Slow-Growth USA Wont Credit WWF11/05/2000 7:00 PM Eastern
USA Networks Inc. reported double-digit revenue and cash-flow growth during the third quarter, fueled by increases at Sci Fi Channel.
Overall, USA reported revenue of $1.1 billion, up 20.6 percent, and cash flow of $159.8 million, up 18.3 percent.
At the cable networks, cash flow was up 32 percent, driven mainly by growth at Sci Fi. Total revenue for cable was up 10 percent to $265 million. But revenue growth was sluggish at the flagship USA Network-at 2.7 percent-while Sci Fi showed a 40-percent revenue increase in the quarter.
But that sluggish growth was not due to the highly publicized loss of World Wrestling Federation Entertainment programming, the company said. Instead, last year's third-quarter numbers were inflated by a popular miniseries that was not run this year.
USA Networks chairman Barry Diller said in a conference call with reporters that the loss the WWF has been "overdone."
"I don't want to be misunderstood about WWF, yes we would have liked to renew it," Diller added. "It gave us great claiming rights because it had a huge audience of young males.
"That audience came for a couple of hours-they weren't there before wrestling went on and they immediately left thereafter. I also think that wrestling has been at its high. I think it is on a long decline."
The USA chairman also lamented the cooling advertising market, and attributed the slowdown mainly to the economy.
"Inevitably, advertising won't be as robust as it was last year," Diller said. "Anybody will tell you that the scatter ad market is quite weak-it's not a disaster, but its going to be less robust."
Diller also said changes were in store for its recent acquisition, Canadian digital-cable channel Trio.
In May, USA shelled out about $100 million to buy Trio and NewsWorld International. Trio would launch daily programming next year, Diller said.
NWI is a 24-hour news channel, and Trio runs mostly acquired arts-and-entertainment programming from Canada, the United Kingdom and Australia.
Diller had said he planned to expand Trio's focus on performing arts, including dance, theater and concert performances, while NWI would run fewer news shows and more documentaries.
He would give no details, but said, "On Feb. 1, you will look at Trio and it will look differently."
USA's acquisition of Trio and NWI squelched speculation that the company was looking to buy a major network-fueled further by Vivendi S.A.'s pending acquisition of major USA shareholder The Seagram Co. Ltd. Although Diller said his relationship with Vivendi was "first rate" during the conference call, he cautioned that USA is not on the hunt for a major acquisition.