CBS sees ad market improvement

Merrill Lynch Conference hears market no longer in decline

NEW YORK -- CBS Corp. continues to see improvement in the advertising market, CFO Fred Reynolds said Thursday.

Speaking at the Merrill Lynch Global Telecommunications, Media and Technology Conference in London, Reynolds said the market is no longer declining and may even see a slight upward trend after showing first signs of stabilization in mid-February.

There are "clear signs of (us) emerging" from the recession, he said. "But that's not to be confused with growth to make up for the drop" seen since the economic downturn started.

CBS scatter market advertising prices are currently up in the mid-single digits over last year's upfront, Reynolds said, who also became the latest industry executive to confirm that this year's upfront is moving slowly.

Most advertisers are still in the process of setting their upfront budgets, he said, comparing this year to three years ago and predicting upfront deals will get done around July 4 or mid-July.

Like his president and CEO Leslie Moonves has done before, Reynolds predicted NBC's decision to put the new Jay Leno show at 10 p.m. Monday-Friday should boost CBS's ad dollars though. "We have less competition at 10 o'clock," he told his London audience. "(Jay) may be a proven talent, but the show is unproven."

Asked how well CBS has positioned itself to emerge from the recession as a financially stronger firm, Reynolds pointed to cost cuts across all businesses -- and particularly radio and TV stations -- including key changes to underlying arrangements, such as anchor contracts that have in some cases been renegotiated with 20%-50% salary reductions.

"We have fundamentally changed" these businesses, he said. "I'm very confident that our local (business) margins will be up," even if revenue will take a longer time to bounce back in the economic recovery.
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