CBS Corp. CEO Leslie Moonves touted the company’s disciplined approach to programming costs Tuesday at the Goldman Sachs 20th annual Communacopia Conference.
Drawing contrast to the increased investments the Eye’s broadcast rivals Fox and NBC are making on their fall schedule, Moonves noted the network doesn’t have to spend as much to maintain its ratings, citing the introduction of just five new series this fall.
“We’re very disciplined,” he said. “We haven’t overspent. It’s about quality, not quantity.”
He referenced the big bets Fox is putting down this fall on “The X Factor” and “Terra Nova” to make its fourth-quarter viewership on closer level to the dominance the network achieves from January through May with “American Idol.” Moonves also referred to the additional $300 million NBC’s new parent company, Comcast Corp., pledged to put into primetime development — an investment he deemed wise.
“They’re in fourth place, they have to rebuild,” he said of the Peacock. “It’s a very smart thing to do.”
Moonves also gave notice to the NFL that while football remained a valuable franchise for CBS, the eight-year $15 billion deal ESPN struck earlier this month with the league may be too rich for his blood.
“We’re aware the costs are going to go up,” he said, noting CBS still has three years left on its pact to broadcast AFC games. “It’s not going to be what ESPN paid. We know that it’s going to cost us more.”
Moonves also reached into recent CBS history to demonstrate his fiscal prowess, noting the 2009 cancellation of drama “Without A Trace,” a series the network had only partial ownership of along with Warner Bros. While costs on “Trace” had risen to $4 million an episode, Moonves said replacing the series with another that CBS had 100% ownership of, “The Good Wife,” at less than half the production expense and similar ratings, turned into a true coup.
Said Moonves, “Think of the difference in cost to the network.”
The Eye CEO also projected over the next several years he expected to collect hundreds of millions from CBS affiliates as the net claims a portion of the retransmission consent fees that stations are now receiving. But this new stream won’t come without some friction according to Moonves, though the network hasn’t seen much tension with its affiliates to date over these negotiations.
“You haven’t heard of fights, we’ve kept it quiet,” said Moonves. “Probably the operative word is yet. There may be some disputes as you head into the future and somebody thinks we’re overcharging or we don’t think we’re getting paid enough, but right now we’ve been able to come to these deals with our MSOs and our affiliates.”
Moonves didn’t specify what entity might be the source of the dispute. He said CBS has completed 25 deals with individual affiliates to share in their retrans coin, and the network is about to finalize its first retrans-sharing deal with a larger station group.
CBS owns nearly 40% of its 220 affiliates in the U.S.