CBS revenues sink due to fewer NFL Thursday Night Football games

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CBS today announced its fourth-quarter results including revenue of $3.52 billion, down from $3.59 billion in the year-ago quarter.

The broadcaster blamed the dip on tough comps because of a “significant international licensing agreement” for Showtime last year as well as airing three fewer Thursday Night Football games this quarter.

Still, affiliate and subscription fee revenues rose 13%, which CBS attributed to growth in retransmission revenues, fees from CBS Television Network affiliated stations, and digital distribution services. But, advertising revenues decreased 3%, also falling victim to fewer Thursday Night Football games as well as NFL lower ratings overall. The dip in ad revenue was offset somewhat by political spending at CBS’s local television stations.

CBS’s quarterly operating income also dropped, down to $484 million from $770 million in the year-ago quarter. The broadcaster said the difference was due in part to a one-time pension settlement charge in the fourth quarter of 2016 and a gain from the sale of an internet business in China in the fourth quarter of 2015.

Despite the dip, CBS said adjusted operating income rose to $733 million, up 10% annually from $664 million.

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Broken down, CBS’s entertainment revenues fell to $2.39 billion, down 3% annually from $2.46 billion. But affiliate and subscription fees for the segment rose 28% during the quarter due to higher station affiliation fees and subscription growth at CBS All Access. That helped entertainment operating income climb 7% to $371 million.

CBS cable networks revenues were also down, reaching $501 million during the quarter, compared to $562 million one year ago. CBS said growth from the Showtime digital streaming subscription offering partially offset this decline.

Cable Networks operating income was $219 million for the fourth quarter of 2016 compared with $228 million for the same prior-year period, primarily reflecting the lower revenues, which was offset by lower programming costs.

While the entertainment and cable networks groups slipped slightly, CBS’s local media revenues climbed 16% to $526 million during the quarter thanks to record political advertising sales from federal and state elections and 9% growth in retransmission and subscription revenues. The revenue rise helped the segment’s operating income rise 45% to $216 million.

Despite a somewhat down fourth quarter, CBS CEO Les Moonves cheered his company’s solid full-year results.

"2016 was a phenomenal year for the CBS Corporation, with all-time highs in revenue, operating income, and EPS that came in above $4 for the first time in our Company's history; and as we begin 2017, I couldn't be more excited about our growth prospects in the years ahead," said Moonves in a statement. "We are already exceeding our projections to generate billions of dollars in incremental revenue, thanks to our new, fast-growing revenue sources and the strength of our base business.”