Universal Theme Parks In Florida, Japan Get “Off-The-Charts” Customer Reviews, Comcast CFO Mike Cavanagh Says; Movie Biz “Lumpy” But “Healthy”

Comcast theme parks swung from nearly $3 billion in profit to $500 million in losses “in a flash” during 2020, but their current outlook is “encouraging,” CFO Mike Cavanagh said.

Cavanagh discussed parks, Universal’s film and TV operations, streaming service Peacock and other topics in an online appearance today at a Deutsche Bank investor conference.

As the other major U.S. parks operator along with Disney, Comcast has been known for “the strongest margins in the space,” Cavanagh said. After achieving break-even in the fourth quarter, the parks unit will “look to get profits back” this year as the coronavirus pandemic eases, the exec said. Universal Studios has been cleared to reopen in California next month and a new park will debut in Beijing this summer. Florida and Japan sites, which have reopened with limited capacity, have often been full and customer feedback on the experience has been “off the charts” in terms of safety and satisfaction, he added.

At the film studio, Cavanagh said the return of theaters globally is expected, but “we’re not there yet.” The company felt it was wise to hold off on some major releases. The ninth Fast & Furious installment moved back from May to June and Minions: The Rise of Gru will go out in 2022 instead of this year.

The “hybrid model” deployed by Trolls World Tour and The Croods: A New Age, which saw a much narrower window than usual (with Trolls skipping theaters altogether) will continue. NBCU chief Jeff Shell, studio boss Donna Langley and their teams “have negotiated to reduce the window on a case-by-case basis,” Cavanagh said, though he didn’t offer any examples.

Financially, the relative lack of new film releases will show up in the results for a few quarters, the CFO noted. “Until you get the machine really going, you might see some cost benefits, but it’s more of a timing issue,” he said, describing the movie business as a “multi-year story.” While the “lumpiness in the P&L is going to be with us for a while,” he said, “the backdrop is healthy.”

Peacock, which had its nationwide launch last July, is “off to a great start,” Cavanagh said. The company announced 33 million sign-ups in January. Cavanagh did not reveal any additional metrics, but said the streaming service’s launch should be graded on a curve given Covid-19. “To be where we are is a real test to the power of the content and creativity and understanding of the media space that our teams at NBCU have,” he said.

The strategic positioning of Peacock aims to take advantage of the broadband and pay-TV capabilities of Comcast. Its initial launch was last April, focused within the Comcast footprint for that reason. The company’s Flex broadband video offering, which is a free service for X1 customers, now has 3 million connected-TV devices in circulation, Cavanagh said. CEO Brian Roberts provided the updated figure last week at a different investor conference.

Across Comcast’s networks, the fastest-growing streaming brand in 2020 was Zoom (not a surprise given the spike in remote work, school and government activity). No. 2 on that list, though, was Peacock, which ranked ahead of TikTok, Cavanagh noted, calling it a “fun stat.”

Asked about the company’s recent restatement of its financial results for 2019 and 2020, Cavanagh said it better reflects the reorganization of NBCUniversal.

The company will now have three divisions under the NBCU umbrella. The Media unit combines broadcast and TV networks and stations, as well as peacock. The Studios division pools film and TV studio production and distribution. Theme Parks remains its own unit.

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