College basketball has proven to be a slam dunk for Time Warner Inc.
"March Madness" premiered this year on Time Warner’s Turner Broadcasting networks—TBS, TNT, and truTV—as part of a 14-year deal reached in April 2010. The deal has been a boon for the company, especially since the tournament's ratings this year were its highest since 2005. During a call Wednesday to discuss the company's earnings during the first quarter of this year, Time Warner CEO Jeff Bewkes said, "We think it will be a very profitable deal over time."
Time Warner reported a 31 percent spike in network advertising revenue year over year, up to just over $1 billion in the first quarter. Time Warner CFO John Martin thanked March Madness for the jump, saying that the sporting event "surpassed expectations." Overall, Time Warner's advertising revenue was up 20 percent, contributing to a 6 percent growth in the company's total revenue for the quarter compared to the same period last year.
Other areas of the company dealt with large losses, though. Revenue from advertising related to film products fell 15 percent year over year and revenue from its theatrical products was down by 20 percent, something Martin said was attributable to the fact that the company had "nothing this year" that could compare to the success of The Blind Side and Sherlock Holmes last year. Time Warner is pinning its hopes on the The Hangover Part II, which will be released later this month, to give a boost to flat theatrical revenues.