WCBS Gets $1M For Super Bowl Spot
CBS Corp. President-CEO Leslie Moonves is bullish on the current quarter after reporting record third quarter results—and says the company is “set up to perform even better in 2013.” One reason for that is the Feb. 3 Super Bowl broadcast, which is not only a hot seller for the CBS Network, but for the O&O stations as well.
In his quarterly conference call with Wall Street analysts, Moonves said spots on the network broadcast have already been sold for “north of $4 million” for 30 seconds. “And, in New York alone, we sold a spot on WCBS for just shy of a million dollars. Just think of that—a million dollars for a local spot in one market. Pretty incredible,” Moonves said.
And while there may be talk at other networks of scatter pricing being a bit soft, the CEO insists that’s not the case at CBS. “Scatter demand remains very strong and is, in fact, now building. Yes, our pacing in network advertising is accelerating as we speak,” Moonves said. Both he and EVP-CFO Joe Ianniello stated that scatter is up mid-teens.
With local TV revenues up 7% in 3Q, Ianniello said a lot of political advertising was placed closer to Election Day than had been expected, so 4Q is pacing up over 20%.
Local Broadcasting segment revenues were up 1% to $661 million in 3Q, with a 5% drop by CBS Radio countering the 7% gain for the O&O TV group, which was driven by political advertising and retransmission fees. Operating income before depreciation and amortization (OIBDA), however, rose 16% to $213 million.
Entertainment segment revenues — including the CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Films, and CBS Interactive — were up 3% to $1.68 billion, driven by higher TV program license fees and higher retransmission revenues. Advertising, however, was down, blamed in part on the Summer Olympics on NBC and preemptions for the national political conventions. OIBDA dropped 5% to $384 million.
Retransmission fees and reverse comp from affiliates are expected to continue to drive revenue growth in coming years. Moonves noted that CBS recently signed retrans deals with DirecTV, Cablevision and AT&T that, together with a Dish Network deal earlier this year, amount to 40% of the footprint of the O&Os.
“In total our new retrans deals were done on terms significantly higher than anything we’ve done before and will help us get to our stated revenue goals even quicker than we’d hoped,” he said. Moonves noted “heated” and “intense” negotiations, including personal dealings with Cablevision CEO James Dolan, but said he was happy that CBS never had to pull any of its signals.
Another 20% of the footprint is up for renewal in 2013.
“As we recently said, our new target is to reach at least $1 billion in revenue from retrans and reverse comp by 2017 — and we are confident that we will be there ahead of that,” Moonves declared.
Including the upcoming retrans deals and reverse comp from affiliates, Ianniello told analysts that CBS will approach the half-way point to that $1 billion in 2013.
Earnings performance for CBS Corp. in 3Q beat Wall Street expectations, with net earnings of a 3Q record of $391 million, or 60 cents per share. Excluding a special debt extinguishment item the earnings per share worked out to 65 cents, beating the analysts’ consensus by four cents. Revenues were up 2% to $3.42 billion, also a 3Q record.
With the new television season underway, Moonves said “CBS continues to be the most-watched network on television.” He said the season got off to an unusual start, with ratings all over the place — which he attributed to people increasingly time-shifting their viewing with DVRs, streaming and VOD. “Nielsen is doing a good job of finding ways to measure this viewing, but not all of it is captured yet,” he said.
With disruptions for presidential debates and the unusual comp from Ashton Kutcher’s debut on Two and A Half Men last Fall, Moonves insisted that ratings thus far are “atypical.” He also noted that there is a lot of “sampling” of new shows at the beginning of the season.
“We fully expect as the season goes on — and when the season ends — we will once again win in viewers, in 25-to-54 and be right there in 18-to-49 as well,” he said.
Look for CBS Corp. to start cutting deals with streaming companies, such as Netflix and Amazon, which will license past seasons of current CBS Network and Showtime shows. To date CBS has only licensed series that are no longer airing on its networks, but Moonves is now convinced that streaming past seasons of current shows can be beneficial to building ratings for the current season, not to mention bringing in more revenue.