MediaFile

CBS: Get used to growth

May 4, 2011

CBS put on a big show in yesterday’s quarterly report, blowing out estimates on both profit and revenue. On the call that followed, Sumner Redstone called Les Moonves a “genius,” and Moonves called broadcast TV “the best game in town.”

Here are some notes from last night’s call:

  • CBS, which said it would double its dividend, also plans to repurchase $250 million in stock this quarter. A nice bonus for shareholders who have already seen the stock rise by about 35 percent this year.
  • Scatter rates, or prices for last-minute commercial buys, are up more than 40 percent in some cases for CBS. That’s a stunning number. Given those sorts of prices, Moonves is talking about “solid” double digit increases in upfront ad market next month.
  • CBS is putting together six or seven fewer pilots than normal this year, showing that it’s pretty happy with its schedule right now (So far this season, CBS has declined the least of the big four broadcast networks in total household audience)
  • Basically, investors and analysts should get used to these sorts of results, CBS suggested. Moonves said he was “confident” the first quarter’s performance would be “sustainable.”
  • Part of that momentum is due to revenue CBS is getting from retransmission deals, which has been a big focus for Moonves. He said CBS would reach its goal of retransmission fees of $250 million by next year.
  • What is more, “meaningful” revenue from its streaming deal with Netflix will start in second quarter.
  • As for the outdoor division, Moonves said “we have no great intent to sell” it to JCDecaux, the French company that has it would be interested if CBS Outdoor came up for sale.  “Mr. Decaux, who we know very well and we like, makes statements about how he’d like to buy our outdoor company. As you know, our outdoor results as you can see are growing substantially quarter after quarter,” Moonves said on the call. “We are here, he has our phone number. If he wants to make an offer, we will always listen to it. It’s not our intent to aggressively sell.”
  • And finally, there was bound to be a question about “Two and a Half Men” on the call. Moonves dodged it. “We don’t know what the resolution is right now. There are obviously a lot of moving pieces,” he said. He then added, “It’s an important show to us, but the good news about the CBS schedule is we are not dependent on a single show on any single night of the week.”

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