Analysts Have Few Questions About Changes at CBS

First earnings call after departure of Moonves
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In the wake of the ouster of CBS’s powerful CEO Les Moonves, there were relatively few questions about management changes on the company’s third quarter earnings call Thursday evening.

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As on past calls, the possibility of a combination with Viacom was taboo.

Moonves was removed following sexual harassment allegations and a dispute over the company’s future with members of the the Redstone family, which controls CBS and Viacom. Since then, the company has named long-time COO Joe Ianniello as interim CEO, Showtime boss David Nevins was the company’s chief creative officer and Showtimes Christina Spade became CFO.

A couple of other senior CBS veterans have also announced plans to retire.

Jessica Reif of Bank of America Merrill Lynch noted that the company has appeared pretty stable amid the turmoil. She asked if any priorities had shifted and if future management changes would occur.

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Joe Ianniello

Joe Ianniello

“We've certainly made some changes here at the company, but I think Chris and David have been with the company for several years, and any other changes, these are seasoned veterans, very talented and deep bench, and I think we're demonstrating that,” Ianniello said.

“As far as our priorities are going, our priority is always to first and foremost reinvest in our business, and what that is that's content creation, because the success we're having is driven by the content pipeline that we were just highlighting. And so, I don't see any focus change in that philosophy. It's always been that way,” he said. “So again, down the road, I mean, I don't see any other significant changes. Like I said, I'm pretty proud of the team we have assembled here. And I want to give them exposure to Wall Street, so you all can see how deep and talented they are.”

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Though Moonves was regarded as a programming whiz. Nevins said the company was continuing to ramp up its investment in programming.

“Taken together, the CBS Television Network, CBS All Access and Showtime form a powerful programming powerhouse, one that not only fuels the financial engine that drives this company, but it also makes the CBS corporation one of the most attractive places for Hollywood creatives to bring their best work,” he said.

Nevins said CBS would be producing 76 series, up from 65 a year ago and more than double its output of five years ago.

“By producing more shows, we have more content to license, particularly in the international marketplace. And we also have more content to roll out on our owned platforms, which in turn is accelerating the growth of new subscribers to Showtime and All Access, and increases retention of our existing subs,” Nevins said.

Nevins said that most of the shows came from CBS Television Studios.

“Our philosophy has been to sell a project wherever it has the best chance to thrive,” he said, adding “without a doubt, the CBS Television Network is the best place to launch and sustain hits that feed the monetization pipeline throughout the world for years to come.”

Four new shows on the CBS broadcast network have already been picked up for the full season--and the company owns all four, he said, ticking off FBI, God Friended Me, Magnum P.I. and The Neighborhood.

Another CBS produced show, A Million Little Things, was picked up for the full season by ABC, he added.

Showtime is increasing its programming output, quarter-by-quarter the number of originals on CBS All Access is growing and company also has four shows on Netflix.

“Without a doubt, the CBS Television Network is the best place to launch and sustain hits that feed the monetization pipeline throughout the world for years to come,” he said.

On a separate subject, Ianniello said CBS could have a record year in terms of political advertising. Moonves, On that front, his predecessor once crowed about how good Donald Trump would be for CBS financially by stimulating campaign spending

"I think we have a chance to have a record-setting year even in the presidential one which we set in 2016," he said. "But it's going to be a hell of a year for local political advertising."

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