Business

FUMBLED EARNINGS

The Super Bowl is a ratings winner, but it’s also a big money loser — at least for NBC.

The GE-owned network purportedly lost $45 million on the Feb. 1 telecast, despite monster ratings and a record $206 million in ad sales. The loss contributed to a 45 percent plunge in first-quarter profit for NBC Universal, according to corporate parent GE, which released earnings yesterday.

In a statement to employees, NBC Universal chief Jeff Zucker said the decline had “nothing to do with the strength of our operations.” He blamed it on “timing” issues, such as a writedown of the company’s investment in ION Media and the fact that it aired the Super Bowl.

It’s no secret the broadcast networks lose money on their football deals because of the huge rights fees the NFL extracts. TV execs consider football a loss leader that brings in a reliable flow of viewers.

But industry insiders are suspicious that NBC actually lost money on the Super Bowl, which commands the highest ad rates in television. Rather, some suggest GE is writing off a chunk of NBC’s losses on its NFL contract, attributing them to the Super Bowl.

In reality, the Super Bowl doesn’t usually come with a separate rights fee or contract. The game is just part of the multi-year package that a network negotiates with the league. The major networks rarely, if ever, break out the financial results for the Super Bowl.

“In the last 20 years, I don’t recall a broadcaster releasing a profit-and-loss statement for the Super Bowl,” said Neal Pilson, a former president of CBS Sports and the head of Pilson Communications, a sports consulting firm.

Some industry insiders wondered if GE singled out the Super Bowl in its earnings to send a message about steep rights fees, especially in such a severe ad downturn.

Overall, NBC Universal generated $391 million in profit from operations in the first three months of the year, down from $712 million in the same period a year ago. Revenue fell 2 percent to $3.52 billion.

In addition to the Super Bowl hit, the weak ad market, declining DVD sales and a spending slump at its theme parks also weighed on results.

GE also took a hit yesterday, as its earnings tumbled 35 percent over soured financial bets.

While dismal by some standards, the results beat Wall Street’s already low expectations for the global conglomerate, which also makes products ranging from light bulbs and jet engines to medical gear and windmills.

GE said overall profit in the quarter fell to $2.74 billion, or 26 cents a share, from $4.30 billion, or 43 cents, a year earlier.

Profit at the company’s financial arm, GE Capital, fell 58 percent to $1.12 billion. It got burned by investments in credit cards and commercial real estate. Its real estate and shopping mall unit posted a $173 million loss, compared with $476 million in profit a year earlier. With Paul Tharp