The president and CEO of NBCUniversal has taken the unusual step of publicly admitting his network trails its broadcast rivals in profitability terms by as much as US$1 billion a year.
Speaking at the Merill Lynch 2013 Media, Communications and Entertainment Conference, Burke (left) said that though NBC’s new shows were showing much promise, “the fact of the matter remains that we are significantly behind CBS, Fox and ABC in terms of the profitability of our broadcast business”.
“Roughly speaking, if you include the own television stations, the network and syndication, which I think is the way you should look at the broadcast ecosystem, we’re US$500 million to a US$1 billion behind the other three broadcasters,” he added.
This was despite the fact, he said, that each network’s business model was “essentially the same”.
However, the fact Comcast had used a mechanism to acquire the 49% of NBCU it didn’t own after the initial GE deal in just two years instead of the planned seven showed there was “a lot of opportunity” to grow the business, especially at the broadcast network.
He pointed to improving sports ratings and the success of reality series The Voice as proof of progress, and noted that “seven” of its cable channels – which include the high rating USA Network, Syfy and Bravo – make more than US$200 million in annual profit.
Burke took over at NBC when Comcast Communications acquired the film and broadcast group from General Electric in January 2011 for US$30 billion in one of media’s largest ever deals.
His comments suggests why Comcast’s top brass were so keen to take control of the business, which had fallen behind rivals under the leadership of GE in terms of ratings and revenue. Burke and his team have set about improving its broadcast position, and growing the international business since taking over.
Elsewhere in his keynote, the NBCU chief also waded into the increasingly polarised retransmission debate, claiming that “NBC made virtually nothing on retransmission consent two years ago” but that it would make around US$200 million from such payment this year. “Retransmission consent is a big opportunity for broadcast but more fundamentally we’ve underperformed,” he added.