Les Moonves Decides to Stay the Course

At the Deutsche Bank media conference, CBS chief Les Moonves showed remarkable optimism, saying that the economy is pushing him to figure out how to make the business better and that "we are at the top of our game."

Looking towards the upcoming pilot season and upfront ad sales period Moonves boasted about the success of the company's current TV shows and the fact that ratings are up. This means that the company has fewer spots for new shows so it can save money developing pilots.

But there are still worries about ad sales -- Moonves says his concerns about the upfronts is volume. Many analysts expect overall ad sales to drop by nearly 10 percent this year. So Moonves is looking for clever ways to lock in budgets and offer advertisers across-the-board packages. Again, optimistic, Moonves said: "Eventually, they’re going to have to spend some money again. The only way out of this is to do some advertising."

CBS ruled out a merger with CNN, saying that the much-rumored deal is "not in the cards." After many discussions with the cable network Moonves says "it has appeared to be unmanageable." (In contrast, Monday at the same conference Time Warner's (TWX) Jeff Bewkes said that CNN isn't ruling out a merger with CBS, saying "maybe we could help."

Moonves says that he thinks of CBS not just as a content company but also as a distribution company and that the next form of distribution is the Internet.

Many would say that media conglomerates are wise to distribute through a range of new pipelines other than their own, but CBS is determined to own the distribution as well. Moonves boasted about the company being number seven online thanks to its acquisition of CNET. The question remains whether that platform can justify the company's $1.8 billion price tag.

As to the company slashing its dividend yield, Moonves won't let investors forget that it's still yielding over 5 percent, making it the highest-yielding media company. But its stock and market cap is still just a fraction of its competitors -- CBS stock now trading less than $4. Moonves insists he doesn't mind, though investors are surely feeling the pinch.

Comments

[Jim Jackson]

It is time for Les Moonves to go.

2009 Mar 06 06:10 PM