No Super Bowl, Radio Spin, Leaves CBS At A Q1 Loss


An additional NFL game and the presence of Super Bowl 50 on CBS-TV one year ago made a big difference for CBS Corp. in Q1.

So did a loss of political dollars, as the company swung to a net loss of $252 million (61 cents per share), from net income of $473 million ($1.02).

But, as the company explained, the CBS Radio tax-free Reverse Morris Trust-fueled merger with Entercom is a big culprit for this swing.

That’s because the Q1 net loss included a non-cash charge of $715 million in discontinued operations to establish a valuation allowance to adjust the carrying value of CBS Radio to the value indicated by the stock valuation of Entercom Communications Corp., the company said.

Net revenue was down to $3.34 billion, from $3.59 billion.

But, net earnings from continuing operations were up to $454 million ($1.09 per diluted share) in Q1, from $442 million (95 cents) in the year-ago period.

On a segment-by-segment basis, Local Media revenue fell to $409 million in Q1, from $448 million, due primarily to the loss of CBS’s telecast of Super Bowl 50, which in 2017 aired on FOX.

The impact of these items was partially offset by growth in retransmission revenues.

Local Media operating income dipped to $123 million, from $150 million in Q1 2016.

In prepared comments ahead of Thursday afternoon’s conference call with Wall Street analysts, CBS Corp. Chairman/CEO Les Moonves said retransmission consent and reverse compensation “led the way in Q1, growing 28%.”

This contributed to a 17% increase in CBS’s affiliate and subscription fee revenue, which also benefited from its over-the-top subscription services, CBS All Access and Showtime OTT.

In addition, CBS had a “very solid quarter for content licensing and distribution, which was up 16% and is poised for continued strength when several of our hit series enter the syndication cycle later this year.”

With Upfront Week less than two weeks away, Moonves touted CBS’s prime-time lineup and overall value for viewers and advertisers.

“As we continue to sharpen our core content focus in the quarters to come, including the impending split-off of our radio business, we will be even better positioned to take advantage of all of the opportunities before us,” Moonves said. “So there is so much yet to come, and our road map for success is clear.”