Versant Reports Lower Revenue, Profits Despite Digital Growth

Editor's Note

TheDesk.net on State of Streaming is a syndicated partnership featuring reporting by Matthew Keys — founder and editor of TheDesk.net, covering media technology, cable television networks, and digital platforms. This report analyzes Versant Media’s third-quarter financial results: top-line revenue declining 4.2% to $1.59 billion, operating income falling 32.9% to $110 million amid ongoing pay-TV cord-cutting and tough linear ad comparisons, balanced against 9.6% growth in its Platforms division (led by Fandango), network audience gains across MS NOW and USA Network, and reaffirmed full-year guidance.
Versant Media continued to see pressure in its cable networks business as ongoing churn in the cable and satellite TV industry chipped away at its revenue during the third quarter (Q3) of the year.

The company reported revenue of $1.59 billion during the three months ending September 30, a decrease of 4.2 percent from the same period last year. The results come as Versant continues expanding its digital operations following its separation from Comcast, while its traditional cable TV business faces continued pressure from declining pay TV subscriptions.

Distribution revenue declined 5.8 percent during the quarter, primarily because of subscriber losses, which were partially offset by contractual rate increases, while advertising revenue fell 5.3 percent because of a year-over comparison to the Ryder Cup that aired on Versant-owned cable networks.

The company’s Platforms business, which includes Fandango and other digital operations, reported a 9.6 percent increase in revenue. Excluding the effects of the SportsEngine divestiture and Full Swing acquisition, Platforms revenue increased 17.4 percent. Fandango benefited from higher movie ticket sales, home entertainment purchases and revenue from its Fandango1 cinema operating platform.

(Snapshot of Versant stock at time of publishing)

Versant also reported improved audience trends across several television networks: MS NOW (formerly MSNBC) ranked as the second-most-watched cable network during the quarter, according to the company, while recording double-digit audience growth across key demographics. The network launched its MS NOW Membership offering ahead of the midterm elections and reported more than 105 million podcast downloads during the first nine months of the year.

CNBC ranked among the 10 most-watched cable networks during market hours for the eighth consecutive month across key demographics, while Golf Channel recorded its most-watched PGA Tour season since 2018. USA Network also benefited from live sports programming, with viewership of its inaugural WNBA season increasing 25 percent compared with the previous year’s cable average.

Across its networks, Versant reported reaching more than 120 million viewers monthly, with aggregate viewership increasing by double digits on a year-over basis. Despite the revenue decline, Versant reaffirmed its full-year outlook, forecasting revenue between $6.2 billion and $6.45 billion.

“Versant’s momentum continues, with audience growth and the completion of all planned pay television distribution renewals for the year, underscoring the value and enduring appeal of our brands,” Mark Lazarus, the CEO of Versant, said in a statement. “In the third quarter, we advanced Fandango’s evolution into a comprehensive entertainment platform, integrated Full Swing into our golf ecosystem, and launched MS NOW Membership to connect directly with our audiences. We’re building deeper consumer relationships, expanding our reach and creating new opportunities for growth and monetization across our four core markets.”

Anand Kini, the company’s Chief Financial Officer, said the results reported on Tuesday “demonstrates the financial discipline and flexibility that underpins Versant’s strategy.”

“We delivered strong Platforms revenue, continued operating efficiencies and significant cash flow,” Kini said. After offering a top-line forecast heading into the full year, Kini said the company believes its “ability to invest in growth, maintain a healthy balance sheet and return capital to shareholders is a distinct advantage” relative to its peer media businesses.

Versant was spun out of Comcast’s NBC Universal earlier this year.

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