Viacom Inc. posted flat pro forma revenues in 2001 at about $23 billion with
a 2 percent cash-flow gain to $5 billion.
TV revenues were up 2 percent to $7.2 billion with a 1 percent cash flow gain
to $1.2 billion.
Cable revenues were up 4 percent to $4.2 billion with cash flow up 19 percent
to $1.7 billion.
Those cash-flow figures include write-offs of $67 million for cable and $53
million for TV, due largely to severance costs at MTV Networks (800 jobs were
cut) and United Paramount Network (which was put under CBS).
The company also took a $392 million charge to Blockbuster Inc. earnings, due
largely to write-offs of VHS tapes and the transition to DVD.
Viacom president Mel Karmazin said the company believes at the current time
that the second-quarter scatter market will be up between 5 percent and 15
percent, as inventory has tightened with ABC and Fox largely in make-good
mode.
He added that CBS' strategy of withholding more upfront ad inventory than
usual because advertisers wouldn't pay desired increases was 'looking good,'
although it's still too early to proclaim it a success.
But if it turns out that the strategy fails, Karmazin said, he would be to
blame. 'It was my decision,' he added.
Whether the strategy worked or not won't be fully known until the end of the
broadcast year.
Karmazin said first-quarter scatter pricing was at or 'slightly ahead' of
upfront pricing for both the broadcast and cable networks.
Chief financial officer Rich Breslin said he reviewed Viacom's major sports
contracts (the National Football League and the NCAA among them) and concluded
that there are 'no write-off concerns' and that the contracts will be
profitable.
Fox Tuesday announced a combined $909 million write-off for three big
contracts -- the NFL, the National Association for Stock Car Auto Racing and
Major League Baseball.
