CBS Ad Revs Grow 2%

CBS has become the latest in a string of TV-media companies to report weak advertising revenues for the third-quarter reporting period.

CBS network advertising revenues declined 1% -- in a period that includes some higher-rated “Thursday Night Football” programming it didn’t have a year ago. Overall, company-wide advertising grew 2% to $1.55 billion.

Les Moonves, president/chief executive officer of CBS Corp, said during its earnings call that fourth-quarter scatter is picking up steam -- partly because of viewership declines on ad-supported cable networks.

“You do see in basic cable more of a decline across the board,” he says. “So our advertisers are telling us, obviously, that once again, to reach the broad marketplace, that we're still the best game in town. We're seeing scatter grow. [But] I can't quantify how much is moving to us.”



Analysts are watching -- along with many other TV broadcast and cable network groups -- to see how things will pan out for the rest of the season.

“As we look into 2015, we believe that there is a clear growth in retransmission and reverse compensation which will be needed to offer uncertainty in advertising and content syndication,” according to Michael Nathanson of MoffettNathanson Research.

Other analysts were a bit more optimistic: Brian Wieser, senior research analyst of Pivotal Research Group, says: “Considering the relatively weak state of national TV in the quarter, it was down only slightly year-over-year."

He adds: “Although CBS had certain advantages in the form of new programming and NFL content, getting close to flat was still a positive. We think that benefits from monetization of VOD-based viewing are beginning to help out, and the growing percentage of sales of advertising on a C7 basis will aid the company in the year ahead.”

CBS' entertainment revenue only nudged up 1.4% to $1.9 billion -- with TV revenues 0.8% higher to $1.7 billion and interactive sales up 8% to $172 million. Local broadcasting -- TV and radio -- grew 6.1% to $680 million. Cable revenues were up 5% to $624 million. Publishing revenues sank 11% to $199 million.

Total revenues grew 2% to $3.37 billion. Adjusted operating income was down 2% to $814 million, due to higher television NFL programming costs, as well as the launch of three new CBS TV series. Adjusted net income from continuing operations was down 7.2% to $400 million.

CBS now says advertising year-to-year represents 50% of its total revenue -- down from a 70% level of a few years ago.

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