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Author Topic: Rummaging Through Liberty's 10-Q For GSN  (Read 1071 times)

CaseyAbell

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Rummaging Through Liberty's 10-Q For GSN
« on: August 10, 2004, 08:57:00 AM »
Count (sorry) on an actuary to look through a 10-Q for GSN's financials. Liberty just filed their latest quarterly statement with the SEC, so I rambled through it looking for any info on GSN. I was kind of surprised that they actually broke out the network.

GSN showed total revenues of $43 million in the first six months of 2004, up from $37 million in the same period for 2003. Not really a surprise there. I've been noticing a wider variety of ads on the network, so I figured they might be taking in a little more change. GSN also showed positive operating income of $4 million, up from zilch in the same period for 2003.

For the second quarter alone, GSN showed $22 million in revenue and $3 million in positive operating income vs. $19 million in revenue and a negative $1 million in operating income for second quarter 2003. (Technical point: Liberty only owns 50% of GSN, but the revenue figures represent all of the network's operations. At least that's what they say.)

These numbers don't even make up a milli-drop in Liberty's bucket. To give you some idea of how small GSN is compared to some of the corporation's other media properties (all figures in millions):

Unit/six-month revenue/six-month operating income

Starz 470 101
Discovery Networks 1,115 196
Court TV 109 21
GSN 43 4

The itsy-bitsy spider is really itsy-bitsy. If you're interested, Liberty's discussion of GSN's performance for the first six months of 2004 (summarized to avoid fair use issues):

GSN's revenues grew 16.2% in the first half of 2004 compared to the first half of 2003. Ad revenue was up 7.7% and subscriber revenue up 22.8%. Subscribers grew 7.9% and there was a modest uptick in rates for both subscriptions and advertising.

Operating expenses grew 10.1%, due primarily to programming costs. SG&A expenses decreased from 58.7% of revenue in the first half of 2003 to 50.9% in 2004. Marketing expense increases were offset by bad debt reductions and general cost savings.

The relatively small increase in GSN's operating costs shows that its transition (however much some have exaggerated it) has been managed pretty frugally. The network has only ordered short runs of its originals. Losers like Fake-a-Date and Vegas Weddings can be buried quickly and cheaply. Winners like Blackjack and Dodgeball can be expanded with new series. The other new stuff has come off other people's shelves at apparently less than fancy prices. The cost controls and revenue increases have turned the network operating-income positive for a change.

One more technical point: SG&A means Selling, General and Administrative expenses. You know...salaries, commissions, advertising costs, travel, manicures...

And if you're just dying to read the full 10-Q:

http://www.sec.gov/Archives/edgar/data/108...141585z10-q.txt
« Last Edit: August 31, 2004, 10:43:12 AM by CaseyAbell »