Streaming Helps CBS to Solid Q3 Despite NFL Ratings Dip

Company’s over-the-top offerings have helped it withstand wave of cord-cutting

cbs earnings
CBS' logo on the iconography of a dollar bill

National Football League ratings aren’t what they once were, but America’s most popular sport — and the Floyd Mayweather – Conor McGregor fight — helped CBS to a third quarter that was more profitable than analysts expected.

After markets closed Thursday, CBS reported revenue of $3.17 billion and earnings of $1.11 a share for the three months ended Sept. 30. That compares with the $3.4 billion in revenue and earnings of $1.05 a share CBS reported for the third quarter last year. Analysts had estimated CBS would report $3.27 billion in revenue and earnings of $1.08 a share, on average.

“Our solid third-quarter results demonstrate the way we are shifting our business to capitalize on changing viewing habits,” Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation, said in a statement accompanying the earnings. “To that point, during the quarter we saw dramatic growth in our affiliate and subscription fees, including revenue from traditional and skinny bundles as well as over-the-top viewing. Today we have more subscribers at CBS and at Showtime than we did a year ago, and best of all, newer digital platforms are resulting in more revenue per subscriber than traditional ones. So not only are we growing our subs, but we are growing our rates as well.”

CBS had a whopping 52 percent increase in retransmission and subscription fees, with the Floyd Mayweather – Conor McGregor fight, which was aired on Showtime and Showtime’s streaming service on Aug. 26, leading the way. Ad sales dipped 5 percent without the election year boost.

And while one of America’s big three broadcast networks still generates the bulk of its revenue from linear television, Moonves has been proactive in adapting CBS to fit the changing TV landscape. CBS has two over-the-top streaming subscription products, Showtime and CBS All Access, the latter of which is also available in Canada. CBS All Access also has rights to the NFL games CBS broadcasts (but only Verizon customers can watch the league on mobile devices) and is the exclusive home of “Star Trek: Discovery.”

And even though NFL ratings are down about 7 percent compared with last year, the sport still dominates fall television — and new CBS lead color commentator and former Dallas Cowboys quarterback Tony Romo has won plenty of plaudits for his informed analysis.

CBS will hold a conference call to discuss the earnings at 4:30 p.m. ET.