American media group Viacom – parent of the CBS and UPN television networks – posted a $42.5 million net loss for the fourth quarter, some way off the $30.4m profit it made twelve months before.
Hurt by the ad downturn, revenues for the period slipped 5% to $6.04 billion, while EBITDA (earnings before interest, taxes, depreciation and amortization) fell 22% to $1.06bn, in part due to restructuring charges at CBS and the MTV cable network.
Although a company statement erred on the side of caution, warning that “economic trends in the first quarter of 2002 continue to mirror the soft conditions experienced [in Q4],” president Mel Karmazin expressed optimism about the firm’s outlook. “Overall advertising trends right now [are] very promising,” he said, adding that TV and radio are both improving on Q4.
Viacom is sticking to its 2002 EBITDA target of double-digit percentage growth.
Separately, the media giant confirmed it intends to purchase Los Angeles TV station KCAL after reports it was nearing a deal [WAMN: 13-Feb-02].
Viacom will pay Young Broadcasting $650m in cash for the station, which it plans to keep as an independent. Speculation had suggested it might try to make KCAL the area’s UPN affiliate, a status currently enjoyed by NewsCorp’s KCOP.
The purchase will leave Viacom in violation of several federal regulations, as it already exceeds the 35% ownership cap and will own two stations in LA. It is in the process of challenging these laws.
Data sourced from: Wall Street Journal; MediaWeek.com (USA); additional content by WARC staff