NBC is a fixer-upper, to be sure, but Comcast executives say the ad market in 2010 and now in 2011 has been better than they had modeled when acquiring control of NBCUniversal from GE, so they are bullish in the long term on the television business. But as they commented on Q1 results, they were careful to emphasize the long term nature of the turnaround.
“On the broadcast front we are working toward a long-term turnaround – and we need to be patient. We have a new, energized management team which is off to a great start. I’m optimistic about our prospects, but I’m also realistic, knowing that it’s going to take some time to return NBC to industry level performance,” said Comcast CEO Brian Roberts, pictured.
He noted the recent premiere of “The Voice” as “maybe the most exciting event for NBCUniversal this year.” In addition to being a ratings success, “The Voice demonstrated what can be accomplished when every one of NBC’s properties and the digital assets and Comcast Cable come together to support a program,” Roberts said.
Comcast is planning to invest $300 million more in NBCU this year, primarily to acquire primetime programming for NBC.
“We think the broadcast business has tremendous upside,” NBCU CEO Steve Burke told analysts in the Q&A session, noting that NBC is dramatically underperforming the other three of the Big Four networks – underperforming by hundreds of millions of dollars on both the network side and at the O&O stations. “And we look at that as a tremendous opportunity. You want to always soften that optimism by the realization that it is a very tough business to turn around and I think it is likely to take us a number of years to turn it around, but when we do going from 4th to 3rd would be hundreds of millions of dollars of swing, positive swing in terms of EBITDA, so that is obviously a very high priority,” the new NBCU boss said.
Burke also commented on sports rights costs, emphasizing that NBCU is in business to make money. He says the Olympics and the NFL are “fantastic” and he wants to keep them, but the deals have to make financial sense. He noted, though, that multi-platform rights deals can provide NBCU with more ways to bring in revenues than just the ad revenues associated with NBC Network broadcasts.
RBR-TVBR observation: Deep pockets and new ideas. Those are probably what NBC needs most right now. Fortunately, Comcast appears to have both.