Posted on 04/14/2006 4:59:33 AM PDT by HonduGOP
CHICAGO (AFX) - While its broadcast of the Winter Olympics gave NBC Universal a boost in first-quarter revenue, the cost of covering the Torino Games and a soft primetime TV schedule dragged on the unit's bottom line, making it the standout underperformer in parent General Electric's vast portfolio.
On Thursday, NBC Universal reported revenue of $4.5 billion in the period, a 24% bounce from year ago levels, with the Olympics contributing about $684 million. But that same event scraped about $96 million off NBC's operating profits, which fell 8% across the board. Taking out the Olympics, revenue would have been up 5% and operating profit 6%.
However, GE said that the Olympics are likely to be "slightly profitable" for the year when all the contributions from NBC affiliates come in.
The "Olympics performed as expected even though in the quarter it was a loss," said Chief Financial Officer Keith Sherin in a conference call. "That is how we had profiled the year and what we really thought we were going to have."
The company was more bullish on the next Summer Olympics, scheduled for 2008.
"The big megillah here is Beijing," said Chief Executive Jeff Immelt. "We have got a funnel of about $1.2 billion. I expect us to get maybe $800 million to $1 billion out of that."
Immelt said that Torino was "a tough venue, a tough set of dynamics" but the next round "is going to be a whole other story."
GE sees the Beijing games as key from a network standpoint in terms of viewer interest, and also from an infrastructure standpoint.
"I think it is going to be highly beneficial for both NBC and the rest the company," he said.
Tough times in prime time
The segment, which accounts for just 12% of GE's total revenue has also been having some rough sledding in prime time and the company is looking for revenue to be flat in the second quarter.
Season to date, NBC has only managed to put two programs - the new "Deal or No Deal" and "Law & Order: SVU" - into the top 20 prime-time programs, and those were ranked a miserable 15 and 17, respectively.
By contrast, CBS had 10 and Disney's ABC had 6. Like NBC, News Corp's Fox only has a pair -- but they are the top two.
"They face the difficulty that every network that that has been No. 1 faces," said Bill Carroll, vice president and director of programming at Katz Television Group, a unit of Clear Channel ."As successful shows mature, you are maintaining that success [instead of] getting the next big hit."
"When those shows go away, you are faced with several years of rebuilding."
Carroll said this fall will be a potential "game-changer" as NBC starts running National Football League games on Sunday nights.
That means it will only have to program six nights and also provides a "great promotional platform" for the rest of their schedule, Carroll added.
When it comes to Beijing 2008, he thinks it could be a winner for the Peacock Network but warned that the competitive landscape could be very tough.
At one time the other networks didn't even try to counter-program the Olympics, Carroll said, but not any more. This year, for instance, Fox and ABC threw some of the most potent shows they have up against the Games - and often beat them.
"And that is not going to change," he said. "Competing networks can't afford to lose whatever momentum they have."
...and the rats (Katie Couric) are abandoning the sinking ship!
Dinosaur Media Extinction Alert and Ping
I was just going to say that.
Qaty al-Khouriq
LMAO!!!!!!!!!!!!!!!
They made a profit off the Olymics? I know no one who watched it. Who cares about watching an event the next day when you already know the results?
Or Watching Bob Costas and Jim Lampley drone on and on, day after day.
NBC is doing with 'Deal or No Deal' what ABC did with 'Who Wants to Be a Millionaire'.
They are playing it so frequently that it will soon burn out.
ABC ran WW2BaM nearly every night, and some times, two hours in the same evening. It became too much and lost viewership.
They'll be shocked, shocked and not able to explain how come everyone THEY knew was SOOOO excited about the Chinese games....and noone in the USA watched. We are just too damn stupid and parochial for those NBC execs.....
More on this story from marketwatch.com
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B8C2D9CE5%2D08C0%2D4477%2D9913%2DC9BF916DD110%7D&siteid=mktw&dist=
BC universal underperforming for GE
By William Spain, MarketWatch
Last Update: 3:35 PM ET Apr 13, 2006
CHICAGO (MarketWatch) - While its broadcast of the Winter Olympics gave NBC Universal a boost in first-quarter revenue, the cost of covering the Torino Games and a soft primetime TV schedule dragged on the unit's bottom line, making it the standout underperformer in parent General Electric's vast portfolio.
On Thursday, NBC Universal reported revenue of $4.5 billion in the period, a 24% bounce from year ago levels, with the Olympics contributing about $684 million. But that same event scraped about $96 million off NBC's operating profits, which fell 8% across the board. Taking out the Olympics, revenue would have been up 5% and operating profit 6%.
However, GE (GE) said that the Olympics are likely to be "slightly profitable" for the year when all the contributions from NBC affiliates come in.
The "Olympics performed as expected even though in the quarter it was a loss," said Chief Financial Officer Keith Sherin in a conference call. "That is how we had profiled the year and what we really thought we were going to have."
The company was more bullish on the next Summer Olympics, scheduled for 2008.
"The big megillah here is Beijing," said Chief Executive Jeff Immelt. "We have got a funnel of about $1.2 billion. I expect us to get maybe $800 million to $1 billion out of that."
Immelt said that Torino was "a tough venue, a tough set of dynamics" but the next round "is going to be a whole other story."
GE sees the Beijing games as key from a network standpoint in terms of viewer interest, and also from an infrastructure standpoint.
"I think it is going to be highly beneficial for both NBC and the rest the company," he said.
Tough times in prime time
The segment, which accounts for just 12% of GE's total revenue has also been having some rough sledding in prime time and the company is looking for revenue to be flat in the second quarter.
Season to date, NBC has only managed to put two programs - the new "Deal or No Deal" and "Law & Order: SVU" - into the top 20 prime-time programs, and those were ranked a miserable 15 and 17, respectively.
By contrast, CBS (CBS) had 10 and Disney's (DIS) ABC had 6. Like NBC, News Corp's (NWS) Fox only has a pair -- but they are the top two.
"They face the difficulty that every network that that has been No. 1 faces," said Bill Carroll, vice president and director of programming at Katz Television Group, a unit of Clear Channel (CCU) ."As successful shows mature, you are maintaining that success [instead of] getting the next big hit."
"When those shows go away, you are faced with several years of rebuilding."
Carroll said this fall will be a potential "game-changer" as NBC starts running National Football League games on Sunday nights.
That means it will only have to program six nights and also provides a "great promotional platform" for the rest of their schedule, Carroll added.
When it comes to Beijing 2008, he thinks it could be a winner for the Peacock Network but warned that the competitive landscape could be very tough.
At one time the other networks didn't even try to counter-program the Olympics, Carroll said, but not any more. This year, for instance, Fox and ABC threw some of the most potent shows they have up against the Games - and often beat them.
"And that is not going to change," he said. "Competing networks can't afford to lose whatever momentum they have."
William Spain is a MarketWatch staff writer in Chicago.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.