Viacom, Inc. (NYSE:VNV CL) Q1 2017 Earnings Conference Call - Final Transcript

Feb 09, 2017 • 08:30 am ET


Viacom, Inc. (NYSE:VNV CL) Q1 2017 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Viacom First Quarter 2017 Earnings Release Teleconference. Today's call is being recorded. At this time, I would like to turn the call over to Senior Vice President of Investor Relations, Mr. Jim Bombassei. Please go ahead, sir.

James Bombassei

Good morning, everyone, and thank you for taking the time to join us for our December quarter earnings call. Joining me for today's discussion are Bob Bakish, our President and CEO; and Wade Davis, our Chief Financial Officer.

Please note that in addition to our press release, we have slides and trending schedules containing supplemental information available on our website.

(Forward-Looking Cautionary Statements)

Today's remarks will focus on adjusted results. Reconciliation for non-GAAP financial information discussed on this call can be found in our earnings release or on our website. And now I'll turn the call over to Bob.

Bob Bakish

Thanks, Jim, and thanks, everyone, for joining us today. It's early days in our effort to chart a new course for Viacom. But I'm happy to say we made solid initial progress financially and operationally in the first quarter, and we made excellent progress on our go-forward strategy.

Financially, we generated good momentum in the quarter, including a return to revenue growth in our Media Networks and Filmed Entertainment segments. An increase in affiliate revenue and strength in our international operations drove top line growth in our Media Networks, while a stronger slate at Paramount drove greater returns at the box office. Of course, we still have work to do. Operating income declined in the quarter, due largely to increased programming expenses at the networks and marketing costs at Paramount.

Operationally, we've quickly made strides against our most immediate priorities in my first 2 months on the job. First, and broadly speaking, we've done a lot of work strengthening the management team with important new leadership announcements across Paramount Pictures, our domestic networks, Viacom International Media Networks and U.S. distribution.

Second, and speaking of U.S. distribution, beginning the work of strengthening our distribution partnerships has been a key area of focus. I've been spending time with a number of these clients, and the team under new leadership is already at work pursuing broader, more forward-thinking partnerships that reinforce the value of the pay-TV ecosystem and our brands and that take advantage of some assets that previously were not part of the equation.

Third, MTV has been a key focus, where already our new leadership is making progress. The new team is working quickly to stabilize the grid and provide a stronger foundation from which to launch new series as it continues to jump start the development pipeline.

Fourth, over at Paramount, our new COO is now on the lot, and we completed an important agreement with Shanghai Film Group and Huahua Media, giving Paramount 2 new strategic partners in China and a deal that we estimate could bring as much as $1 billion of slate funding to the studio.

On a related note, I would like to extend a