Cablevision Profit Up 8% During Third Quarter, No Thanks to Fox, Newsday

Company sees growth in digital video customers, charges higher rates; newspaper, though, struggles

Less than a week after ending an ugly dispute with Fox over retransmission fees, Cablevision reported a bump in its third quarter earnings on Thursday.

Net revenues grew 5.6 percent and operating income was up 8.3 percent, Cablevision said, attributing the increases to growth in “digital video, high-speed data and voice customers” as well as higher rates.

Cablevision said it generated, on average, $149.04 in revenue from each of its basic cable customers during the third quarter, even as the number of customers ticked down slightly. (Cablevision added 9,600 Internet subscribers and 9,300 phone subscribers during the quarter, but lost 24,500 basic video customers.)

Ad advertising revenue from its cable channels grew more than 30 percent during the period.

Overall, Cablevision generated an additional $225 million in free cash flow, bringing its year-to-date total to $656 million, the company’s chief executive James Dolan boasted.

Cablevision’s Rainbow group — which includes AMC, IFC and WE networks — reported a 10.7 percent increase in net revenue, with a 2.5 percent gain in subscribers to those channels during the quarter.

A 12.9 percent increase in advertising revenue — driven by higher pricing at AMC and WE – was partially offset by increased programming and marketing costs at AMC.

But the positive trends were partially offset by a decline at Cablevision-owned Newsday, its struggling daily newspaper. And it's a big problem for Dolan’s balance sheet. Newsday saw revenues (down 4 percent) and adjusted operating income (-28.3 percent) tumble as its operating loss doubled and advertising revenue (-7.6 percent) fell.

Worth noting: During its dispute with Fox, Cablevision told customers it would reimburse them if they bought a subscription to watch the World Series on MLB.com. The effect from that offer — and any of the legal costs associated with the October retransmission war — are not reflected in Cablevision’s third quarter earnings.

It'll be addressed in the fourth quarter earnings, I'm sure.