Star India doubles its profit contributions to 21CF

MUMBAI: 21st Century Fox (21F) has said that the company’s India unit has nearly doubled its profit contributions year over year aided by the inaugural broadcast of the Indian Premier League (IPL), further penetration of its Hotstar platform and continued general entertainment growth.

Cable Network Programming annual segment operating income before depreciation and amortization (OIBDA) increased 10% to $6.17 billion, driven by an 11% revenue increase led by double-digit affiliate growth and higher advertising revenue partially offset by a 12% increase in expenses.

The increase in expenses was primarily due to higher global sports programming costs reflecting contractual National Basketball Association and Major League Baseball increases at the Regional Sports Networks (RSNs) as well as the inaugural broadcasts of the IPL at Star, Big Ten college football and FIFA World Cup at FS1, and Argentine Football Association matches at Fox Networks Group International (FNG International).

Domestic affiliate revenue increased 11% reflecting continued contractual rate increases across all our domestic brands. Domestic advertising revenue grew 1% over the prior year led by higher pricing at Fox News. Domestic OIBDA contributions increased 8% over the prior year led by higher contributions from Fox News, the RSNs and FX Networks.

International affiliate revenue increased 12% driven by strong double-digit growth at both FNG International channels and Star. International advertising revenue increased 21% led by Star, due to the impact of the inaugural broadcast of the IPL and entertainment growth, combined with continued growth at FNG International.

Annual OIBDA at the international cable channels increased 22% reflecting higher affiliate and advertising revenues at both FNG International and Star partially offset by higher sports programming costs.

The cable network programming quarterly segment OIBDA increased 12% to $1.61 billion, driven by 14% higher revenue from double-digit affiliate and advertising growth, partially offset by a 15% increase in expenses. The increase in expenses was primarily due to the inaugural broadcasts of the IPL at STAR and FIFA World Cup at FS1 and higher programming and marketing costs at FX Networks due to a greater number of original series episodes in the quarter.

Domestic affiliate revenue increased 11% reflecting higher pricing across all our domestic cable brands, led by the RSNs, FS1, Fox News, and FX Networks. Domestic advertising revenue increased 1% over the prior year period as the impact of higher pricing at Fox News and the broadcast of FIFA World Cup at FS1 were partially offset by lower advertising revenue at the RSNs.

Domestic OIBDA contributions increased 4% over the prior year quarter led by double-digit growth at Fox News, the sports networks and National Geographic partially offset by timing related declines at FX Networks.

International affiliate revenue increased 12% driven primarily by subscriber growth at both FNG International and Star. International advertising revenue increased 55% led by the broadcast of the IPL at Star and continued growth at FNG International. Quarterly OIBDA at the international cable channels increased 53% from the prior year quarter primarily reflecting the higher revenues at both STAR and FNG International.

The company reported total quarterly revenues of $7.94 billion, a $1.19 billion, or 18%, increase from the $6.75 billion of revenues reported in the prior year quarter. This revenue growth reflects strong double-digit growth across all operating segments led by higher content revenues at the Filmed Entertainment segment and higher affiliate and advertising revenues at the Cable Network Programming and Television segments.

Quarterly income from continuing operations before income tax expense of $1.08 billion increased $266 million from the $815 million reported in the prior year quarter. Quarterly total segment OIBDA of $1.91 billion increased 32% from the $1.45 billion reported in the prior year quarter led by higher contributions from the Filmed Entertainment and Cable Network Programming segments.

The company reported total annual revenues of $30.40 billion, an increase of $1.90 billion, or 7%, from the $28.50 billion of revenues reported in the prior year. This revenue growth reflects higher affiliate and advertising revenues at the Cable Network Programming segment and higher streaming video on demand (SVOD) and theatrical revenues at the Filmed Entertainment segment partially offset by the absence of advertising revenues generated by Super Bowl LI in the prior year at the Television segment.

Full-year income from continuing operations before income tax benefit (expense) of $4.41 billion decreased $279 million from the $4.69 billion reported in the prior year. Full year total segment OIBDA of $7.03 billion, was $141 million, or 2%, lower than the amount reported in the prior year.

The OIBDA decline was driven by higher contributions from the Cable Network Programming segment being more than offset by lower contributions from the Company’s Television and Filmed Entertainment segments as well as the higher compensation expense related to the Disney/New Fox transaction3 included in the Other, Corporate and Eliminations segment.

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