To be announced in six weeks, the first of many deals with cable operators will yield payments for 3-5 million cable subs, CBS CEO says. CBS wants to partner with affils in retrans push, he adds.
CBS watchers who have been waiting for Les Moonves to make good on all his talk about extracting retransmission consent fees from cable operators may not have to wait much longer.
The CBS president and CEO said last night that the corporation would announce its first retransmission consent deal involving three to five million homes within six weeks.
Appearing at the Bear Stearns media conference in Palm Beach, Fla., Moonves said that he could not say how much the company would receive from the unnamed cable operator for the right to carry a CBS station or stations, but suggested that it would be no less than the 25 cents per cable subscriber per month that some basic cable networks receive. “We should be worth more than that.”
Doing the arithmetic and being conservative, CBS stands to make $12 million a year from the deal (4 million subs at 25 cents per sub per month).
Ultimately, between now and 2010, CBS expects to be compensated by cable for all of the 60 million TV households that CBS and The CW serve. “We think that it could amount to hundreds of millions of dollars in revenue to the CBS network,” he said, noting that all the revenue would fall to the corporate bottom line.
“So while most of the our bigger cable deals are down the road a piece, we are going to begin to get paid for our signals in a short period of time.”
Moonves also said that CBS was working with the affiliates on retrans. “There will probably be some sort of split with our affiliates as wellÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â¦. Obviously, the first few deals will be on our own and then we will incorporate them.”
Moonves said he doesn’t believe the other networks will follow CBS is demanding retrans fees. They still tend to trade the retrans rights of their stations for carriage of their cable networks rather than insist on cash. “Being a standalone gives us a great advantage,” he said.
Earlier in day at the conference, David Smith, CEO of Sinclair Broadcast Group, said that he was determined to increase dramatically his retrans take from cable.
As cable falls in line with satellite TV operators in paying fees, he said, Sinclair’s annual revenue from retrans will grow from $25 million in 2006 to as much as $100 million in 2009.
“It’s very clear to us everybody is going to pay,” Smith said . “The only issue is what day and how much. The pure market forces are going to mandate that that happen. Otherwise, there will likely be some substantial losers on the cable end of the equation.”