Moonves: CBS Would Yank Affil Signal If Necessary

CBS Corp. CEO tells Credit Suisse media conference that affiliates need to pay up for top network programming

By Claire Atkinson -- Broadcasting & Cable, 3/9/2010 7:34:08 PM

CBS Corp. CEO Les Moonves said March 9 that he wouldn't hesitate to yank the network signal from an affiliate if it didn't play ball on sharing retransmission consent fee revenue. 

Speaking Tuesday at the Credit Suisse Global Media & Communications Convergence Conference in Palm Beach, Fla., Moonves said CBS did just that in Jacksonville, Fla., four or five years ago when the station said they ought to be paid by CBS. "We ended the affiliate agreement, and they went from the No. 1 to the No. 5 station," he said. "There are alternatives. I worked hard to make CBS the number one network. The affiliates are sharing the $600 million NFL. I need something back for that."

Moonves, who has repeatedly said income from retransmission dollars will be in the region of $250 million by 2012, told investors at the conference that figure now might be too conservative, though he didn't offer a larger number.

Separately, CBS local station ad revenue appears to be showing signs of improvement.  "A year ago everyone was saying CBS has 65% of revenue from advertising," Moonves said. "Now they're saying that's pretty cool." He said before political dollars, stations' pacings are in the high teens. He also said February auto-ad dollars were up 80%.

Moonves also praised the company's relationship with Apple, with which it is negotiating on book and TV rights (CBS Corp. owns book publisher Simon & Schuster). Moonves said CBS might be ready to sell non-premium content at 99 cents, a figure that Apple has been pushing to help promote iTunes sales of TV product.

Moonves was the second speaker of the day to take an opportunity to bash on the News Corp.-NBC Universal-Disney joint venture Hulu, following up on comments made earlier at the conference by Viacom CEO Philippe Dauman. He said CBS had opted to retain control of its content by not participating with the video site, which offers broadcast network content soon after it airs on TV. "We get to keep 100% of the dollar; that's why we were glad we didn't do Hulu."

Moonves said the company is working with MSOs, agencies and Nielsen to make sure online revenue from TV is dollars for dollars, rather than the proverbial digital pennies. When asked about whether the C7 metric for commercial ratings had any future, Moonves said he supported that but added it was unlikely to take-off any time soon.

"It took us a couple of years to get used to C3 before you realize that's inaccurate," he said. "Nielsen is bending over backwards trying to figure out the appropriate measurement."