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Cable TV
By the Project For Excellence In Journalism


A year after one of the worst economic downturns since the Great Depression, cable news shone as a bright spot in the parent companies’ struggling portfolios.

Although each of the parent companies that own the cable news channels returned to or remained in the black, each also had a dip in revenues for the year. The cable news channels they own were an exception in that regard; they either increased their revenue or remained flat.

Part of ensuring profitability for these companies meant shedding assets and cutting costs in other ways. Time Warner completed the spinoff of both AOL and Time Warner Cable and hinted that such a fate might be in the future of several other properties. News Corp. sold the Weekly Standard, and oversaw significant layoffs at MySpace, its struggling social networking portal.

The biggest change came at NBC Universal, when Comcast struck a deal to purchase a controlling stake in the operation.

In 2009, it would seem that Comcast and Time Warner made opposite bets. Time Warner sold its cable systems in order to concentrate on content; and Comcast purchased a programming producer in order to integrate it with its cable systems. Comcast’s purchase of the NBC television network along with NBC Universal’s cable channels is widely interpreted as a further sign of the ascendancy of cable and the decline of broadcast.

For data and baseline information about cable news ownership, see PEJ’s new interactive tool, Who Owns the News Media, on the top media companies in the United States. Readers can use it to compare financial information, audience, and general information of the companies that own the cable news channels – NBC Universal (MSNBC and CNBC), Time Warner (CNN and HLN), and News Corp. (Fox News Channel and Fox Business Network). In the section below, key trends and developments in the ownership of the cable news channels in 2009 are examined.

NBC Universal (NBC News, including MSNBC)

The biggest news in media ownership in 2009 was the sale of NBC Universal: General Electric reduced its share of ownership from 80% to 49%; Vivendi, the France-based media conglomerate, sold its 20% share; and Comcast Corp, the giant cable operator, acquired a controlling 51% interest. The sale gives Comcast control of NBC News, which produces the cable news channels MSNBC and CNBC as well as top-rated broadcast news.

The merger was subject to regulatory approval by the Federal Communications Commission and the U.S. Justice Department. Additionally, the Senate antitrust panel scheduled a February 2010 hearing to determine whether the new entity will have an unfair advantage over its competitors.1

Given the complexity of the deal, and the scrutiny it attracted by federal regulatory authorities and Congress, it was expected that it could take as long as 18 months for the deal to be completed. So NBC Universal is likely to remain under the control of General Electric until the sale to Comcast is completed.  And even after the deal clears regulatory hurdles, the transition may not be complete until 2011.2

When the transaction was negotiated, GE owned 80% of NBC Universal. France-based media conglomerate Vivendi owned the remaining 20%.3

Under the terms of the deal, GE has an option to sell its remaining 49% stake in NBC Universal at specified intervals over the course of seven years.4

The deal valued NBC Universal at $37 billion.

In2009, NBC Universal revenues represented 10% of GE’s revenues, and 21% of its profits.5

Comcast Would Bolster Content Business

The purchase would give Comcast, which already has a vast cable network, a much bigger portfolio of programming and a vast pipeline through which to distribute it.

Comcast’s main business focus has been in content distribution; it had 23.8 million cable subscribers as of January 2010.

The Philadelphia-based company already owns E! Entertainment Television, the Golf Channel, and a controlling interest in the 76ers and Flyers.6 In addition to 10 cable channels including MSNBC and CNBC, NBC Universal owns NBC News, the NBC and Telemundo networks and 26 local TV stations.

Acquiring NBC may also give Comcast an important role in determining how network digital TV content will be delivered to consumers. The cable company offers on-demand programming on its cable systems and launched a trial of Xfinity, Comcast’s version of the “TV Everywhere” technology, which delivers online video via broadband to subscribers and existing cable customers.7

Possible Impact on NBC, News Division

A change in the control of either broadcast and cable news operation is rare and bound to bring about changes — though just what they will be may not be known until Comcast and NBC integrate their businesses.

Most of the growth at NBC Universal in recent years has come from its cable channels, which benefit from an entirely different economic model than broadcast. Cable channels generate half of their revenue from subscription fees rather than relying entirely on advertising. Despite broadcast television’s larger audiences, cable channels are more profitable. NBC Universal’s portfolio of cable channels — including those operated by NBC News — were projected to earn $3.9 billion in revenue, and $1.77 billion in profit, according to estimates by the research firm SNL Kagan.

The news channels have grown swiftly in recent years. Analysts estimated that MSNBC alone would earn $149.6 million in profit on $367.5 million in revenue in 2009. Along with CNBC and CNBC World, news channels make up more than $500 million of the NBC Universal cable channel profits — about 30%.

NBC Universal Cable Properties
NBCU-owned cable channel 2009 Revenue 2009 Profit
USA Network $1.44 billion $633 million
CNBC $663.2 million $369.9 million
Syfy $585.2 million $239.5 million
Bravo $494 million $235 million
MSNBC $367.5 million $149.6 million
Oxygen $217.3 million $82.3 million
Sleuth $55.1 million $21.3 million
Chiller $33.8 million $14.5 million
Mun2 $33.3 million $11.8 million
CNBC World $13.8 million $7.8 million

Source: SNL Kagan, LLC. All numbers are estimates. Revenue is total net revenue, and profit is pre-tax.

Some NBC employees and industry observers raised questions about Comcast’s commitment to broadcast television.

At the December 2009 UBS investor conference, Comcast CEO Brian Roberts promised to retain a broadcast network and ties to affiliated local television stations.8

Indeed, Roberts and GE Chief Executive Jeffrey Immelt said the focus in 2010 would be on restoring NBC as a first place network by improving programming.9 NBC has been in last place among the four major networks in ratings for entertainment programming since 2006. Five years earlier, it was No. 1.

Comcast executives told NBC employees that “widespread layoffs were unlikely because there is little overlap between the two companies,” according to the New York Times.10 But one NBC employee told the Times, “Some of us are worried that they’re going to have sticker shock over what it takes to do it on the broadcast side.”

What does it mean for news? As of early 2010 the company hadn’t announced any change in strategy for the news division.

On the broadcast side, NBC News may have been the only profitable news operation among the networks in 2009 (for more, see Network Economics). Deana Myers, a senior media analyst for SNL Kagan told the New York Times in March 2009, “NBC’s success in news is definitely an advantage…It’s their strong point. It balances their weakness in prime time.”

Time Warner (CNN)

After an abysmal year of financial losses, Time Warner made strides to return toward profitability in 2009, in part, by spinning off AOL and Time Warner Cable to raise funds. The company also hinted at further asset sales to come.

The long-awaited spinoff of Time Warner Cable finally happened on March 27.12 Time Warner chairman and CEO Jeffrey Bewkes had defended the sale as a way for his company to invest in its television and film businesses. The spinoff also helped strengthen Time Warner’s balance sheet, giving the company, which owned 85% of the unit, $9.25 billion to spend elsewhere.13 Some analysts have speculated the company may use the proceeds to bid on more cable channels.14

Several other attempts to shed properties were in the offing for Time Warner.

The company rid itself of AOL, the struggling Web portal. The spinoff, which was announced in late April, officially occurred on December 9.

Bewkes hinted that the company may sell Time Inc., too. Of the company’s future in publishing, Bewkes said it “may well include publishing,” but “we’re not making a religious statement about it either way at this point.”15

Time Warner’s foray into online social networking with Bebo, the European social networking portal, continued to be lackluster, although there was no official word on whether the company would sell the property. Time Warner purchased Bebo for $850 million in 2008. That same year, Bewkes admitted that his company “may have overpaid” for the site. By January 2009, a Bebo insider told the Washington Post that the site was for sale for $200 million.16 But Bebo and AOL denied that a sale was being discussed.

While shedding some assets, Time Warner took steps to protect others. Perhaps eyeing the fate of newspapers, which have lost readers and advertising to the Internet, Bewkes endorsed a measure to prevent a similar plight for television channels. (For more on newspaper economics, see the Newspaper chapter). He embraced the concept called TV Everywhere. Under the plan, cable subscribers would still be able to access television programming and movies at a password-protected website, but nonsubscribers would be blocked. (For more on TV Everywhere, see Cable Economics).

News Corp. (Fox News Channel)

In 2009, News Corp, the parent of Fox News Channel, was less profitable and generated less revenue than in 2008. The dip in overall profit was slight, offset by layoffs at one of its properties and the sale of another.

Fox News generates a small but growing fraction of News Corp.’s overall revenue, helping to make up for declines in its print and Web operations. Its revenues grew 14% in 2009 to $1.2 billion (see Cable Economics).  News Corp.’s cable network division (which includes Fox Business Network, FX, Fox Movie Channel, and others), is one of the company’s top performing units.

One property that has not fared well financially is News Corp.’s social networking website, MySpace. It was purchased by News Corp. in 2005 for $580 million. But with declining ad revenue, the company, in June of 2009, cut 420 employees, or 30% of its staff.17

News Corp.’s newspaper properties also continued to have revenue declines, tied largely to the inability of online revenue to make up for losses in print circulation (see the Newspaper chapter).18

News Corp. sold off its conservative political magazine the Weekly Standard.19 The magazine, which, like News Corp.’s other print ventures, struggled with declining revenue, was purchased by Clarity Media Group in June for an undisclosed sum (see the Magazine chapter).


1. “US Senate panel to discuss Comcast/NBC deal Feb. 4,” Reuters, January 20, 2010.

2. Wayne Friedman, “Comcast-NBC Integration To Come Long After Other Marketplace Changes,” MediaPost Publications, December 8, 2009

3. GE bought NBC Universal in 1985 for $6.3 billion.

4. Max Colchester, “Vivendi To Sell 20% Stake in NBCU To GE For $5.8 Bln,” The Wall Street Journal, December 3, 2009. If Comcast-NBC deal is not finalized by September 30, 2010, Vivendi will receive $2 billion for a 7.66% stake of NBC Universal. The remaining $3.8 billion for the remaining 12.34% stake would be paid after completion of the Comcast GE transaction.

5. GE 10K, SEC filing, fourth quarter and full year results 2009, filed February 19, 2010

6. “U.S. to Review Comcast-NBC Deal,” The Associated Press, Janury 6, 2010

7. David Wilkerson and Steve Goldstein, “Comcast scores controlling stake in NBC Universal,” MarketWatch, December 3, 2009

8. Brian Stelter, “NBC-Comcast Deal Puts Broadcast TV in Doubt,” The New York Times, December 6, 2009

9. Brian Stelter, “NBC-Comcast Deal Puts Broadcast TV in Doubt,” The New York Times, December 6, 2009

10. Brian Stelter, “NBC-Comcast Deal Puts Broadcast TV in Doubt,” The New York Times, December 6, 2009

11. Time Warner earnings are derived from the company’s earnings report, released February 3, 2010.

12. “Time Warner to complete cable spin-off on March 27,” Reuters, February 26, 2009

13. “Time Warner Cable Spinoff to Finish Next Month,” New York Times, February 27, 2009

14. Personal communication with SNL Kagan analyst Derek Baine, January 4, 2009

15. “Time Warner profit slips 14%,” Associated Press, April 29, 2009

16. Mike Butcher, “Updated: A Year Later, AOL Is Contemplating a Bebo Sale,” Washington Post, January 27, 2009

17. Marc Graser, “MySpace cuts 30% of staff,” Variety, June 16, 2009

18. Tim Arango and Richard Pérez-Peña, “Murdoch’s Soft Spot for Print Slows News Corp.,” New York Times, February 23, 2009

19. Christine Delargy, “Weekly Standard Sold to Clarity Media Group, Examiner’s owner,” FishbowlDC, June 17, 2009