Les looks for profit punch

Moonves high on CW's fall launch

Leslie Moonves sent CBS bounding out of the gate Thursday with promises and predictions — including a pledge that the CW will be profitable this year and an announcement that CBS will sell its theme-park biz.

Speaking at an investor presentation in Gotham, Moonves said that by combining programming from UPN and the WB, new zeitgeist net the CW would be a ratings hit right from the start when it launches in the fall. “We’ve instantly turned a loser into a winner,” he said.

On theme parks, one of the divisions the old Viacom had suggested could be in play, the company confirmed a sale would move forward.

Moonves said CBS already has a lot of interest and expects to have a deal done by June. “It’s a healthy profitable business with great management but one that just doesn’t fit with our core business,” he said, referring to entertainment content and distribution.

CBS owns Paramount Theme Parks, which includes Canada’s Wonderland in Toronto and Virginia’s Kings Dominion.

Asked if he might buy a studio, Moonves tantalizingly left the door open. “It is possible,” he said, and alluded vaguely to being “approached by a number of people who offered us a lot of money to get into the motion-picture business for no capital on our part.”

While he said the company decided to stay put, that decision could change. “I don’t think it’s something at the top of our hit parade to do but it might be fun,” he said.

In a florid presentation that saw Moonves quote “The Godfather” and describe the new company as a reality show, he also signaled a desire to remake Showtime. He said he hoped the pay cabler would become as important to CBS as HBO is to Time Warner, suggesting the company wouldn’t back down in mimicking HBO’s signature model of original programming.

Session was part informal prospectus and part pep rally — video montages played over U2’s “Beautiful Day” — with Moonves most keen on new forms of revenue. He cited deals like CBS’ recent distribution pacts with Google and Verizon, as well as new sponsors for the Web streaming of the NCAA basketball tourney in March. “We’re getting paid for content in new ways without adding any additional costs. It’s the same basketball game, same program, same news.”

Moonves also predicted the company would succeed in extracting reverse compensation from the affiliates for programming in the next few years and hinted CBS also would continue to pressure cable operators to pay the net for programming. “Try running a cable operator without the Super Bowl,” he said bluntly.

Exec also singled out network competitors. Asked by an analyst if he worried that CBS’ ratings were due for a slowdown, Moonves responded that the needle didn’t move significantly when the Eye took “Everybody Loves Raymond” off the air, but other nets weren’t as lucky. “What happened when ‘Friends’ got yanked off the schedule?” he asked rhetorically. “We’re not in that position. We have hits every single night of the week except Saturday, when no one has hits.”

One analyst raised skepticism about the company’s strong reliance on advertising coin, but Moonves downplayed it, saying CPMs have risen historically even when the stock market dropped.

As for nonstudio acquisitions, Moonves said he’s open to buying companies at home and abroad — CBS did buy College Sports TV late in 2005 — but suggested observers shouldn’t expect it. “We’re looking at everything but we don’t need anything.”

Technology enthusiasm even stretched to the maligned e-book format; citing the new Sony product, Moonves called it a “dawn of another great source of revenue for us.”

Chief financial officer Fred Reynolds forecast that the company would increase revenue, profit and free cash flow in the mid-single digits in its first year. More dividends also will be forthcoming, company said; Wednesday CBS increased its dividend by 2¢.

Finally, Moonves used metaphors to describe the company’s philosophy — he called CBS “a true 21st-century content-caster” and said, “Content is like currency, content that flows like water.”

He also described the net as being only in “the second inning of the turnaround” because of the relative youth of its flagship shows.

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