Posted by chicagomedia.org on September 10, 2008 at 07:34:32:
CBS CEO Sees Advertising Climate Improving Over Next 2 Yrs
CBS Corp. (CBS) Chief Executive Les Moonves told investors Tuesday that the local advertising climate, hampered by an economic downturn, should improve over the next two years.
Moonves, speaking during the annual Merrill Lynch Fall Media Preview in Marina Del Rey, Calif., reiterated his frequent assertion that "network television is the only game in town if you want to aggregate a large audience." He added that automotive advertising "will never be as bad" as it has been in 2008.
The comments come at a tough time for CBS, which has seen its market value slide by nearly 40% so far this year, as the slowing economy has put a pinch on advertising revenue, hurting the company's profits.
Following his company's recent acquisition of Web-based information provider CNET, Moonves said CBS has seen no signs of a slowdown in online advertising.
He also said retransmission negotiations have begun with such large cable and satellite providers as Cablevision Systems Corp. and DISH Network Corp. In 2009 and 2010, the company's deals with DirecTV Group Inc., Comcast Corp. and Time Warner Cable Inc. will be up for renewal. Moonves said the company still feels bullish about getting greater compensation for its broadcast signals, in deals that would include elements other than cash.
He also said CBS still plans to stay in the radio business, though he wouldn't rule out selling the radio group at some point. "I suppose that's possible," he said.
Although radio isn't a high-growth business, Moonves said it does generate cash that helps CBS to pay a dividend to shareholders. The company announced plans in July to sell 50 radio stations in mid-sized markets to increase its focus on such large U.S. markets as New York, Los Angeles, Chicago, Philadelphia and San Francisco. The company sold 40 stations in several smaller markets in 2007.
"I think if I'd listened to people who said, 'Les, don't sell off the radio stations in the smaller markets, don't sell them and use the proceeds to invest in the Internet,' I think I would've been dead," Moonves said.
Moonves also echoed the high hopes that CBS Radio Chief Executive Dan Mason has for Arbitron Inc.'s Portable People Meter service, saying PPM has identified large numbers of radio listeners who haven't been measured by the traditional diary system.
CBS Radio has also changed sales practices that had been hampering the unit's effectiveness, the executive said. "We had one guy selling (ads for the New York) Mets, for WFAN, and we had another selling (ads for) the Yankees, on WCBS - to the same client," Moonves recalled. "And that was really dumb. So we're not doing that anymore."
Moonves added that the company's television-syndication cycle looks strong for 2009, with contributions from "Everybody Hates Chris," "Ghost Whisperer" and its new international deal for the "CSI" franchise, among other programs.
(CNN)