Both the cable networks and broadcast television posted increased revenues in Q3 for NBCUniversal, but higher programming costs and the lack of political revenues sent operating cash flow (OCF) lower. Parent Comcast reported that pro forma revenues were up 4.9% to $14.4 billion and OCF gained 3.2% to $4.6 billion.
NBCU revenues increased 4.6% to $5.2 billion. (Only the movie business saw a drop in revenues.) OCF, however, declined 9.3% to $951 million. Excluding the Olympics and acquisition-accounting revisions, OCF was down 1.4%.
Q3 revenue from the Broadcast Television segment increased 2.9% to $1.5 billion, reflecting higher content licensing revenue, partially offset by ratings pressure at the NBC broadcast network and lower political advertising at NBC owned local stations. The TV segment posted an OCF loss of $7 million, compared to positive OCF of $70 million in Q3 of 2010. The company said that reflected increased investment in primetime, news programming, and local stations, as well as acquisition-related accounting revisions totaling $24 million. Excluding these accounting revisions, Comcast said, Q3 2011 Broadcast Television OCF was $17 million compared to $70 million in last year’s third quarter
Asked about the cost of a new initiative to increase local news coverage at the O&O TV stations, company officials said the head count increase cost will be $20-30 million per year.
Comcast officials made it clear last year that the primary attraction in buying NBCU was its Cable Networks business. Q3 revenues for that segment increased 12% to $2.1 billion, driven by a 10.2% increase in distribution revenue, a 9.5% increase in advertising revenue and a 37.2% increase in “other” revenue primarily due to increases in the licensing of owned content from the cable production studio. OCF, however, decreased 2% to $751 million, reflecting increased investment in original programming and acquisition-related accounting revisions totaling $80 million. Excluding these accounting revisions, Cable Networks operating cash flow increased 8.5% to $831 million, the company said.
NBCU CEO Steve Burke, pictured, told analysts that advertising remains strong, although stronger on the national side than for local.