Viacom – owner of networks CBS and UPN as well as cable properties MTV and Nickelodeon – posted a $190.4 million loss for the third quarter, compared with $33.4m profit last year, on a 1.7% drop in revenue to $5.7 billion.
The group’s EBITDA (earnings before interest, taxes, depreciation and amortization) tumbled 32% to $976.9m, hit by the $200m lost in the aftermath of September 11 and a $356m pre-tax charge at its Blockbuster video chain.
Viacom forecast double-digit EBITDA growth for 2002, assuming no upturn in the ad industry, and hinted it may look to cut costs. Commented president Mel Karmazin: “We are taking the viewpoint that there is not going to be revenue growth as far as operating our company so we are looking at ways of dealing with all kinds of expenses.”
Karmazin highlighted continued cutbacks by advertisers – who account for nearly half Viacom’s revenues – stating that they “are proceeding very cautiously…A lot of advertisers are avoiding news programs,” with many purchases made “at the last minute”.
The group’s TV arm posted a 17% fall in EBITDA to $282.6m on a 7% decline in revenue to $1.59bn. However, its cable networks unit, which includes MTV and Nickelodeon, saw increased ad dollars and affiliation fees boost revenues by 7% and drive EBITDA up 17% to $470.2m.
News source: Wall Street Journal