Pix unit revs soar as USA beats forecasts
NEW YORK — Barry Diller’s USA Networks Inc. posted a slimmer than expected $18.9 million quarterly loss Thursday from a $1.3 million profit the year before, which included a hefty one-time gain on the sale of securities.
Investments in emerging businesses, like top-ranked local online service CitySearch, also contributed to the red ink. Diller noted that the recent volatility of financial markets, which pummeled many tech stocks, has created some interesting buying opportunities USA might explore.
Revenue jumped 26% to just over $1 billion — the first time it’s hit the $1 billion mark — and cash flow was up 28% to $184 million, fueled by cable networks (USA, Sci-Fi), e-commerce, film and the group’s other diverse assets. Diller said during a conference call that USA has all but completed the purchase of a small cable network that he hopes to transform into another big cable player by spending heavily on programming.
The booming report boosted USA’s stock 11% to $22.56.
Filmed entertainment revenue soared to $30 million from $6.7 million. “I think film is doing well, doing satisfactory at this moment. The real work for USA (Films) is the creative work for the following year. For us, this year was already set. … It takes a year or two to get a group of films together than define your company.”
Division, created mainly through the purchase from Seagram of October Films and Gramercy Pictures less than a year ago, was behind “Being John Malkovich” and “Topsy-Turvy.” First quarter results also included the theatrical release of “Pitch Black” and “Agnes Browne,” broadcast net release of “The Game” and vid releases of “The Muse” and “Super Bowl 2000.”
At USA Network, cash flow rose 37% to $97 million. Among its key offerings is professional wrestling, and the net’s parent company is currently in litigation with the World Wrestling Federation in an attempt to hang on to the programming against a counteroffer by Viacom/CBS. Diller said an injunctive hearing is scheduled for June 12. USA has the right to match any other offer and insists it did so for wrestling, although Viacom/CBS offered a number of perks, including prime television placement for WWF’s new football league games.
“We have first refusal rights. CBS and Viacom figured out a way … to put together a package that abrogated our fist refusal right. We said we accept the terms and conditions relative to the wrestling portion,” Diller said.
Other highlights of the quarter:
- Networks and studios: Revenue rose 14.3% to $379 million.
- Electronic retailing/Home Shopping Network: Revenue (domestic) rose 17.5% to $322 million. (Internationally, it rose 51% to $57 million).
- Ticketing operations/Ticketmaster: Revenue rose 9.9% to $98.4 million. (Online ticketing revenue jumped to nearly $30 million from $10.2 million).
- Hotel Reservations Network: Revenue rose 55% to $141 million.
- Broadcasting: Revenue rose to $3.6 million from $900,000. Company said USA Broadcasting will launch its fourth lo-cally formatted TV station in Boston in July and expects to be in six markets by the end of the year.