Viacom reported first-quarter earnings of $710.5 million on revenue of $6.77 billion, compared with earnings of $443.1 million on $6.05 billion revenue for the same period a year earlier. Viacom said it experienced a 21% gain in ad revenues, led by 24% growth in cable networks, 38% in TV and 55% in entertainment. Chmn. Sumner Redstone said the results put the company on track for “another record year.” Fulcrum Global Partners analyst Richard Greenfield called the results “blowout” numbers. Revenues for the TV segment, which includes CBS and UPN networks and stations, increased 18% to $2.3 billion. Much of the increase in ad revenues was attributed to the telecast of the Super Bowl, the NCAA Men’s Basketball Championship, as well as CBS’s primetime lineup. Higher syndication revenues reflected increases for “Everybody Loves Raymond” and higher barter revenues for “The Oprah Winfrey Show” and “The Dr. Phil Show.”
Rogers Communications lost more than $64.7 million on $1.26 billion in revenue in the quarter ended March 31. That compared with earnings of more than $23.7 million on revenue of $1.11 billion in the same period a year before, the firm said. The company attributed the loss to a $161.1 million in expenses that were “principally a loss on foreign exchange on U.S. dollar denominated debt.” The company said it also had a loss on repayment of long-term debt. The company changed its accounting policy of expensing the value of employee stock options, increasing its operating expenses by $3 million. During the quarter, the company had an increase of 38,000 Internet subscribers and 27,900 digital cable households. Rogers lost 3,400 basic subscribers.
FCC Office of Engineering & Technology (OET) Chief Edmond Thomas told a New America Foundation (NAF) conference Fri. that OET was working on a proposal that may win support among broadcasters reluctant to see unused TV spectrum given up for unlicensed use. Thomas disclosed few details, saying the proposal hasn’t been vetted by broadcasters but would be soon. Thomas said he expected a proposal on possible unlicensed use of “white spaces” in TV broadcast spectrum in the next few months and an order by year-end.
The FCC waived for certain ILECs a rule that limits the period over which local number portability (LNP) costs may be recovered. The Commission, however, decided Tues. not to extend the waiver to allow additional end-user recovery for costs linked to future intermodal LNP requirements. Comrs. Copps and Adelstein issued separate statements voicing concern about the need for cost support data linked to additional LNP cost recovery.
Vodafone Sweden said it lowered its mobile data traffic prices, following the successful launch of its new 3G datacard in Feb. It said the prices on the 50 MB and 150 MB data packages had been reduced to $36.62 per month and $73.25 per month respectively, meaning that the price per incoming/outgoing MB in the largest data package was reduced 38% to 49 cents.
Equal employment opportunity supporters opposed in part a petition for reconsideration by 43 state broadcast associations, which claims FCC EEO compliance is too time consuming. The associations, acting through STBA, claimed that the new FCC EEO rules would require them to hire one or 2 full-time people and create huge lists of referral organizations to send job notices. But David Honig, exec. dir. of the Minority Media & Telecom Council, in his petition on behalf of the EEO supporters, noted that most of the FCC’s required tasks already must be performed by broadcast stations. The new FCC EEO regulations would require 38 min. of a typical broadcaster’s time, Honig estimated, based on a study done with a former EEOC compliance dir. EEO supporters agreed with FCC’s plan to monitor the effectiveness of using the Internet as a recruitment source.
Annual spending on national network cable TV ads rose to a new high of $12.7 billion in 2003, up 16.7% from 2002, according to the Cable Ad Bureau (CAB). The additional $1.82 billion accounted for 2/3 of the combined gains of all sources of national TV revenue -- cable, broadcast and syndication, CAB said. Cable’s share of national TV ad spending was 34.1%, up from 31.5% in 2002, while the broadcast share slipped to 56.8% from 60% the year before, CAB said. Syndication’s share rose to 9.1% from 8.5%, CAB said. Procter & Gamble had the largest increase in cable TV ad spending among individual advertisers, up $128.3 million from 2002. Pharmaceutical maker Novartis posted the largest percentage increase in cable outlays, 158%, as its annual spending rose to $98.2 million from $38 million the year before.
Daystar TV, whose bid for KOCE-TV (Ch. 50) Huntington Beach, Cal., was rejected in favor of the KOCE Foundation, filed suit Wed. to halt the sale (CD Oct 20 p12). The religious broadcaster accused the station’s licensee, the Coast Community College Dist. (CCCD), of failing to comply with state law and sell the station to the highest bidder. Daystar said in its lawsuit filed in Orange County Superior Court it had first offered $25.1 million ($1 million cash down and $24 million at closing) for the station Oct. 8, vs. the KOCE Foundation offer of $32 million ($8 million down from borrowed funds and $24 million financed over 10 years). Daystar said it had submitted a revised bid the next day for $40 million ($2 million cash down and $38 million at closing), but the board chose the foundation offer over its higher offer in Dec. KOCE sources told us the higher offer was disqualified because it was submitted after the deadline. Later, without re-noticing the sale or giving bidders an opportunity to resubmit a purchase proposal, the board and the foundation agreed to reduce the foundation’s purchase offer to $28 million ($25.5 million in cash over time and $2.5 million in programming). Under the revised offer, the foundation was required to pay only $7.9 million at closing and a $17.5 million promissory note payable over 30 years. Daystar attorney Richard Sherman said his “client was and is the highest responsible bidder for KOCE.” The foundation offer with a 30-year payment schedule doesn’t meet CCCD’s immediate cash needs, and, “in today dollars, is only worth $23 million at a conservative 4% discount rate. Calculated at an 8% discount rate, the foundation’s bid is worth only $19.2 million.” The presence of as many as 4 religious broadcasters in the bidding aroused strong passions among public broadcasters last Oct., with the Assn. of Public TV Stations (APTS) and the CPB intervening to ensure that KOCE remained in the public domain. APTS and CPB had warned that the sale to any entity other than a public broadcaster would have adverse consequences in Congress and at the FCC. CPB had written to the licensee that it would have to return federal funds invested by Congress through the CPB amounting to $22 million as well as Public Telecom Facilities Fund grants made by the NTIA over the years.
Cingular Wireless CEO Stan Sigman said Tues. he would make a regulatory pitch that a $41-billion takeover of AT&T Wireless could be approved without divestitures. But analysts predicted regulators may require shedding of assets in at least some markets for a deal that would create the largest U.S. carrier. Consumers Union promptly denounced the plan, saying it comes at a time when service quality is already a problem industrywide.
Cox reported a loss of almost $11.3 million on $1.5 billion revenue in the quarter ended Dec. 31, reversing a $179.6 million profit on $1.34 billion revenue a year earlier. It blamed the loss on heavier expenses in trials of new video and voice projects, as well as labor costs and losses on investments. For all of 2003, Cox narrowed its loss to $137.8 million from a loss of $274 million in 2002. It ended 2003 with 6.3 million subscribers to basic video, flat from a year ago; 2.1 million to digital cable, up 20%; 2 million Internet, up 41%; and almost 1 million telephone, up 38%.