CBS spelled out in an SEC filing the terms of the four-year production arrangement available to company chief Leslie Moonves if he — or, presumably, chairman Sumner Redstone — decide it’s time for him to give up the CEO gig when his contract expires in February 2015. The agreement, reached Wednesday, will enable Moonves to produce television, film and digital media properties — and CBS will invest up to $3M a year to provide staff and infrastructure. ”These amounts represent business expenses and not compensation to Mr. Moonves,” the filing says. Moonves would get $1.5M a year to be executive producer of TV productions, offset by fees he’d get if CBS orders any of his shows. The rates CBS would pay would be “generally consistent with those paid to other top producers with Mr. Moonves’ skill, experience and record of success.” He’d be required to submit “a minimum number of projects per season” — but CBS would also be required to order at least three series over the four years. License fees for each series would be “on the most favorable terms of any other deals between the Company’s CBS Studios unit and its profit participants during the term.” If CBS doesn’t like even three of his productions, then he could collect “penalty payments” at the end of the deal.
For films, CBS would get first look at Moonves’ productions. If CBS likes what it sees, then Moonves would get a fixed fee plus “contingent compensation” if the film is profitable. Those terms also would be based on profit-sharing arrangements CBS Films has with other top producers. That’s not all: Moonves can collect more from income tied to music publishing, soundtrack and merchandising net receipts. CBS also would have a first-look deal for any “concepts, properties or business plans” Moonves has for digital media “subject to a separate agreement to be negotiated between the parties.” CBS says the production terms are designed to provide Moonves with an incentive to stick around. But CBS notes that the deal is “contingent upon a number of preconditions” and “there can be no assurance that such a production agreement will ever be consummated.” What’s more, “there has been no such notification by Mr. Moonves” that he wants to step down and produce.