“Concerns over potential disruption following Les Moonves’ exit have significantly abated as Joe Ianniello has confidently stepped into the interim CEO role (and by all appearances has the inside track for a permanent posting),” wrote Cowen & Co.’s Doug Creutz.
Ianniello, as the longtime COO of CBS, has spoken for years on analyst calls, but in a limited fashion. Yesterday, after CBS reported strong third-quarter results, he led his first call as the interim head of the company.
Communicating a company’s message to the investment community ranks near the top of the list for any CEO, and former CBS boss Les Moonves was a master at messaging. The onetime actor boomed his upbeat pronouncements during earnings calls with analysts, always seeming half-bemused by the intensity of his own charm offensive. Ianniello has his own, similarly forward-moving style, and apart from a few small hiccups, conveyed a sense of consistency about a company that has been delivering strong financials of late, despite all of the Baroque corporate drama.
For Creutz, the good news went beyond the numbers and Ianniello’s performance. “We think the promotion of Showtime CEO David Nevins to CCO of CBS helps assuage concerns about Ianniello’s ability to manage the creative side of the business,” he wrote. “In addition, we think the company has made valuable additions to its board, including appointing Strauss Zelnick (who we are quite familiar with, and think highly of, from his role as CEO of Take-Two) as Interim Chairman.”
In a section of his report titled “A Welcome Respite,” B. Riley’s Barton Crockett had a positive response to the new team. “CBS has nothing to say at this juncture about the timing of finding a permanent new CEO and resolving the investigation of former CEO Moonves,” he wrote. “For now, Joe Ianniello is President and Interim CEO but we believe he is making a very credible case for the permanent position. With so many distractions, we find it encouraging, and a testament to the strength of the business currently, that the numbers were fine and betrayed no meaningful signs of distraction.”
Michael Nathanson of MoffettNathanson brought the perspective of someone who has covered the company over the long haul. “It was odd not to hear the always energetic and eternally optimistic voice” of Moonves, he wrote. “However, this call was more informative than most prior calls because it included several important new speakers and focused on how CBS is thinking strategically about its future in a more detailed way.”
Guggenheim’s Michael Morris described the call participants, which also included new CFO Christina Spade, as a “refreshed leadership team.” Management, he added, spoke persuasively about “focused content creation strength (76 series in production up from 65 a year ago) and aggressive distribution across television and digital platforms in the U.S. and increasingly internationally.”
One caveat noted by Morris, despite the fact that he rates the stock a “buy,” is the fact that management uncertainty and likely M&A have become drags. “We believe investor focus on a potential recombination with Viacom and recent uncertainty around leadership have weighed on sentiment for CBS shares.”