During the quarter that parent General Electric (NYSE: GE) agreed to sell a majority stake in NBC Universal to Comcast (NSDQ: CMCSA), the network’s profits dropped 28 percent to $602 million. Though only a footnote in GE’s wider earnings, NBC is in the spotlight as investors await the long process of the company’s transfer to its new owner. Additionally, the late night TV drama between hosts Jay Leno and Conan O’Brien have only served to highlight the broadcast side’s continued troubles.
Aside from the steep fall in profits down to to $602 million, revenues declined 3.7 percent to $4.2 billion. For the past few years, NBCU’s earnings have been dragged down by the broadcast side while cable has tended to be stronger. But this time out, GE chairman and CEO Jeff Immelt laid much of the blame on NBCU’s film and related DVD business, which was down by $200 million due to a lack of theatrical and home video hits.
While some analysts have speculated that one of the four major TV broadcasters would become a full cable operation within the next two years, Comcast has dismissed the notion of bringing all of NBC’s programming to the cable side. Immelt briefly mentioned the Comcast sale, saying that they are currently working through the regulatory process.
Turning to the specifics of the broadcast/cable divide, NBCU’s cable revenues were up 8 percent, with USA Network having the most success, which was buttressed by improvements at the smaller properties, Bravo and Oxygen, both of which grew more than 20 percent. Broadcast was down just 1.2 percent. “Everyone’s aware of what’s going on with late night and NBC’s attempts to reset the Olympics, so there’s really not much I can add there,” Immelt told investors during the earnings call. More to come