CBS.WD Cbs Corp.

By Joe Flint and Micah Maidenberg 

CBS Corp.'s current contract with the National Football League runs through the 2022 season, but executives at the media company are already making their case to the league for a new deal.

CBS has been "very good for the NFL," said Sean McManus, chairman of CBS Sports on a call with analysts to discuss the company's fourth-quarter results.

Although the current slate of NFL deals have several years left to run, there is already talk that the league might be wooed by a deep-pocketed technology company such as Amazon.com Inc.

"I think they love the reach of broadcast," said Joseph Ianniello, CBS's president and acting chief executive, of whether NFL might take a major package of games off broadcast television. "I don't think you ever want to cut off your core audience."

There also might be competition for CBS's Sunday afternoon package of NFL games from Walt Disney Co.'s ABC, whose entertainment executives often bemoan the fact that unlike Fox, NBC and CBS, it doesn't have the league to use as a promotional platform.

Mr. McManus said he expects the company to "do what is necessary" to hold on to the NFL.

That CBS is already positioning itself so far ahead of its deal's expiration points to the power of NFL content. Ratings this season were up 5%, and although ratings for NFL broadcasts have declined from several years ago, the league is still typically the biggest draw on television by far.

At the same time CBS was touting the value of its broadcast network for the NFL, it was also boasting of growth for its direct-to-consumer streaming services.

The company is forecasting the subscriber base at its main content-streaming services will more than triple in the next three years because growth at the platforms has been stronger than expected.

CBS raised its subscription target for CBS All Access, which allows consumers to watch live sports, television shows and other programming, and its Showtime streaming platform, to 25 million by 2022 from an earlier forecast of 16 million, a spokesman said.

The company said eight million people now subscribe to both services. In August, CBS predicted it would achieve the number of subscribers at the end of this year.

The company faces heightened competition as Disney, AT&T Inc.'s Warner Bros and Comcast Corp.'s NBCUniversal prepare their own offerings, hoping to mimic growth at Netflix Inc.

CBS said it is open to putting episodes of shows that have aired on All Access on its broadcast network as well after a certain amount of time has passed. The hope, Mr. Ianniello said, is that viewers could sample CBS All Access programming such as "The Good Fight" or "Star Trek: Discovery" on CBS and then subscribe to the streaming service for new episodes.

Shares in CBS fell about 3% in light after-hours trading, but have gained 12% so far this year.

Overall, CBS posted a fourth-quarter profit of $561 million, or $1.49 a share, compared with a loss of $41 million, or 10 cents a share, a year earlier. The 2017 results reflected a noncash loss related to the spinoff of the company's radio business.

The company's adjusted profit of $1.50 a share fell short of the $1.53 a share analysts expected, according to FactSet.

CBS said revenue rose to $4.02 billion from $3.92 billion a year earlier. Analysts predicted $4.13 billion for the most recent quarter.

The company's entertainment segment, which includes its television network, film business and digital-streaming services, generated flat quarterly sales of $2.83 billion.

CBS has faced turmoil of late in its executive suite as well as its news division. Its chairman and chief executive, Leslie Moonves, resigned last September after allegations that he sexually harassed and assaulted many women during his career became public. Mr. Moonves has denied any nonconsensual sex.

The company is locked in a legal dispute with Mr. Moonves over a $120 million severance package the board decided not to pay him after conducting an investigation into the harassment allegations.

Write to Joe Flint at joe.flint@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

February 14, 2019 19:37 ET (00:37 GMT)

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