Viacom profit plummets 71% as ad, affiliate revenues dip

Bob Bakish
Viacom's new CEO Bob Bakish will take over on Nov. 15. Image: Viacom

Viacom today announced its fiscal fourth-quarter earnings which were marred by a steep decline in net profit.

The media company’s revenues for the quarter fell 15 percent to $3.2 billion, a drop that led to a sharp 71 percent decline in both profits and earnings per share ($252 million and 63 cents respectively).

The revenue decline was fronted by Viacom’s Media Networks division, which saw its revenues fall 11 percent to $2.48 billion, a drop the programmer attributed to declines in affiliate and advertising revenues. Domestic advertising revenues fell 8 percent because of lower television ratings at some networks, and worldwide advertising revenues also fell 8 percent.

At the same time, domestic and worldwide affiliate revenues decreased 19 percent and 16 percent, respectively, which Viacom said was due to “significantly” higher revenues from SVOD arrangements in the year-ago quarter. However, international affiliate revenues increased 7 percent (15 percent if foreign exchange impact is excluded). Viacom said the boost came from new channel launches, increased subscribers, rate increases and the completion of certain SVOD and other OTT arrangements.

In a statement, Viacom interim president and CEO Tom Dooley, said the company ended the 2016 fiscal year “well into our transition,” pointing to the growth of Viacom’s data program, stabilized ratings and ongoing rebuild at Paramount.

“In addition, our international media networks business is stronger than ever, and we will continue to broaden our footprint and apply our successful strategies to additional territories in attractive markets,” Dooley said. “With new leadership across the company, continued investments in new content, technologies and targeted acquisitions, and an expanded Board of Directors, I have great confidence in Viacom’s next phase, as the company explores the exciting possibilities ahead."

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Viacom, which operates networks including Nickelodeon, Comedy Central, MTV, VH1, Spike, BET, CMT, and Nick Jr., is currently exploring a re-merger with CBS. Reports have suggested that a deal could be in place by Thanksgiving.

In the meantime, Viacom is getting ready to usher in a management shift when new president and CEO Bob Bakish takes the reins on Nov. 15.