Those hoping that CBS’ dominant shareholder Sumner Redstone might sell the company, or approve a big acquisition, will have to keep waiting based on comments CEO Les Moonves made to analysts today in his quarterly earnings call.
The ailing 92-year-old chairman emeritus “is for many years giving me free rein” to run the company, says Moonves — who last week was also named CBS’ chairman. “It’s going to be business as usual. We’re in great shape….There’s stability here, and there’s going to be for many years to come.”
Moonves crowed about the health of advertising — which he says is “as robust as we’ve seen in a long time.” He also sought to dispel investor concerns that it might slow along with the global economy, raising the possibility of a recession.
“Back in 2008 we saw it coming,” he says. “It was there in bright shining lights. We’re not seeing anything remotely resembling that now. We have visibility into Q2 with our advertising, and it’s normal if not more aggressive than normal. That’s why I’m so optimistic about the upfront” market in the late spring.
Moonves also salivated over the opportunity to collect big bucks from this year’s political campaigns. “There’s a lot of uncertainty, which is just the way we like it,” he says.
The CBS chief says he’s encouraged by the possibility of collecting revenue from the FCC’s auction to wireless broadband services of some airwave spectrum now used by broadcasters. Some of the company’s stations have volunteered to let regulators sell the spectrum, sharing the proceeds.
“It’s a compelling option to have and could serve as a lucrative source of added cash down the road.”
Moonves also is upbeat about digital initiatives including CBS All Access, which costs $5.99 a month and includes ads. About 85% of CBS affiliates are part of the system.
The company has considered an ad-free version for about $9.99 — which he calls “a great possibility.”
He adds, though, that “at Hulu it hasn’t worked that well yet with the ad-free service.”
The CEO seems content with his CBSN digital news service which he says attracts younger audiences than traditional newscasts. The average viewer for cable news “is over 70. Broadcast television news at the three networks is around the low 60s. And CBSN it is about 20 years younger. But in the news business, a 40-year-old is a young person.
Moonves was less enthusiastic about the prospect of expanding his small movie production operation.
“We do two or three a year and we’re very pleased with what we’re doing. You’re not going to see us invest in a $150 million movie because there are no guarantees, and not every movie is Star Wars.”