CBS Corp. CFO: Network Ready to Hold out on Upfront Deals to Lead Market

10:43 AM PDT 5/30/2012 by Georg Szalai

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Joe Ianniello also says that the network has sold more than 50 percent of ads for next year's Super Bowl and the company is likely "a net seller" rather than acquirer of assets.

LONDON - CBS is ready to hold out to lead the market in the broadcast upfront advertising market, CBS Corp. CFO and executive vp Joe Ianniello vowed here Wednesday at the Bank of America Merrill Lynch Global Telecom & Media Conference.

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He said upfront business has not started to be written yet, but he emphasized the continued ratings strength at his company's network.

He also said that the network has sold out more than 50 percent of the ad inventory for the 2013 Super Bowl. He added that prices are higher than last year's, reiterating that Super Bowl revenue could exceed $200 million.

Ianniello said that CBS Corp. is "probably a net seller" rather than an acquirer of assets given the hundreds of millions of dollars of internal revenue upside from retransmission consent fees, reverse compensation with TV affiliate stations, which will become significant in 2014-2015, and digital syndication. The company has sold some radio stations in smaller markets, for example.

Asked about a potential sale of the CBS outdoor ad business, Ianniello said he is always open to deals that make sense, but the outdoor unit is focusing on its sales. He quipped that he would go shopping and then meet the outdoor ad sales team, "and we are going to sell together."

He reiterated that the CBS Corp. target to reach $250 million in retransmission consent revenue is likely conservative as it was based on a target rate of 50 cents per subscriber, which is "well below market," he explained.

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Asked about the increasing digital streaming availability of TV shows and its impact on TV ratings, Ianniello said that CBS has not taken a ratings hit with its focus on making available older season episodes. Digital subscription VOD revenue can continue to grow as additional players, from Apple and Intel to Verizon and Google, may enter the market, he reiterated.

Meanwhile, CBS Corp. continues to grow its international business, with international revenue already at around $1 billion and more growth ahead driven by such markets as Brazil, China and India.