With financial support from Amazon and overseas networks, the Stephen King drama was profitable even before it aired — and it cracked the code for CBS to schedule much more original programming in the summer. Under The Dome “is a new form of entertainment,” CBS chief Les Moonves told analysts in a conference call to discuss Q2 results. While the network would have been OK if it hadn’t caught on, its success means it “will bring a ton of profits into the third quarter” and “is going to be very profitable for years to come.” Amazon CEO Jeff Bezos called Moonves to congratulate him on the performance: The e-retailer streams episodes four days after they first air on CBS, and it has become Amazon’s most-watched program. Now, Moonves says, “you’ll see every network try to replicate the model….There’s a huge appetite.” About a third of the series’ viewers watch on on DVRs or online. That would help to make it a hit even if it aired during the conventional prime time season. “It’s doing numbers that would have made it the second highest drama on network television,” Moonves says. “It means we’re going to program all year long, from September to September.” CBS announced this week that it has renewed the series for a second season.
TCA: Les Moonves Hits Back At “Flat Is The New Up” And “Bastard Child” Comments, Agrees Broadcast Shows Don’t Get Respect
NBC topper Bob Greenblatt raised a few eyebrows with his comments during NBC’s executive session on Saturday that “at this point in our business, flat is the new up” in broadcast ratings and that “broadcast now is the bastard child” of television as he suggested that broadcast series don’t get the respect they deserve. “I don’t necessarily agree with (the ‘flat is the new up’ assessment), but every network has their own point of view about it,” CBS Corp. CEO Les Moonves said at TCA today. “We’re confident we’re going to be up this year. We were up last year. Yes, we had the Super Bowl, but I don’t necessarily agree with that statement. I also don’t think we’re the bastard child of the entertainment business.”
He later did list arguments in support of Greenblatt’s complaint that network shows don’t get much respect. “I know what he meant. He meant when it comes to the Emmys, the networks don’t get respect in terms of — look, they’re competing against some phenomenal programs. It’s hard to put The Good Wife up against Game Of Thrones. Game Of Thrones probably cost three times as much and takes three times as long to shoot. And it’s a brilliant good show. I love it as much as anybody. But there are some terrific shows on network that do get passed over, and the competition from cable in terms of that has become pretty extreme. And so the cable shows get a lot more attention for a lot fewer numbers.
CBS chief Les Moonves rallied the troops today as his company prepares for the possibility that its stations will go dark as early as Thursday at 9 AM ET on Time Warner Cable systems in New York, Los Angeles and Dallas. There’s “a very real threat” that it will happen — and “possibly” also affect Showtime — Moonves said in a memo to employees. Negotiators got a little additional time to cut a deal when the FCC informed them that the stations couldn’t go dark until Thursday, not Wednesday night as they had assumed, to comply with rules that bar such a move during a ratings sweeps period. Still, both sides continue to talk tough. “It’s not like Time Warner Cable doesn’t have the money,” Moonves wrote today. “Cable is a very, very profitable business, and Time Warner Cable can certainly afford to pay CBS a fair rate for our programming without passing any added cost on to its customers.” The way he figures it, TWC charges subscribers “more than $20 a month for broadcast programming.”
CBS “only realizes a tiny fraction of that,” and needs more because “our costs for programming, news operations and sports contracts are growing all …
Does this mean that the CBS chief believes that his stock has topped out, and it’s time to bail? Not according to a CBS rep: Les Moonves‘ estate plan — it’s called a 10b51 –provides for stock purchases and sales to automatically take place at set times, and this happens to be one of those times. According to an SEC filing, this week Moonves acquired 450,000 shares from options at $23.19 a share (or $10.4M), and sold 675,000 for prices ranging from $49.02 to $49.51 a share (for $22.1M). No matter what motivated the sale, that’s a tidy profit with CBS — which closed today at $50.06 — hovering around its all time high (measured since 2006 when it was spun off from Viacom). But many prominent execs use automatic triggers for their estate trading to avoid sending an unintended signal to investors who keep an eagle eye on insider trades to see when the people who know a company best believe that the stock price is about to change its trajectory. Moonves can’t avoid the spotlight when it comes to financial affairs: His $62.2M compensation package for 2012 made him one of corporate America’s highest paid execs.
EXCLUSIVE 10 AM… UPDATEd 12:30 PM : Deadline has learned the meetings were an intimate preview of the new Xbox One capabilities before next week’s E3 confab where secretive Microsoft will unveil details of the device’s technology. Microsoft CEO Steve Ballmer was escorted by his entertainment studios president Nancy Tellem for the visit late last week to lobby her closest Hollywood pals: her former boss CBS chief Les Moonves, Sony TV boss Steve Mosko, and WME co-CEOS Ari Emanuel and Patrick Whitesell. It’s all part of Ballmer’s effort to drum up exclusive content after Microsoft intends to launch 40+ new voice-controlled customized TV and entertainment apps on Xbox One. But it was also more, one insider tells Deadline, “to reiterate Microsoft’s commitment to transitioning its business to devices and services and to explaining that Hollywood entertainment is a big part of that. Microsoft in the past has just dipped a toe but now has a real commitment.” Tellem wanted to give Ballmer 3 different perspective: the broadcaster, the independent producer, and the agent. Deadline has learned that Ballmer touted “what we could do with” the Xbox One in sports, music, reality and scripted programming, promising execs that they’d see more sophisticated technology and that his company “doesn’t want to be a cable channel”. He also met Tellem’s Santa Monica team for the first time and outlined his vision for a new Xbox One world. Ballmer’s trip to Hollywood will only anger more hard-core gamers who already were miffed by Microsoft’s focus on entertainment when it unveiled the product on May 21. (Xbox One will be on store shelves later this year). The hard-core gamers fear Microsoft sees its new Xbox One more as a souped-up Internet-connected, voice- and motion-controlled cable box than a next-gen gaming console.
The CBS chief and his colleagues introduced their upfront sales pitches to advertisers today by taking a victory lap — a contrast to other networks’ efforts this week to promote their digital initiatives. With CBS in first place, Les Moonves says that “broadcast (TV) is not an old medium being left behind by new ones. Far from it. We’re at the center of it all…a media landscape that would be barren without us.” Network Sales President Jo Ann Ross coyly kicked things off: She told advertisers to “Please relax. We’re not going to give you a hard sell because at CBS we don’t have to”– as lights illuminated her dress with pitches to buy, ratings stats, and up arrows. She added that at CBS the sales message “is simple: anywhere, at any time on any screen.” The company vows to “reach the biggest audiences on multiple platforms across all of our assets.” Moonves added that “no matter how many times we tell our success story, I never get tired of it.” With CBS’ first victory this year among 18-to-49 year olds since the 1991-92 season he joked, “When making your buys, don’t hold our youth against us.”
Per tradition, top CBS executives unveiled their fall schedule at an informal breakfast event this morning where they took some jabs at the other broadcast networks. A day after Jimmy Kimmel once again skewered CBS at the ABC upfront presentation, CBS Corp CEO Les Moonves had this to say: “I was very flattered when Jimmy Kimmel called us ‘smug motherfuckers. You don’t call somebody ‘smug motherfuckers’ unless they’re smug and they’re winning, so we’ll try to be a little less smug and a little more gracious, but that’s hard for me, as you know. But anyway, Jimmy, ABC is still going to finish fourth in 18-49.” To ABC: “If your late-night guy is the funniest you have, keep him there as long as you can.”
Related: CBS 2013-14 Schedule
CBS’ head of scheduling Kelly Kahl kept the zingers coming.
Jay Leno had some choice words for rival CBS and its brass during his interview Wednesday with Late Late Show host Craig Ferguson – who was making his second appearance on The Tonight Show in less than two months. When the conversation swung to a recent incident when fellow late-nighter Ferguson’s studio got soaked by a faulty air conditioner unit, Leno took some jabs at the Eye network and singled out Les Moonves. Watch the clip below:
No surprise about who topped the list of 2012′s highest paid CEOs at the media companies whose compensation practices I track most closely. (See here for an explanation). CBS’ Les Moonves returns to the head of the pack with $62.2M, even though his package was 11.1% smaller than it was in 2011. That was an anomaly: The top 20 collectively made $542.7M, up from $416.6M in 2011, according to company proxy statements filed at the SEC. It took $25.9M to crack the Top 10 — last year Time Warner Cable’s Glenn Britt made it with $16.4M. The most notable change in this year’s list vs 2011 is the jump by Liberty Media’s Greg Maffei to No. 2 from No. 28 as his company adjusted stock options just in case the feds change the corporate deduction this year for performance-based compensation.
Yahoo’s Marissa Mayer also joins the top 10 following her move there from Google. Her appearance also highlights a quirk in this year’s list which has more CEOs than companies: Yahoo had three CEOs last year (Mayer is still there) and there were two apiece at Sirius XM (James Meyer replaced Mel Karmazin) and Cinemark (Tim Warner is now in charge). Also, remember that this list just includes corporate CEOs, not division chiefs or board chairs. I’ll be back soon with a list of the highest-paid media execs. The numbers on the right are the amount in millions of dollars for the total compensation as reported by each company.
Here’s our list of 2012′s highest-paid media CEOs:
The jokes about CBS‘ appeal to gray-haired viewers “are over” the company chief tells CNBC’s David Faber this morning now that the network is poised to end this season No. 1 among 18- to 49-year-olds for the first time in 23 years. Les Moonves enters the upfront ad sales season feeling “pretty cocky” due to CBS’ strong ratings, and price increases in the scatter market. Meanwhile, he says that with stock repurchases investors can expect a “great chunk” of the cash the company will collect soon from its efforts to restructure and sell its billboard business.
The upfront ad sales season would seem incomplete without a grandiose forecast from the CBS chief. But Les Moonves held his tongue regarding the upcoming market for 2013-2014…until tonight. He told analysts, following CBS’ Q1 report, that the network would see “high-single to low-double-digit increases” in the unit price for each 1,000 viewers an ad reaches. “There you have it,” he said. “The numbers you’ve been waiting for.” Moonves startled company followers two years ago when he predicted that his network would see a double-digit increase, and then made good on it. He was not so lucky last year when CBS’ prices rose about 9% after he again predicted a double-digit increase. Moonves says that this year “there’s a lot of noise out there” about the market — which some analysts say could be soft. “I can assure you that next season will be another terrific year” with stronger demand for inventory than at this time last year. What’s more, “unless there’s a network on Mars that we’re not aware of, we’re the No. 1 network in the entire universe.”
The streaming service had better have a lot of lawyers lined up. CBS chief Les Moonves told analysts today that when Aereo expands from its first market in New York “we’ll sue them again” in different jurisdictions. “We’ll follow it.” Aereo plans to offer its service in Boston beginning this month, and add 21 other cities by year end. CBS and other broadcasters have said they might move their stations to pay TV if the courts — beginning in New York — reject their claim that Aereo infringes on their copyrights when it streams their over-the-air programming without payment. Aereo says it merely leases antennas and streaming capabilities to consumers so they can exercise their right to watch free, over-the-air TV. Moonves says he doesn’t think CBS will have to go nuclear because “we’re going to win the case legally.” He adds, though, that CBS could make the shift with little effort. “It would only be in markets where the courts said Aereo could exist.” And CBS wouldn’t have to change agreements with local affiliates. They’d move to pay TV and maintain relationships with CBS “as they are now.” Despite his saber-rattling, Moonves says that Aereo “really has gotten way too much attention. We’re not losing sleep over it. It’s an insignificant player.” The broadcaster also denies that its recent investment in Syncbak — another company that streams local TV programming …
Les Moonves is out to get Aereo by any means necessary, but he “doesn’t lose sleep over it,” the CBS Corp president and CEO told the Milken Institute’s Global Conference today. “Barry Diller has done what he likes to do, disrupt things,” Moonves added. However, the CBS chief did say that if the situation couldn’t be resolved in the courts, he is more than willing to take CBS to cable. “We can do it in a few days. If we go to cable, if we are forced to, then about 10% of America will not get our signal and I don’t think they will like that,” Moonves said Tuesday. The CBS chief said that with around 2,000 subscribers in NYC, the “illegal” Aereo won’t hurt the network but that he still intends to shut them down. “We will go after them in the courts and if that doesn’t work there are other remedies. There are financial remedies; there are congressional remedies.” On Monday at the conference, IAC CEO Diller said that CBS and the other broadcasters suing Aereo want Congress to save them if their copyright infringement suits fail. Fox and Univision have also threatened to move to cable if Aereo prevails.
Tonight the Beverly Hills Bar Association honored Del, Shaw, Moonves Tanaka, Finkelstein & Lezcano partner Nina Shaw with its 2013 Entertainment Lawyer of the Year award. Best moment of the evening? Arsenio Hall waving off stage Shaw partner and CBS Inc Chief Les Moonves’ brother with the wisecrack: “That was Jon Moonves, the good-looking Moonves.” Immediately Hall told the audience: ”That doesn’t leave this room. I’m not kidding. If you want to see me back on TV, that doesn’t leave this room!” (The Arsenio Hall Show marks his September 9th return to late night via CBS TV Distribution and Tribune.) The Shaw tribute dinner featured clips from Jamie Foxx, Laurence Fishburne, Nick Cannon, and U.S. Attorney General Eric Holder.
And we have a winner in the contest to see who was Big Media’s highest paid CEO in 2012. CBS‘ Les Moonves‘ package was down from 2011, but still handily beat Discovery Communication‘s David Zaslav (at $49.9M) and Disney‘s Bob Iger (at $40.2M). Moonves made $3.5M salary, $27.5M bonus, $11.5M stock awards, $16.3M option awards, $1.9M change in pension value, and $1.4M in other compensation. The “other” category includes $660,247 in transportation related benefits and $583,808 for security, according to the proxy just filed at the SEC. Moonves’ take was 5.4 times higher than the median for CBS’s four other highest paid execs — including Executive Chairman Sumner Redstone who made $31.3M, +54.4%. [His combined compensation from CBS and Viacom came to $51.7M, +25.3%] The disparity will return Moonves to our out-of-whack pay list; corporate governance watchdogs say it’s a sign that a CEO is too powerful when his or her pay is more than 3 times the median for others in the C-suite. The board says that in determining Moonves’ salary it considered his “stature as one of the most influential leaders in the entertainment industry, his tenure as a Company executive since 1995, and his performance…including in connection with the creation of premium content across the Company’s portfolio of businesses.” CBS shares appreciated 35.8% in 2012.
In his call to investors today CBS head Les Moonves referred to the upcoming eighth season of Showtime’s Dexter as its “last season”, supporting speculation that the series is approaching its end. Showtime President David Nevins hinted at an “end-game” during January’s TCAs, and in a Q&A session at Deutsche Bank’s 2013 dbAccess Media, Internet & Telecom Conference today moderator Douglas Mitchelson asked Moonves about the network’s plans post-Dexter. “Ray Donovan is coming on with Liev Schreiber which comes on with Dexter‘s last season starting in June”, said Moonves. “And then we have Masters of Sex, a story of Masters and Johnson, which is a very exciting show. A show that you wouldn’t see on CBS but it works on Showtime. And that comes behind Homeland in September. And just announced, we’re doing a series about the Vatican, which I think is rather timely, which Ridley Scott is directing for us. So we’re very excited about that”. Dexter returns for its eighth season on June 30, 2013.
This was one of the points the CBS chief just made to investors to promote his favorite message: that all’s well for CBS and broadcasting. He’s been lobbying to have advertisers pay for the viewers who see commercial spots on DVRs as much as seven days after they first air, up from today’s three days. And that’s “coming right around the corner, and that will be good for us,” he said at a wide-ranging Q&A session at the Deutsche Bank Media, Internet and Telecom conference. Even with the existing C3 arrangement he predicts that in the upfront market “CBS will lead in volume and CPM increases” although he declined to provide a specific target. He adds, though, that “the thing that the press writes that bothers me the most is that 18-to-49 is the only viewer the advertiser cares about…The fact is, we win total viewers by more than we win every other demographic. We welcome everybody and we sell to everybody.” He’s also enthusiastic about digital streaming services including Netflix. “House Of Cards? That’s great. I don’t view them as a competitor. We’ve talked to them as a production company about producing shows for them. So they’re our friend, not our enemy.” Netflix also isn’t the only game in town. “Amazon’s jumping in in a big, big way,” Moonves says. But CBS will stick with selling online services for its older shows, especially serial dramas. “We’re not going to risk our entire schedule.” That’s the main reason why CBS didn’t join Hulu. If the company puts a show on CBS.com that interferes with viewing at the main network “I can pull that in 10 seconds. At Hulu you can’t. Once you give it up, it’s gone. Your child has left you.”
I was starting to think that the popular view of the CEO as a supersalesman for CBS was becoming a tired caricature, until I saw what happened to the company’s stock today. Shares were +4% — to a new high (at least since its spin off from Viacom at the end of 2005) of $44.64 — even after the broadcaster last night disclosed Q4 financials that fell short of the Street’s revenue and profit expectations. It certainly helped that CBS also announced a $1B accelerated share repurchase. But if that’s all it took to win over investors then they should be in love with DirecTV, which yesterday announced a $4B share repurchase, and beat Q4 expectations. Yet it’s down about 5.8% since Wednesday as investors focused instead on the shot the company will take from Venezuela’s currency devaluation. It seems that the Street is more forgiving of CBS at least in part because Les Moonves has dazzled investors with his boundless optimism.
Ratings are so strong for the network’s current programs that “we aren’t going to need very much” for the fall primetime lineup, CBS chief Les Moonves told analysts today. He isn’t being complacent: CBS “ordered a couple of more pilots than in previous years” and the people involved in them are “phenomenal.” (See our listings here.) Still, “my guess is there aren’t going to be a lot of new shows” in May when CBS presents its lineup at the annual upfront presentation to advertisers. Moonves was uncharacteristically reluctant to say how big a price increase he expects in this year’s upfront. “My sales department will kill me,” he says. “Last year I said double digits [percent increase] and we only had 9%.” Even though he wouldn’t mention a number, he says “I’m feeling very confident.” But he may have to wait before advertisers are ready to go along with his proposal to measure commercial viewers based on the number of people who see them on DVRs or other platforms up to a week after they air — up from the current three days. “We’re in conversations with advertisers” but “I don’t know if it will be ready for this upfront.”