NBC Universal delivered the silver GE bullet of double-digit earnings growth in the fourth quarter and marked its fifth consecutive quarter of profit growth.
NBC U also logged strong full-year 2007 revenue and earnings, which were released Friday along with the rest of parent company General Electric’s fourth quarter and full-year results.
The key drivers of NBC U’s record revenue year were the cable nets and film unit. U’s film group logged its “best year ever,” as GE chief Jeff Immelt noted in the conglom’s earnings release, with $2.1 billion in global B.O. revenue.
The ’07 results underscore the transformation that NBC U prexy-CEO Jeff Zucker has been emphasizing ever since he took the reins in February 2007: namely, that the NBC broadcasting biz is now only a small portion of the overall picture at NBC U.
In large part, the 2007 growth was driven “by the tremendous performance of the cable division and the film groups, and they account for more than 75% of the company now,” Zucker told Daily Variety. “Every one of our cable networks has had record performance: USA, Sci Fi, Bravo, Oxygen, CNBC.
“There was so much attention to a new competitor coming in (with the debut of Fox Business Network), but the fact is CNBC had its highest ratings (in years) in the fourth quarter.”
MSNBC is also on the rise, pulling its largest share of the cable news aud since 2001, Zucker added.
All told, NBC Universal generated $15.4 billion in revenue in ’07, accounting for about 9% of GE’s total haul of $172.7 billion. NBC U’s earnings hit $3.5 billion, which repped about 10.7% of GE’s $29 billion in earnings (GE claims $3.1 billion of those NBC U earnings, while the rest flows to 20% shareholder Vivendi).
Zucker was quick to point out in an email message distributed to employees Friday that NBC Universal’s $3.5 billion in earnings repped a 6% gain from ’06, when the company was buoyed by the Winter Olympics, and an all-time high for the conglom since the 2004 marriage of NBC and Universal Studios.
For the fourth quarter, NBC U delivered 10% year-over-year growth in operating profit to $923 million, fueled by the film results and cable nets. International gains in those sectors were big contributors and will continue to be growth areas in the future. Last year, NBC U invested in expanding its film-production activities in overseas territories and launched a London-based TV studio operation.
“We had a very strong fourth quarter for our film groups: ‘American Gangster,’ ‘Charlie Wilson’s War,’ ‘Bourne Ultimatum’ and a strong international performance for those films as well as for ‘Atonement,’ ” said Zucker, who made a stop at the Sundance Film Festival this weekend before heading to London this week.On Tuesday, Zucker plans to hold his first global “town hall” webcast with NBC U’s 16,000 worldwide employees from London’s Royal Festival Hall.
As for the old-guard NBC, Zucker downplayed the impact of the 11-week-old writers strike on the net’s performance. The Peacock took the unusual, much-talked-about step of forking over $12 million in cash to advertisers as a result of ratings shortfalls in the fall, and it helped the net in the long run: It allowed NBC to sell the spots that otherwise would have been handed to advertisers as make-goods in the strong scatter market for higher rates than what the advertisers originally committed to in upfront sales.
It’s no secret that NBC U’s boss is often frustrated by the fact that public perception of the company’s overall perf is defined by the recent struggles of the broadcast web. Zucker sees the tide turning there, too, after a year of upheaval and management shakeups.
“There’s more momentum at NBC (Entertainment) in the first quarter than there’s been in several years,” Zucker said. “The performance of NBC’s primetime schedule in January has been encouraging. And it’s not just the unscripted programming that’s working well, but the scripted shows that we held back (for midseason): ‘Law & Order’ and ‘Medium.’ I think there’s a more positive feeling at the network than there has been in a long time. The NBC turnaround is the final piece of what has been a tremendous turnaround for NBC Universal.”