Time Warner: TV, Mags Profits Zoom

Jeff Bewkes

Time Warner CEO Jeff Bewkes touted a strong first quarter at Time Warner overall "fueled by a healthy advertising environment" at both its ad-supported cable networks and Time Inc. At the Turner group, scatter pricing is up 20% over upfront levels, and domestic ad dollars at the entertainment networks were up more than 10%.

On an analysts call he noted that globally, the Turner networks, which range from TBS to CNN, produced ad revenues of $790 million, up 9%, the company said.

At Time Inc. which includes People and Sports Illustrated, advertising was up 5% globally in the first quarter ($401 million), for its strongest growth in more than two years.

Overall, Time Warner posted its strongest revenue growth since the second quarter of 2008, as revenues were up 5% to $6.3 billion versus the first quarter of 2009. Operating income rose 43% to $1.5 billion.

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Separately, Bewkes admitted the company is frustrated with massive ratings drops at CNN, but any combination with CBS News would not be driven by a need to boost financial performance at the news network.

"We're not happy with [CNN's] current ratings -- we're looking to fix that -- while remaining committed to non-partisan journalism," Bewkes said. There are some "possibilities" of a melding of CNN operations with CBS, though did not offer specifics. However, he said, "It's not because of a CNN issue, it's really because of imperatives at the broadcast news companies."

And, as broadcasters face financial pressures, that puts CNN in a favorable negotiating position, Bewkes added.

In the meantime, boosting ratings at CNN will come in lengthening viewer tune-in -- drop-ins rates are solid -- so programming has to be "more compelling," he said. But financially, CNN is a sturdy earnings producer and draws higher CPMs and affiliate fees than competitors.

By one measure, CNN prime-time ratings this season are down close to 60% among adults 25 to 54, though that does include some comparisons to 2008, when election coverage was popular.

Bewkes indicated Time Warner's massive deal to acquire NCAA tournament rights through 2024 came at a largely favorable price. High-profile programming is a "must-have" and "absolutely critical" in driving ad and affiliate dollars in the current landscape, he said.

NCAA tournament coverage will bring 65% of the games each year to three Turner networks for "what we consider to be a relatively modest annual cost, which is locked in over a very long period of time," Bewkes said. The company said the price tag will not have a material impact on its financial performance.

Games will be on TNT, TBS and TruTV, with several Final Fours on TBS. Turner and CBS combined to spend $10.8 billion for multiplatform NCAA rights over the next 14 years.

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