CBS Sees Q1 Super Bowl Bump
CBS' broadcast network saw a 25% increase in advertising revenue in the first quarter, thanks to strong scatter pricing and its broadcast of the Super Bowl in the quarter to March 31.
Excluding the Super Bowl, advertising revenue would have been up in the high single digits, according to CBS management speaking on the company's earnings call May 5.
When asked by an analyst to confirm that Super Bowl ad sales were $170 million, company management declined to give specifics but confirmed that the event was "low margin profitable."
Overall ad revenue at CBS Corp., which also owns a billboard company and radio stations, rose to $2.381 billion, up from $2.028 billion in the year ago period. CBS is particularly buoyed by the improving ad environment since 65% of the company's revenue is derived from advertising.
The company's entertainment division, which includes the network, CBS TV studios, the distribution business and CBS Interactive, reported a 15% uptick in sales, to $2.08 billion. Sales at the Cable Networks unit, which houses Showtime and CBS College Sports Network, were up 8%, to $368 million.
CBS Television Station revenues increased 29%, to $323.7 million. Local Broadcasting ad revenue was up 19%, to $605.5 million.
CBS also reported that scatter pricing in the second quarter, while still significantly above upfront pricing in the 20%, was down slightly from 30% in the first quarter. Though the company is still expecting a good performance during the upcoming TV upfront presentations, which begin May 17 (click here for complete upfront coverage).
CBS Corp. CEO Leslie Moonves said the company was not in the market for major acquisitions but would look to sell TV and radio stations in smaller markets as the M&A climate improved.
When asked to discuss the company's online video model, which is pegged to its TV.com property (CBS is not a partner in rival broadcast network owned Hulu), Moonves responded, "We own 100% [of the ad revenue on TV.com], which is better than only owning 70%. I don't know what the numbers are with Hulu; it's clear they'll be getting a subscription model, but I don't know how effective it is." He added, "There is some dissatisfaction with the partners."
News Corp., a part-owner in Hulu, outlined plans for a new subscription driven entertainment venture on its May 4 earnings call that would involve more than just print. The company could opt to make more of its TV and film content via subscriptions and has been talking to Apple about its iPad product.
CBS Interactive recorded a 19% increase in display ad revenue thanks to sports programming such as March Madness on Demand.
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