Retrans Grows For ABC As Ad Sales Slip

EARNINGS CALL
Retrans Grows For ABC As Ad Sales Slip

Disney's legacy ABC businesses were down for the quarter, although the company didn’t offer specific details. A bright spot was an increase in affiliate revenue (retrans for the O&O stations and the ABC Network’s share of what affiliates receivd), which was attributed to higher rates. But the broadcasting segment had lower advertising revenues for the quarter, with ad sales down for the O&Os and a drop in average network viewership.

By Jack Messmer | February 4, 2020 | 9:44 p.m. ET.

It may look like “Wow!” numbers as The Walt Disney Co. reported a 34% increase in fiscal first quarter revenues (through Dec. 29, 2019) for its Broadcasting segment to $2.6 billion and operating income for the segment up 41% to $575 million. But there’s a simple explanation. The gains were due to consolidation of results from Disney’s acquisition of 21st Century Fox businesses — primarily program sales as far as broadcast television was concerned — and some accounting changes.

The legacy ABC businesses were down for the quarter, although the company didn’t offer specific details. A bright spot was an increase in affiliate revenue (retrans for the O&O stations and the ABC Network’s share of what affiliates received), which was attributed to higher rates. But the broadcasting segment had lower advertising revenues for the quarter, with ad sales down for the O&Os and a drop in average network viewership. The latter was partially offset by high ABC Network rates.

The only mention of the station business in the company’s Wall Street conference call came from CFO Christine McCarthy. She noted a decline in political advertising revenues for the O&Os from a year earlier, but didn’t offer any details.