NEW YORK — CBS’ Mel Karmazin lived up to his rave notices Thursday by announcing a first-quarter profit of $19 million for the media conglomerate — compared with a loss in the year-earlier quarter of $151 million — as the turnaround at the Eye that began selectively a quarter ago reached all segments.
Even the network, rumored to have been a potential spin-off as recently as last month, earned $52 million in earnings before interest, taxes, depreciation and amortization (cash flow), a reversal from its cash flow loss of $46 million a year ago.
Cash flow up
Meanwhile, CBS’ overall cash flow increased three-fold during the quarter to $271 million, while revenues rose 47% to $1.95 billion.
CBS’ television station group boosted cash flow 94% to $130 million on 49% higher revenue of $263 million in what was its fifth consecutive quarter of double-digit growth in revenues and cash flow, a performance one analyst called “extraordinary.” The stronger performance at both the network and station group benefited from CBS’ first-quarter Olympic broadcast, the company said.
As CBS told analysts, however, same-station sales would have been up more than 10% even without the Olympics. “This puts them in the top end of all TV station groups,” one analyst said.
The radio group, which includes CBS’ outdoor division, also outperformed the industry. Although sales grew at a more modest 5.4%, the radio group’s cash flow jumped 24.2% to total $113 million.
155% sales increase
CBS’ cable group turned in a dramatic increase as well, with sales rising 155% to $125 million. Even adjusted to include recent acquisitions the Nashville Network and Country Music Television on a year-to-year basis, the revenue gain was a still-respectable 14%.
Karmazin, whose April promotion to CBS president and chief operating officer came less than a year after he expanded his control of the radio station group to include TV stations, summed up the report by crowing that the TV station group had “record operating results, with each of the divisions, radio, outdoor and television, contributing to the results.”
He has been an investor favorite since selling his Infinity Broadcasting Co. to the Eye in 1996, then joining his acquisitor. His influence is now such that a participant in Thursday’s analyst call joked: “Nobody had the courage to ask if (CBS chairman and CEO) Michael Jordan still had a real job.”
Looking ahead, CBS told analysts it was especially pleased that scatter prices for the National Football League games it will begin broadcasting next season are selling at a premium to the upfront prices being commanded by other broadcast networks.
The $4 billion CBS paid to yank broadcast rights away from NBC initially raised eyebrows because the eight-year deal more than doubled the $217 million per-season price that NBC had paid.