CBS Corporation’s revenues for the third quarter of 2017 increased 3 percent to $3.17 billion from the year-ago period, with a nice lift in affiliate and subscription fee revenues thanks in part to Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event.
Revenues were also helped by a 27-percent gain in retransmission revenues and fees from CBS Television Network affiliated stations, and growth from new digital initiatives, including the company’s owned streaming subscription services. Content licensing and distribution revenues were down 22 percent, mainly due to the timing of domestic TV licensing sales. Ad revenues decreased 5 percent, primarily from lower political advertising sales.
Operating income was down 2 percent to $707 million, facing a tough comparison with Q3 2016, which included a larger volume of higher-margin political advertising and TV licensing sales. Net earnings for the third quarter were $592 million, up from $478 million for the same quarter last year.
Entertainment revenues of $1.82 billion were down 7 percent from the same prior-year period. Entertainment operating income of $345 million was down 1 percent.
Cable Networks revenues increased 40 percent to $840 million, seeing gains from the Floyd Mayweather/Conor McGregor pay-per-view boxing event as well as growth from the Showtime digital streaming subscription offering. Cable Networks operating income of $294 million was up 3 percent.
“Our solid third-quarter results demonstrate the way we are shifting our business to capitalize on changing viewing habits,” said Leslie Moonves, the chairman and CEO of CBS Corporation. “To that point, during the quarter we saw dramatic growth in our affiliate and subscription fees, including revenue from traditional and skinny bundles as well as over-the-top viewing. Today we have more subscribers at CBS and at Showtime than we did a year ago, and best of all, newer digital platforms are resulting in more revenue per subscriber than traditional ones. So not only are we growing our subs, but we are growing our rates as well. Our over-the-top services had a particularly strong third quarter, thanks to the exciting launch of Star Trek: Discovery on CBS All Access and the Floyd Mayweather/Conor McGregor pay-per-view event on Showtime. Of course, premium content is also driving our success at the CBS Television Network, where we are once again number one this season, with two of the top three new shows, including Young Sheldon, which premiered as the number one show on television overall. In addition, for the first time, the majority of our upfront deals this fall are based on viewing over a seven day-period, which means that we are now beginning to monetize millions of viewers we were not getting credit for a year ago. So from our new OTT services to the monetization of delayed viewing, and from our burgeoning international business to rapid increases in retrans and reverse comp, we are just beginning to capitalize on significant growth areas for the future.”