No rush in upfront sales, Leslie Moonves says
Also weighs in on auto ad debateCBS Corp. CEO Leslie Moonves said Thursday that the upfront selling process could be slower to complete this year.
He also weighed in on a brewing Wall Street debate about the effect sluggish auto advertising trends will have on media and entertainment companies.
Two weeks after Upfront Week concluded amid the end of the WGA strike-impacted 2007-08 TV season, there's little sign of the headlong rush that characterized upfront selling of a few years ago.
In an appearance at the Sanford C. Bernstein & Co. Strategic Decisions Conference here, Moonves said that CBS has "begun the dance" with advertisers and agencies but that no significant deals have been made yet. "We expect it'll happen maybe June, maybe July it'll all break," he said. "But we're ready."
Moonves said that the process was slower because of the truncated development season, and that there are a lot fewer pilots available to see this year compared with previous years.
Unlike the ad agencies and others who said that upfront pricing will be flat to down, Moonves said he was thinking positive after having preliminary meetings with advertisers. "We are guardedly optimistic that (the) upfront is going to be up, that CPMs are going to be up," he said. "If volume is down, that doesn't bother us."
He argued that as long as the scatter prices are higher than upfront pricing -- and they remain up in the double digits, he said Thursday -- the CBS network will just sell a lower amount of its advertising inventory in the upfront.
He declined comment on how much pricing will be increasing. "How high up, it's a still a little early to tell," he said.
Moonves on Thursday also echoed Viacom CEO Philippe Dauman who acknowledged a day earlier that auto advertising has been taking a hit, leading his firm to lower revenue growth guidance for its cable networks. The comment on Thursday pushed Viacom Class A shares to a 52-week low of $35.78, compared with the previous year-low of $36.
UBS analyst Michael Morris argued in a report this week that Viacom should see little pain in a weak U.S. economy given that its exposure to auto and financial ads, which are under pressure, is well below those of its peers. But on Thursday, he suggested that Viacom's reduced guidance could mean bigger trouble elsewhere. "Weaker automotive advertising and an overall softer scatter market could prove more detrimental to competing media companies given higher relative exposure," he argued.
"It is slowing," Moonves said about auto ad spending in his conference appearance Thursday. But while CBS has "some exposure" to car ads, he argued that this is mainly affecting some of the firm's TV stations and that the trend will reverse.
The CBS CEO added that he had a meeting with Ford CEO Alan Mulally on Wednesday that included a discussion of ad spending trends, but didn't provide further specifics.
Moonves also lamented the performance of the CW network, whose low ratings he said might be an impact of the Internet. " 'Gossip Girl' should be a major hit. There's nowhere I go where a woman under the age of 30 doesn't talk about that show," he said. "It's something where perhaps the Internet age has actually hurt us. There's a lot of online viewers of that show that we're not getting appropriate credit for."
Moonves reiterated that CBS Films wouldn't be doing massive "Pirates of the Caribbean" and "Speed Racer"-type movies. He said the company would never spend more than $50 million on a movie, and it would be a limited, conservative venture.
"The only risk of us morphing into a studio (comes) if these are wildly successful and we're making a fortune on them and we see a path to continue," Moonves said.