Green light for CBS films

Ex-Paramount exec Tobey is COO; CEO will follow

CBS Corp. is moving ahead with the creation of a CBS Feature Films unit, saying Wednesday that it has named Bruce Tobey, a former executive vp at Paramount Pictures, as COO of the new division.

CBS Corp. president and CEO Leslie Moonves has repeatedly signaled in recent months that the company would enter the film business in a low-cost, low-risk way after last year's separation from Viacom Inc., which kept the Paramount studio for itself.

The CEO of CBS Feature Films will be named in the coming months, the company said.

"I can't think of a better first step in kick-starting CBS Feature Films than by bringing Bruce on board," Moonves said. "His significant operational experience and sophisticated understanding of the entire movie industry will make him instrumental in getting this enterprise started."

Said Tobey: "CBS — in no small part because of Leslie's leadership — has a tremendous opportunity in the film business." He added he would indeed build "a financially disciplined operation that creates compelling original content."

Tobey is charged with establishing the new unit, CBS said. In addition, unit departments such as finance, legal and business affairs will report to him. He also will oversee home video distribution of the operation's releases, CBS said.

Moonves and his team started signaling a low-risk move into the boutique movie production business last summer.

He admitted this year that such a move is "not entirely risk-free" but added, "the upside is far greater than the risk" (HR 1/11). He concluded that "a bad movie would lose us (only) a few million dollars."

CBS premium cable network unit Showtime has output deals with Viacom Inc.'s Paramount Pictures, Lionsgate and MGM that come to an end late this year, and Showtime spends hundreds of million dollars on these deals. As a result, management has said it is looking at whether to continue some of these arrangements or simply buy rights for single films as other pay TV firms have done, with much financial success.

Moonves has signaled CBS could produce four to six films a year in the $10 million-$50 million budget range, allowing Showtime to partly make up for some lost film product on canceled output deals while also giving it a chance to participate in the upside.

CBS executives have said the company could make up its film costs thanks to other rights, such as TV and international, before the boxoffice run of movies even starts. And after several years, CBS would have a library it can further leverage in the digital age, they have argued.

Wall Street observers have suggested that CBS could get financing from private-equity firms and other financial institutions, which have been shelling out increasing amounts of money to studios in recent years.

Since leaving Paramount a year ago, Tobey has been consulting for companies and individuals in the feature film, TV and new-media fields.

He served as executive vp at Paramount from 2001-05, focusing originally on the business, legal and administrative operations before getting involved in virtually all key decisions and transactions. He also was one of the two Paramount representatives on the MPAA board of directors.

Until June 2004, Tobey also was executive vp of Viacom Entertainment Group, which included TV production and distribution businesses, the Simon & Schuster book unit, consumer products operations, movie theaters and the Famous Music publishing unit.
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