CBS: Strong, But Changing Ad Climate, Powerful Retrans Fees

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Strong advertising results continue at CBS -- especially at its TV stations -- but market dynamics have changed some of the process.

Joseph Ianniello, executive vice president and CFO at CBS Corp., said business continues to be strong with automotive advertising at its stations and network. At its stations, however, the category now represents less than the typical 20% of a TV station's overall advertising revenue share.

Overall, for the company as a whole, he added: "No one advertiser represents more than 1% of our revenues." Ianniello was speaking at the Bank of America Merrill Lynch media conference in Newport Beach, Calif. on Thursday.

While TV advertisers are still making last-minute decisions -- a process that started during the depths of the recession over the last year and a half -- conditions are improving. "They are booking dollars earlier, but it's not like the way it was," he said.

Concerning programming costs, Ianniello noted that for the 2010-2011 season, budgets are down. "Actually, it cost us less than in previous seasons." But he noted that the company took some programming charges earlier to get to these results.

CBS is looking at solid political dollars again for this season. Ianniello noted that CBS tends to do somewhat better in midterm elections. One question for Ianniello that wasn't confirmed was whether $200 million in political advertising was possible.

Ianniello said CBS' syndication business will remain strong -- even with the absence of Oprah Winfrey next year. "If anything, we are seeing [more growth]. There are more cable channels. Demand is greater."

Retransmission fees -- of which CBS has said could give the company some $250 million in revenue a year -- are a new powerful factor for the company. "We now have a predictable growing revenue stream," he said.

He noted that approaching CBS as a broadcast network is a limiting perspective. "No one asks us, 'Are you a broadcast network?' They say, 'How much content can you give us'?"

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