“Tonight Show” host Jay Leno’s jump to primetime next year at rival NBC is “a plus for us,” said CBS Corp. CEO Leslie Moonves on Wednesday. “Taking a third (broadcast) competitor out of the marketplace will make us even stronger,” he said.
“I will bet anybody who would like to bet that ‘CSI: Miami’ on Monday at 10 o’clock will beat Jay by a lot. Remember that. By a lot,” a cocky Moonves told investors at a media conference in Gotham.
As showbiz execs and Wall Streeters confront a business buffeted by an ugly recession, Moonves said advertising rates were flat from spring upfront levels but down from this time a year ago. The virtual disappearance of car commercials is still the single biggest blow by far. “We need automotive back,” Moonves said.
Perhaps there’s hope. Also on Wednesday, congressional Democrats and the Bush White House finalized a controversial $14 billion bailout package for automakers. If the Big Three aren’t going bankrupt after all, they’re going to have to sell some cars.
Separately at the conference, Time Warner CEO Jeff Bewkes warned that the bankruptcies of two major retailers — Circuit City in the U.S. and Woolworths Group in the U.K. — as well as Tribune Co. earlier this week could squeeze revenue at the media giant. “It’s not easy to say. The visibility has become more difficult,” he said.
Moonves also discussed a provocative topic that’s bound to ruffle feathers: the possibility that the CBS Network could eventually sell its signals directly to cable operators, bypassing the affiliated stations that now broadcast its shows. Cable operators have asked him about that, he said in response to a question. “Down the road, that’s something that could happen, but maybe five or 10 years down the road” — or once the network’s long-term deals with affiliate stations expire.
Such a move would be a radical jolt to the TV biz. Asked later in the session what options the local stations would have in that case, Moonves insisted that the relationship between the CBS network and its affiliates is good (although it could become “obsolete” in the future) and he’s not thinking about changing it anytime soon.
Moonves said his quest for cash from cable operators in return for retransmission consent is progressing. CBS is in active, “productive” conversations with a few of the major MSOs, he said. The network expects to have a fairly important announcement in a few weeks and, ultimately, an additional $200 million flowing into CBS coffers that will drop straight to the bottom line.
“We have not yet pulled our signal off of any cable systems. I hope it doesn’t come to that; I don’t think it will. It’s not a good time (to take CBS off the air),” he said. But, “The CBS network provides a good service to the cable operators and should be paid for it.”
Asked about CBS Films, he said the division, launched last year, has ramped up to 22 employees and is in active development on a number of projects, with production likely to start in the spring. The division will put out three to four movies a year initially, all budgeted under $50 million, with most falling in the $10 million-$40 million range. It will distribute its own films domestically and choose a partner for international.
“I’m very excited about expanding our content business,” Moonves said.
The studio’s first major announcement was acquiring film rights to bestselling author Vince Flynn’s series of novels about counterterrorism operative Mitch Rapp. The studio hopes to create an action- thriller movie franchise around the character.
Moonves says using CBS’ rich resources — TV and radio stations plus billboards — to market the movies will help make the film venture “cost effective.” Product will be fed to CBS’ premium cable network, Showtime, whose own output deals with several key studio suppliers expire at the end of next year. Instead of going to Showtime, the films will flow to a new movie channel being created by Paramount, MGM and Lionsgate.
Showtime still has output deals with the Weinstein Co. and Summit Entertainment, the studio behind current box office phenomenon “Twilight.” The four-year Summit pact may cover as many as 42 pictures, including possible “Twilight” sequels.
Moonves said Showtime’s success depends less on movies and more on its original programming, which has been on a bit of a roll with shows like “Weeds,” “Dexter,” “The Tudors” and “Californication.”