even by the end of the year.
August 4th: News Corp Posts Improved 4th Quarterly Results
News Corp posted a profit of $875 million, or 33 cents a share, for its fiscal 4Q ended June 30th easily beating analysts expectations. That compared with a loss of $203 million, or 8 cents a share, a year ago, when News Corp took an impairment charge. Revenue grew 6% to $8.11 billion, as companies spent more to advertise on the company’s television stations, TV channels and newspapers. That beat the average forecast of analysts of $8.05 billion. COO Chase Carey explained that brisk sales of advertising at Fox Broadcasting and the company’s cable television networks made the difference, while ad rates at the Fox network are up by a double-digit percentage from this spring. Ad rates are even better at the cable channels, which already represent more than 50% of the company’s profits. Local television station advertising revenues improved 29% in the quarter and 8% for the year compared to the same periods a year ago, reflecting strength in the automobile and telecom sectors.
Following quarter after quarter of awful performance, including a weak first quarter down 49% because of a too-costly Winter Olympics, NBC Universal turned in the best 2nd quarter revenue performance of all GE units — up 13%. This may be too late to matter much to GE but it’s good news for Comcast which could take possession of the TV/film company by the end of the year if it receives regulatory approval for the deal. (It recently won European Union approval but awaits the FCC’s.) NBCU’s profit hit $607 million, with revenue rising 5% to $3.75 billion. News reports say GE chairman/CEO Jeff Immelt singled out NBCU’s “good revenue and profit growth” — including the broadcast biz where revenue rose 1% and profit 6% helped by a better ad upfront market (+18% in dollars booked) and scatter ad market (+20%). Even NBCU’s O&O’s gained 25%. And once again cable was NBCU’s primary driver of growth, with revenue up 7% and profit up 10%.
The New York Times was given an early peek at chairman/CEO Jeff Immelt’s message to investors contained in GE’s 2007 annual report to be released on Wednesday. Turns out the bossman addresses all those NBC Universal-is-for-sale-after-the-Olympics rumors. “Should we sell NBCU? The answer is no!” Immelt writes. “I just don’t see it happening. Not before the Olympics, not after the Olympics. It doesn’t make sense.” Do I believe him? Well, I know the Hollywood folks parented by GE have long insisted they don’t hear sale talk coming from Immelt. But Big Media barons lie when their lips are moving. I presume Immelt’s hand (or his ghostwriter’s) was typing.