‘Phenomenal’ Q1 For CBS, Driven By Retrans Fees


“CBS’s phenomenal first-quarter results once again affirm that we have the right strategy to successfully monetize our premium content now and in the future.”

That’s the key statement offered by CBS Corp. Chairman/CEO Leslie Moonves, in discussing his company’s first-quarter revenue results. Record revenue. All-time quarterly highs. 

But, the big revenue driver for CBS wasn’t advertising. It was neither content licensing and distribution revenue, nor affiliate and subscription fees. CBS’s Q1 revenue increase of 13%, to $3.76 billion, was fueled by a 25% jump in higher retransmission revenues and fees from its affiliates.

By segment, the Entertainment division saw revenues jump to $2.7 billion, from $2.4 billion. The cable networks were up to $609 million, from $543 million. Local media (a.k.a. CBS O&Os) saw its revenue inch ahead to $415 million, from $409 million.

Ad revenue increased to $1.73 billion, from $1.6 billion. Affiliate and subscription fees grew 39%, driven by higher station affiliation fees and growth from digital initiatives, including CBS All Access and “skinny bundles.”

The increases helped CBS in achieving adjusted net earnings of $518 million, rising 17% from $441 million.

Adjusted diluted EPS grew to $1.34 from $1.06. Analysts polled by Thomson Reuters had forecast earnings of $1.19 a share.

In after-hours trading, CBS investors reacted positively. As of 7:54pm Eastern CBS shares were up 2.2%, to $49.80.

With Friday’s Closing Bell, CBS experienced an impressive 9% gain, closing at $53.17 — its best close since April 4.

With CBS flying high, what does this mean for Viacom, and a possible reunification of the two companies? Moonves wouldn’t talk about the negotiations on his company’s quarterly earnings call with financial analysts.