Comcast Corp. (CMCSA), the U.S. cable company that took control of NBC Universal in January, will likely have to spend “a number of years” turning around the unit’s broadcast business, said Comcast Executive Vice President Stephen Burke.
Comcast will try to boost ratings and revenue for NBC, which has lost ground against rivals such as CBS Corp. (CBS) and News Corp. (NWSA)’s Fox. Comcast said yesterday that broadcast television revenue fell to $1.35 billion in the first quarter from $2.08 billion a year earlier, when results included the Olympics.
“We are under-performing relative to the other three of the big four dramatically, hundreds of millions of dollars worse that the other three,” said Burke, who is also chief executive officer of NBC Universal, in a conference call today.
The Philadelphia-based company plans to spend $200 million more on new broadcast shows this year and $100 million more on new cable shows, said Burke during the call.
“We look at that as a tremendous opportunity,” said Burke. “It is a very tough business to turn around, and I think it is likely to take us a number of years. But when we do, going from fourth to third would be hundreds of millions of dollars.”
Comcast fell 65 cents to $25.96 at 4 p.m. in Nasdaq Stock Market trading. Shares have risen 18 percent this year.
The Philadelphia-based company yesterday reported an increase in first-quarter revenue and profit with the addition of broadband subscribers and the completion of a deal for control of NBC Universal. Revenue rose to $12.1 billion, from $9.2 billion a year ago, when it didn’t control NBC Universal.
‘Work to Be Done’
Comcast closed on its purchase of 51 percent of NBC Universal from General Electric Co. in January. GE still owns the remaining 49 percent.
NBC Universal made up about 30 percent of Comcast’s revenue for the quarter. NBC’s revenue was $4.35 billion compared with $4.92 billion a year ago. Excluding the Olympics, which brought in $782 million in the first quarter of 2010, NBC revenue rose 5.2 percent.
“If there’s anything that came out today on the financials, it’s that there’s still a lot more work to be done on the NBC broadcast network,” said Vijay Jayant, an analyst at Citadel Securities LLC in New York, who has a “strong buy” rating on Comcast shares.
NBC trails CBS, Fox and Walt Disney Co.’s ABC in primetime ratings this television season, according to the market research firm Nielsen Co. Comcast is spending more on primetime programming this year to replace “The Jay Leno Show” at 10 p.m., which was canceled last year.
Revenue from cable networks, which include MSNBC, Bravo, E!, and Versus, rose 13 percent to $2.02 billion in the first quarter. Ratings increased for nearly all cable stations, said Tom Eagan, an analyst at Collins Stewart LLC in New York.
Comcast added 639,000 new Internet, video and voice subscribers, an 8.3 percent increase from a year earlier, the company said in a statement yesterday. Net income was $943 million, or 34 cents a share, compared with $866 million, or 31 cents, a year earlier.
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