Thursday, October 2, 2008

Local NBC stations seeing 'tremendous effect' from U.S. financial crisis

From Bloomberg News

The downturn has hurt the stations, 'whose businesses were highly dependent' on auto and retail ads, NBC Universal chief Jeff Zucker says. Sales at the national level have yet to be affected.

NBC Universal's local television stations are seeing a "tremendous effect" from the economic climate, though advertising sales haven't been hurt at the national level yet, Chief Executive Jeff Zucker said Friday.The economic downturn in the U.S. has had a "profound effect on our local television stations, whose businesses were highly dependent on auto" industry and retail advertising, Zucker said at a conference in London."We haven't seen an advertising slowdown on a national level yet in the United States, but it's obviously something that I'm concerned about," Zucker said. "If you're not concerned about it, you are in denial about what's going to happen in the next 12 months."

The U.S. is suffering the biggest financial meltdown since the Great Depression, which is likely to hurt consumer spending and the economy. NBC Universal, 80% owned by Fairfield, Conn.-based General Electric Co. and 20% by Paris-based Vivendi, is seeing the effects on its businesses, particularly theme parks, Zucker said.The company is bolstering its international business to produce movies and shows for specific local audiences.

On Aug. 20, NBC Universal said it agreed to buy London-based Carnival Film & Television Ltd. and the library rights to its titles. Carnival produces "Hotel Babylon" for British Broadcasting Corp. and "Midnight Man" for ITV."Carnival gave us a jump-start to hit the ground running," he said. Overseas operations are "an opportunity to correct the cost structure that exists in the United States," Zucker said.

Asked whether he's "waving a checkbook" at international producers, Zucker said he's "not here with a checkbook today."NBC Universal will "look at opportunities as they come up," Zucker said, though he would "like to see this grow organically."On Thursday, GE reduced its annual profit forecast for the second time this year and suspended its stock buyback.

Zucker said GE's commitment to NBC Universal in the last 16 months had been "profound.""They've invested more than $2 billion in the last 16 months alone," he said. "So I think GE's commitment to NBC Universal has been rock-solid."

No comments: