Fees help drive Eye's strong Q4 and full-year earnings
CBS Corp. CEO Leslie Moonves has been fighting for years to turn the Eye into a dual-revenue stream business. It looks like he’s got what he wanted. Moonves said Wednesday CBS exceeded its revenue target last year of $100 million for retrans fees by “a wide margin.” He would not disclose the total.He added the company is on track to bring in $250 million in annual retrans fees by the end of 2012. In reporting strong financial results for the fourth quarter and full-year 2010, CBS said its revenues in the quarter were up 11% to $3.9 billion, and net profits grew more than fourfold to $283 million. For the full year, revenues were up 8% to $14 billion. Net profits rose 219% to $724 million. CBS chairman Sumner Redstone declared the numbers “nothing less than sensational.” Ad revenues were up 12% in the quarter, given a boost from political spots. Licensing and distrib revenues rose 21%, in part, because of the second cycle syndication sale of “CSI.” Entertainment revenues grew in 2010 by 6% to $7.4 billion, due to higher ad sales at the network, helped by the Super Bowl telecast last year and by the NCAA basketball tourney coverage. Ad revenues at the network itself were up 8% last year. Pricing in the scatter market was 40% higher than upfront prices. Moonves said he expects “very little change” to the prime time lineup at CBS next year, largely because he feels such new shows as “Mike & Molly” and “Hawaii Five-0” have been a success. “That will mean reduced costs for development,” he added. Cable nets’ revenue was up 9% last year to $1.48 billion, helped by higher rates and subscriber growth for Showtime (to 20 million) and the CBS College Sports Network, re-branded this week to be the CBS Sports Network. Revenues at the Eye’s Simon & Schuster publishing business dipped slightly in 2010 to $791 million because of softer retail sales. However, sales of e-books were up 160% in 2010. For local broadcasting, at CBS’ TV and radio stations, revenues grew 18% last year to $2.36 billion. and at its outdoor unit, by 6% to $1.82 billion. Moonves said he was encouraged by the results at CBS Films where, he added, its latest release “The Mechanic” will be profitable. However, Moonves said, “we are slowly going into this business. We released four small films so far. We have our toe in the water. We like where we are now.” When asked whether he could see CBS doing more deals with distributors like Netflix and Amazon, Moonves stuck to his position of being judicious about online video deals. He said advertising and syndication remain the priorities because they represents billions of dollars to CBS. However, he did say as the owner of the largest TV library in the world “we will make some of these deals.” Free cash flow grew 75% to $1.45 billion.Executives projected that revenues for the first quarter of this year would be down, compared to tough comparisons to 2010, which got a big boost in the period from the Super Bowl. What’s more, CBS will be broadcasting fewer NCAA basketball games because of new partnership to share coverage with Turner Sports.