CBS’s Moonves Sees Gold In Reverse Comp

Reverse compensation from CBS affiliates could increase the CBS corporate revenue by “hundreds of millions of dollars over the next three or four years,” CBS CEO Les Moonves said at the Goldman Sachs Communacopia conference in New York this afternoon.

Most of CBS’s big affiliate contracts are not up for renewal until 2014 or 2015, although the network in close to announcing a deal with a “major” affiliate group that will include reverse comp, Moonves said.

He said that the network has already quietly struck reverse comp deals with 25 small affiliates without much trouble. “You have not heard of any stations being pulled off yet.”

“It’s become accepted, and rightly so, that when a local affiliate is getting retrans [from cable and satellite operators], he is getting it a lot because of primetime, because of David Lettterman, because of 60 Minutes, because of the NCAA tournament and because of the NFL.

“They realize that [reverse comp] is good for them in large part because of what the network is delivering.”

The structure of the reverse comp deals varies, Moonves said. But in most cases, he said, CBS is asking for a fixed fee rather than a percentage of the affiliates’ retrans take. “If someone is a good negotiator or a bad negotiator, that shouldn’t affect what we get paid.”

in a teleconference with securities analysts last month, Moonves suggested that the reverse comp revenue could eventually grow to as much as $450 million.

At the Goldman Sachs conference, Moonves noted that CBS programming reaches only about 38%-39% of TV homes through its owned stations. “The affiliates are important to us. We want to see them strong…. Their strength helps our strength.”