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Moonves Says CBS First Standalone Retrans Deal Imminent

Mar 1, 2006  •  Post A Comment

CBS Corp. CEO Leslie Moonves said late Tuesday that his company is weeks away from striking its first standalone retransmission consent agreement, under which the media company will be paid for its broadcast signal.

Mr. Moonves, speaking at a media conference in Florida that was sponsored by investment bank Bear Stearns, declined to give specific details of the new agreement, beyond saying the deal would involve 3 million to 5 million cable subscribers. He said he expects to make an announcement within the next six weeks.

If the company strikes a deal, it would make good on a months-long promise by Mr. Moonves to be compensated by cable companies for his company’s broadcast signals. He has said repeatedly that one of the benefits of its split late last year from Viacom and MTV Networks is that CBS is now able to seek compensation for its content from multiple system operators.

“For many, many years, all of the broadcast networks were attached to cable companies,” Mr. Moonves said. “Instead of our getting paid for [our content], MTV would get a new channel or Nickelodeon would get a new channel in exchange for getting the CBS signal for free. For the first time in many decades, there is a standalone network.”

How much CBS stands to get from cable operators remains to be seen, particularly since many of the company’s potentially biggest deals don’t come up for negotiation until the 2008-10 time frame. However, Mr. Moonves appeared to establish a compensation threshold on Tuesday, saying that “if some cable networks with half of our material get [a monthly per-sub fee of] 25 cents, we should be worth more than that.”

Mr. Moonves said Tuesday that he thinks revenue generated from retransmission consent payments could be in the hundreds of millions of dollars. Bear Stearns analyst Victor Miller earlier this year predicted CBS could generate $150 million annually in retransmission fees.

“We have 60 million households that are in our owned-and-operated markets that would get paid for when you include CW and CBS,” Mr. Moonves said. “If you start to figure that out, it comes to a very significant figure.”

Mr. Moonves said there could be some opportunities for CBS affiliates to get some of the wealth as well, though early deals are likely to involve only CBS O&Os before affiliates are incorporated into the mix.