Stern’s exit a black Eye

Shock jock spurn hit CBS' profits

Call it Howard’s revenge.

The shock jock squeezed profits at nemesis CBS Corp. as radio revenue at the new standalone company slid 6% last quarter. Eye cited Stern’s defection to Sirius and a gloomy ad market.

As a result, CBS profits of $227 million were about flat with the year before despite solid TV perfs and a stunning turn in outdoor advertising.

Revenue rose 4% to $3.6 billion.

Radio aside, Wall Street was upbeat on the numbers and on CBS topper Leslie Moonves’ talk of boosting dividends and buying back stock.

Moonves also said during a conference call that the new CW network now clears 85% of the nation and will hit 90% by the upfronts. He expects it to be profitable from day one.

CBS Corp.’s every move, and that of sister Viacom, is being closely scrutinized for hints at management thinking and strategic direction as investors still seek a comfort level with the controversial Jan. 1 split.

Moonves has been active, shaking up the news department, merging UPN with the WB and seeking cash from distributors for retransmission consent.

Like most of his peers, he’s been rapidly inking online content deals. He sees Net pacts bringing in “tens of millions of dollars” over time.

Moonves predicted $3 million in revenue this year from selling CBS content to Verizon. And he said the Eye took in $4 million streaming the NCAA tournament on the Internet last quarter.

He stated categorically that CBS won’t pursue Univision. “We are not looking for an acquisition of that size,” he said.

Television — CBS and UPN, stations, production, syndication, Showtime and College Sports TV nets — saw revenue rise 5% to $2.5 billion. Operating income grew 3% to $383 million. Company’s biggest division by far saw a boost from the second-cycle domestic syndication sale of “Frasier.”

Affiliate fees rose 6%.

Station sales were up 3%. Revenue at the CBS net nosed up 1%.

Moonves reiterated his previous prediction of a 4% overall increase in the upfront, with CBS outpacing that figure. Given the strength of network television, he said, that outlook might be conservative. As for the CW, the merging of two nets into one “tightens inventory and makes it more valuable.”

He called Katie Couric “a major step forward in our news division,” where he expects significant improvement, as every fresh ratings point “can mean millions of dollars.”

Radio revenue eased to $435 million. Profit fell 14% to $163 million.

It’s the one CBS biz “that is not yet achieving acceptable growth,” Moonves acknowledged. Turning radio around “is one of our top commitments.”

He said again that the Eye will be selling some small market stations.

CBS this week hired gabbers Opie and Anthony to fill Stern’s slot in seven major markets. Gregg “Opie” Hughes and Anthony Cumia are under contract with Sirius’ rival, XM Satellite Radio. They will work on both platforms, broadcast and satellite.

In response to a question, Moonves said the duo will be able to promote XM on CBS’ airtime.

“They are allowed to mention XM. It was a part of the contract. They were XM property. We don’t think it hurts us. I’m not at all concerned,” he said.

CBS is suing Stern for promoting Sirius on his CBS show without permission while still on CBS’ payroll, as well as for not disclosing alleged financial incentives to do so that were embedded in his deal with Sirius.

Outdoor advertising revenue rose 5% to $452 million. Income soared 170% to $44.5 million.

Paramount Parks, which will be sold in the second half of the year, and Simon & Schuster publishing, together saw revenue up 12% to $188 million.

Losses narrowed to $13 million from nearly $20 million.

CBS shares eased 0.87% Wednesday to close at $25.15 after a sharp run-up the day before.