Topper talks up company's indie status, future finances
Literally hours after slapping shock jock Howard Stern with a multimillion-dollar lawsuit, Leslie Moonves winged his way to Florida to talk up his company’s newly acquired independence and its financial prospects.
The CBS prexy-CEO was in Palm Beach, Fla., Tuesday night as the dinner speaker during the 19th annual Bear Stearns media conference and he made a point — not surprisingly — of pumping up the old media, especially the broadcast end of the biz.
But before it was over, he did have to deal with the uproar over Stern.
Asked eventually by moderator Victor Miller if he would comment on the suit, Moonves offered: “Of course not. I can’t talk about that here … but I’m sure it will be mentioned tomorrow morning on the radio.”
After titters from the investor audience, he added: “The good news is that not as many people will hear him as would have a year ago,” a deft putdown of Stern’s decidedly smaller audience on Sirius.
Despite Moonves’ lightheartedness, the lawsuit against Stern, his agent and his employer Sirius Radio, which was filed in New York Tuesday afternoon, is no joke.
There was no word late Tuesday whether Stern would countersue, but the apparent animus between the two — the radio personality called Moonves’ court action “a personal vendetta” — could easily escalate into the media grudge match of the year.
As for the main theme in Florida, it was, as for other media speakers like Disney’s Bob Iger and News Corp.’s Peter Chernin, about how Moonves’ company would manage its core assets in the new digital age.
The theme of the conference, per chief moderator and Bear Stearns co-COO Alan Schwartz, was whether the new technology was an opportunity or a threat to the “old media” players, whose stocks have languished for the past few years.
The ever-upbeat Eye exec brought things back to basics.
“Broadcasting,” he argued, “gets a bad rap. Last Thursday night 74% of people were watching broadcast TV. It’s still the best place in town to reach an audience.”
Seizing upon flagship show “CSI” as his primary example, Moonves touted “the whole pipeline” that the newly split-off company now controls on the TV side: production, a network, a station group and syndication.
The hit forensic show, for example, has been sold to U.S. cable for $1.9 million, to foreign for more than $1 million an episode, and on DVD for tens of millions of dollars so far. Other new media deals, like a recent one with Google, will only be “additive,” he claimed.
Moonves’ point is that as a stand-alone company now in control of the entire TV process, it’s easier to forecast the end game for any particular property.
While not actually bashing cable (the bailiwick now of sibling rival Tom Freston over at “new Viacom”), Moonves pointed out that it would take 18 “Nip/Tucks” to equal the ratings of just one “CSI” episode.
“Broadcast is still the best bang for the buck,” he enthused.
Warming to the Wall Street crowd, Moonves vowed that CBS’ first goal would be to “free up cash, pay out the dividend, indeed raise it every year.”
He also touched on the thorny issue of retransmission, saying “We’re going to begin to get paid for our signal.”
Pressed on the issue by one questioner, Moonves divulged a time frame for the first such deal — some six weeks out, which would involve some 3 million to 5 million subs. He said further, larger deals with cable ops won’t come up until ’08 or ’09 but that eventually there’d be “hundreds of millions of dollars” coming into CBS coffers (and/or split with affils) from the retransmission of the Eye signal.
Moonves’ remarks in Florida come a week after CBS reported fourth-quarter results, including a hefty $9.5 billion hit to write down the value of its TV and radio stations. That put CBS $8.8 billion in the red, following an $18 billion writedown the year before on radio and outdoor advertising.
Still, the CEO was pumped both last week and Tuesday night, saying that the Eye is enjoying its “underdog” rep in the wake of its formal split from Viacom on Jan. 3.
“People are underestimating us — writing about us like we’re Con Edison,” Moonves quipped.
His comments at Bear Stearns also came a day after Viacom prexy-CEO Freston touted his own company’s growth prospects to the same investors. Viacom’s fourth-quarter results revealed some messy film studio numbers from Paramount Pictures, which overshadowed the boffo perf of MTV Networks.
Viacom shares fell 2.3% last Thursday after its report; CBS shares eased 0.12% on Friday, in line with the overall market. (Eye stock closed at $24.46 a share Tuesday, down from its two-month high of $27.15 hit in late January.)
Moonves also said the radio sector is looking up.
“We’re treating each of our 179 stations differently, not reformatting all of them,” he said. (Apparently 41 of them are getting a makeover.)
While saying he had no idea how the satellite radio biz would pan out, he said radio was first and foremost “a local biz.” He did admit it was “tough” to lose Stern revenues, but quickly added, “Radio generates a lot of cash for us.”
On the TV side, Moonves said the advertising scatter market was looking good as political ad spending starts to climb ahead of the midterm elections.
“It looks to be great going forward,” he opined, adding that this year may be the first in a long time that all four broadcast networks are profitable.
Moonves also is bullish on the recently announced tie-up between the WB and UPN, which has been named the CW network.
“It took 12 years for the two of them to figure out they were mediocre,” he confided, but said the lineup of programming and affils for the CW would definitely be “stronger” than those for newcomer rival My Network TV with its syndicated soap operas.
CBS and Tribune stations, covering nearly 50% of the nation, have already inked long-term CW affil agreements, and the net is meeting with other station groups to get them aboard.
Earlier in the day News Corp.’s Peter Chernin touted the netlet My Network TV, aka MyTV, which Fox is launching as a response to the UPN-WB tie-up.