CBS Exec: Local TV Will Become More Competitive Once Oprah Ends Broadcast Run

CFO Joseph Ianniello says off-network syndication is "growing significantly" giving the overall business "a lot of upside"

NEW YORK - CBS Corp. feels well positioned in radio and isn't interested in Howard Stern if he returned to terrestrial radio, a top company executive signalled here Tuesday.

In an appearance at an investor conference, CBS Corp. CFO Joseph Ianniello also discussed the effect of next year's end of Oprah Winfrey's syndication run on his company.

Asked about Stern's future when his current contract with satellite radio firm Sirius XM ends at the end of the year, Ianniello said he has "no idea" if the shock jockey would return to terrestrial radio.

And while the CBS Radio unit loves good quality content, he signalled that a return of Stern to his previous employer would mean betting a lot of money on one person and franchise, which is a risky business proposition. "We like it much more diversified," Ianniello said without directly ruling out any interest in Stern. "So, we are very comfortable where we are...we wish him well."

Asked about Winfrey, Ianniello acknowledged that CBS Corp.'s financials will take a certain hit - which he didn't detail - when Winfrey ends her syndicated TV show, for whose distribution CBS gets a fee. But the company will be just fine, he argued.

Speaking here at the Wells Fargo Securities Technology, Media & Telecom Conference in a session that was available via Webcast, he highlighted that No. 1 syndicated show Judge Judy, Entertainment Tonight and other shows that CBS syndicates continue to do well and that the real growth driver in syndication is the off-network program business. "That pie is growing significantly," giving the overall syndication business "a lot of upside," he said.

"Clearly you don't replace Oprah," Ianniello told the investor conference, also highlighting that she isn't on CBS, but ABC stations in major markets. "So, on a local level, our TV stations become more competitive," he said about Winfrey's exit from syndication next year.

Discussing CBS Radio's recent return to revenue growth, the CBS CFO said that if one invests in good programs, "the local radio business is still healthy." His company remains "very bullish about the radio industry," he added.

Ianniello also said that retransmission consent fee revenue continue to grow for CBS, which is on track to reach its $250 million target in 2012. But he expressed frustration that critics question the retrans model when too many cable networks get paid handsomely.

"There are cable networks [that] build their entire franchise on our repeats, and their margins are higher than ours and their valuations are higher than ours," said Ianniello. "I scratch my head on that a little bit."

He also reiterated his CEO Leslie Moonves' recent comments that any government intervention in retrans program disputes would be bad for everyone. "The government should not be involved," Ianniello said.

He also signalled that in three-plus years, reverse compensation from TV station affiliates to the CBS network could also be established as a new revenue stream.

Asked if he expects Walt Disney to sell ABC to private equity firms sooner or later, he said any deal could highlight the value of the broadcast business and help boost the stock price of CBS. As far as private equity competion goes, the CFO said: "Bring it on!"

Ianniello also said that local TV advertising demand continues to be strong in November and December following the midterm elections.

 

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