CBS weathers rough week in news

Couric rumors, Rather lawsuit cause frenzy

It’s been a tough week for the PR execs at Black Rock.

CBS News found itself in the crosshairs of a mini media frenzy in the last few days, fueled by speculative reports about what the Eye’s top brass may or may not be planning to do with its newsgathering operations and with its high-priced “Evening News” anchor Katie Couric.

On Thursday, however, CBS got at least some positive news of its own with a partial win when a New York judge dismissed four of seven causes in the $70 million breach-of-contract lawsuit filed against the company by former “Evening News” anchor Dan Rather. Judge Ira Gammerman of New York Supreme Court also dismissed CBS Corp. chief Leslie Moonves, CBS and Viacom chairman Sumner Redstone and former CBS New prexy Andrew Heyward as defendants in the suit.

“With respect to the few remaining claims, relevant to his contract, there are no facts to support them, and we expect them to be dismissed when the discovery process is complete,” CBS said in a statement.

The suit stems from Rather’s forced exit from CBS in 2006 following his involvement in the scandal over the use of questionable documents to substantiate a 2004 “60 Minutes II” report critical of President George W. Bush’s service in the National Guard in the 1970s.

Rather’s lawyer, Martin Gold, was quick to point out that while the judge dismissed the allegations of fraud and defamation, the “essence” of Rather’s breach-of-contract suit was allowed to proceed, along with the allegation that CBS failed to live up to its fiduciary duty to Rather, which could allow him to recover punitive damages at trial.

Settling old CBS News problems is likely to be much easier for the Eye in the coming months than grappling with the division’s current headaches. On Wednesday evening, the Wall Street Journal posted a report on its website that Katie Couric is likely to leave the “Evening News” anchor chair before her contract expires in 2011, possibly as soon as early next year after the presidential inauguration.

CBS execs discredited the report as speculation with a tabloidy touch — something Couric has drawn regularly since she arrived at CBS News with a five-year, $75 million contract after a storied run as co-anchor of NBC’s “Today.”

It’s no secret that neither CBS nor Couric have been happy with the slumping perf of “Evening News” since she moved into the anchor’s chair. Insiders deny that any formal plan for Couric’s departure has been hammered out.

People familiar with the situation believe reports of her possible departure may have emerged as a result of a recent meeting between Couric, CBS supremo Moonves and other CBS News execs. The powwow was meant to plan a broad strategy for “Evening News” for the year ahead, but could have led outsiders to conclude that something more concrete was in the works.

Moreover, Couric had the unfortunate timing of moving into “Evening News” at a time of significantly eroding viewership for all three nightly newscasts. During the just-wrapped first quarter, all the broadcasts suffered notable ratings declines vs. the first quarter of 2006, before Couric took over “Evening News.”

As for CBS’ newsgathering operations, the perennial rumors about a tie-up between CBS and CNN were revived Monday evening with a report on the New York Times website.

CBS execs strongly denied the suggestion that the Eye would “outsource” its reporting to the all-news cabler. The two camps have had talks again in recent months about the possibility of pooling resources in far-flung hot spots like Baghdad.

The deal would seem to make sense for both companies, but impediments include such issues as rights to the footage — both CNN and CBS sell news feeds to a range of domestic and international outlets — and divergent union rules for broadcast news, a la CBS, and CNN’s cable operation.

The Couric and CNN stories and the subsequent chatter had certain CBS execs spitting fire. But others were more sanguine about the unwanted attention, noting that it comes with the territory for the Tiffany net.

“Isn’t there a way we can monetize all of this buzz?” one Eye insider quipped.

Wall Street may have felt a little empathy too, as CBS shares closed Thursday up 9¢ to 22.07.

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