Radio and TV both growing for CBS


Executive Chairman Sumner Redstone hailed the Q4 results as “fabulous” and praised the “terrific team” at CBS Corporation headed by CEO Les Moonves as the company reported improvement in all areas for the quarter. Pacings, meanwhile, are strong for the current quarter.

“Content is king and will always be king. And no one has better content out there than CBS and one other company, whose name I cannot mention today,” Redstone said with a joking reference to rival Rupert Murdoch’s News Corporation.

Reporting for the first time under its new segment organization, CBS said Q4 revenues were down 8% for local broadcasting to $680 million. Revenues for the O&O television stations were down 3% to $358.2 million, although CFO Joe Ianniello noted that the lack of pollitical was worth 14 points, so our math says the TV group would have been up 11% excluding political. Radio revenues were down 12% to $322.2 million, but two points of that was attributed to station divestitures – so down 10% on a same stations basis.

Local broadcasting adjusted OIBDA, however, was up 31% to $227.5 million, due in part to reduced overhead. Moonves assured analysts that having made cost cuts, CBS is not going to allow costs to rise again just because ad revenues are improving.

December, Ianniello noted, was the best year of 2009 for CBS Radio, with auto advertising up in the high single digits, so radio is on the way up. Moonves declared that radio will post positive revenue results in Q1 and is currently pacing up in the mid single digits. The top 10 markets, though, are up in the low teens.

Local TV, meanwhile, is pacing up in the high teens, and not just because CBS had the Super Bowl this year. But the CFO noted that for the stations which did have the big game, the 14 CBS Network O&Os, pacings for Q1 are up “north of 30%.”

The CBS Network is now reported as part of the Entertainment segment, along with the studio and syndication businesses. Entertainment revenues rose 4% in Q4 to $1.82 billion, with ad sales for the CBS Network up 8%, while ad revenues declined 5% for CBS Interactive. Moonves noted that scatter pricing had been up 25% over the Upfront in Q4 and is now pacing up more than 30%. With the next Upfront fast approaching, he said CBS will not hesitate to again hold back inventory if it can’t get  proper pricing.

On the retransmission consent front, Moonves noted that CBS has now completed deals with 56 cable and satellite operators. Retrans is expected to total more than $100 million in 2010 and keep growing.

Moonves was asked by Wells Fargo Securities analyst Marci Ryvicker whether CBS is managing to collect a portion of the retrans payments that its affiliates are winning from the MSOs. That’s not included in the Local Broadcast retrans total, but rather in fees for the Entertainment sector. “Yes, we are getting reverse comp from certain stations,” Moonves acknowledged.

RBR-TVBR observation: It looks like a good year ahead. CBS is hardly the first to report that pacings are strong for Q1, but it adds to the body of evidence. The year is starting out well – and with a huge election battle to come, it should only get better.