NBC Universal CEO Steve Burke said his division's broadcast network is set to take in $500 million in broadcast retransmission fees from pay-TV operators this year.
"That's very good for NBC Universal, but not so good for [Comcast Cable CEO] Neil Smit and the cable business," said Burke, speaking at the Bank of America Merrill Lynch Investor Conference in New York.
The comments illustrate the tight rope walked by Burke, who also has the title of senior executive VP for Comcast Corp (NASDAQ: CMCSA).
Unlike his network's leading competitors, 21st Century Fox, ABC/Walt Disney Co. and CBS Corp., NBCU is tied to a leading pay-TV operator.
"We're nicely hedged," Burke told his interviewer, high-profile Merrill Lynch analyst Jessica Reif Cohen. "Our [retrans] fees are lower than ABC, CBS and Fox."
As the No. 1 ranked network in adults 18-49 two seasons running, Burke added, "We should argue that we should get as much as ABC, Fox and CBS. I know you'll see that $500 million go up over time."
In the wide-ranging interview, Burke dismissed investor panic over cord cutting, which saw steep declines in media and pay-TV stocks a month after several notable second-quarter earnings reports.
"Nothing different is happening in the last month that wasn't happening a year ago," Burke said, noting his comments during Comcast's first-quarter earnings report.
"We said that given the trend in ratings, it's unlikely that ratings would grow over the next five years as they did the last five years. The good news is that people are watching more video than ever, they're just watching in places that many times aren't rated or monetized. The cable distribution business is tougher today than it was 10 years ago, but it's still a very good business. You look back 15 years ago, satellite was going to put cable out of business. Cable has survived satellite, the two biggest telephone companies coming into the business and the Internet."
Meanwhile, commenting on NBCU's thriving networks, film and theme park operations, Burke noted that free cash flow has doubled from the $3.2 billion it stood at when Comcast purchased NBCU five years ago.
He attributes much of this success to a culture in which executive decision-makers "know that they work for NBC Universal first, not Bravo or USA Network."
"You have to develop a culture in which Chris McCumber, who runs USA Network, knows that if he gives up [commercial] spots to promote Jurassic World, he knows that he'll get them back [from other NBCU units] when it comes time to promote [USA series] Mr. Robot."
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