The increase at ESPN was due to the benefit of lower programming costs and higher affiliate
revenues, partially offset by a decrease in advertising revenue. Results for the quarter benefited from the
timing of our fiscal quarter end relative to when College Football Playoff (CFP) bowl games were played,
which resulted in a decrease in programming costs and advertising revenue. One CFP game was aired in
the current quarter, whereas seven CFP games were aired in the second quarter of the prior year. Affiliate
revenue growth was due to contractual rate increases, partially offset by a decline in subscribers. Lower
advertising revenue was due to lower ratings and rates, which were negatively impacted by the timing of
CFP bowl games, partially offset by higher units sold.
Lower equity income from A&E was due to a decrease in advertising revenue, higher programming
costs and a negative impact from the conversion of the H2 channel to Viceland as Viceland is in a start-up
phase.
Broadcasting
Broadcasting revenues for the quarter increased 3% to $1.8 billion and operating income decreased
8% to $278 million due to lower operating income from program sales and higher programming and
marketing costs, partially offset by advertising and affiliate revenue growth. Lower operating income from
program sales was due to a significant SVOD sale in the prior-year quarter and a higher cost mix of
programs sold in the current quarter. The increase in programming costs was due to a higher average cost
of new scripted programming and increased program cost write-offs. The increase in network advertising
revenue was due to higher rates, partially offset by lower ratings. Affiliate revenue growth was primarily
due to contractual rate increases.