'Newsday' Whacks Cablevision's Bottom Line, TV Delivers

Cablevision System Corp. took a sizable hit in the fourth quarter, mostly due to troubling print advertising business with Long Island, NY publication Newsday.

In a separate announcement the company said it would start charging consumers to access the paper's Web site.

Cablevision had a $136.5 million net loss on an 11.4% gain of $2.1 billion for the fourth quarter. Cablevision took a $407.6 million write-down against Newsday, as a result of declining print advertising sales. Company officials say Cablevision suffered "greater than anticipated economic downturn." Total revenue was $107.1 million for the period.

In the newspaper industry, the company is making a rare move in asking consumers to pay a fee to get a publication online. Cablevision Chief Operating Officer Tom Rutledge said to analysts in a conference call: "Our goal was and is to use our electronic network assets and subscriber relationships to transform the way news is distributed."



Concerning its endemic cable business--under its telecommunications division--revenues climbed 7.4% to $1.3 billion, with operating income up 4.1% to $498.1 million.

The company said basic video customers were virtually flat in the fourth quarter. But big year-to-year increases occurred among its digital video subscribers--climbing 8% or 208,500 subscribers, which company officials says is its main cable video product. Penetration of digital video services is now over 90% across the company's footprint.

It noted that 58% of its video customers now buy its bundle of three services: phone, video, and Internet. Cablevision has 40% penetration of its voice lines among all its customers. Cablevision said revenue per subscriber climbed $1.74, or 1.3% to $134.85 a month on average.

Cablevision also said its HDTV business is up 44% to 1.5 million subscribers. Broadband customers are up 8% as well, a rise of 173,000 customers. Voice customers grew 18% or 286,600 new subscribers.

Some better news was its programming networks, under its Rainbow division, where revenues were up 7% to $191.3 million, with operating income up 8% to $69.8 million. Advertising sales witnessed a 3% gain during the period--despite a troubling economy--mostly driven by growth at its women-target network, WE tv.

Rainbow said WE's key audience, women 18-49, witnessed a big 39% increase for the full year 2008 over 2007. Ratings at AMC were up 7% for the year among 18-49 viewers, mostly from its original scripted shows "Mad Men" and "Breaking Bad."

For the year, Rainbow said subscriber increases were 9.6% at IFC, 6.6% at WE tv and 2.0% at AMC.

At its Madison Square Garden division--which includes the venues MSG Arena, the WaMu Theater at Madison Square Garden, Radio City Music Hall, Beacon Theater and The Chicago Theater, sports programming networks MSG and MSG Plus and young-skewing Fuse, and three pro sports teams--revenues sank 2.1% to $405.8 million and there was a steep drop in operating income of 85.8% to $8.8 million.

Entertainment events decreased during the periods, and the division incurred higher marketing costs and legal fees.

Next story loading loading..