CBS reported lower profits in the fourth quarter because of big payments to the NFL for Thursday Night Football offset gains in advertising revenue.
Net earnings fell to $402 million, or 79 cents a share in the quarter, from $422 million, or 76 cents a share, a year ago.
Second quarter net revenues were up 3% to $3.68 billion. Ad revenues were up 4%, thanks in part to Thursday Night Football and political advertising on local stations.
“This was a very strong quarter with growth in both revenue and EPS, and at the heart of it all is the increased demand for our content,” CEO Leslie Moonves said in a statement.
“It all starts with the CBS Television Network, which remains No. 1 and is growing its audience from year to year. With a balanced schedule of new and established hits, the return of Thursday Night Football next fall, and Super Bowl 50 on CBS in 2016, we are continuing to build momentum from a position of strength. As a result, affiliate fees are growing at a rapid clip. During the quarter, we made significant progress in retransmission consent and reverse compensation by completing another round of new deals, each time at higher rates that place fair value on our content,” Moonves said.
Operating income for CBS’s Entertainment unit, which includes the CBS broadcast network and CBS Television Studios, was $287 million in the fourth quarter, down from $418 million. CBS said the drop was the result of higher programming spending mainly due to the addition of Thursday Night Football. Operating income from a year ago included restructuring charges of $12 million.
Revenues were up 2% to $2.26 billion at the entertainment division.
CBS’ cable networks, including Showtime, had a 24% increase in operating income to $247 million because of the timing of premieres of new programming. Revenues were up 5% to $499 million, with higher licensing income from Showtime original series.
Local broadcasting operating income rose 19% to $313 million in the quarter from a year ago. Revenues were up 9% to $785 million.