• by Wayne Friedman , Staff Writer, June 7, 2005

It was only a matter of time that a broadcast network would want -- in a financial sense -- to become more like a cable network.

Long the kings of big advertising revenue, now broadcast networks, such as CBS, want to be treated like any other good TV cable programmer — that is getting a dual revenue stream which includes, not just advertising sales, but a fee from cable operators to carry CBS programming.

And why not. CBS and other networks provide value to a cable operator. CBS already gets fees from satellite and telco distributors. CBS is in a good position to ask for the extra scratch – days after coming off as the leading broadcast network in terms of this year’s upfront sales -- $2.6 billion.

CBS chairman and Viacom co-president Leslie Moonves said the cable fees would fund programming for other cable networks. Fees would go to pay for high-priced programming such as NFL, “Late Show with David Letterman” and the “CSI” franchise of shows.

Here’s where the irony drips:

Viacom will soon be splitting the company into two publicly run units – one primarily of cable assets, led by MTV Networks and run by co-president of Viacom Inc., Tom Freston, and the other run by Moonves. The chief reason for the move was to let undervalued cable assets bloom for shareholders – assets that are not encumbered by older and slower growing businesses such as CBS.

So with Moonves we see what the real Viacom plan is. Viacom wants both parts of the company to get a piece of the cable action after all.

Moonves is playing this one friendly, with no threats attached – yet. Still, cable operators are wary of programmers who get too big for their britches. Interesting dances have developed in recent years when Disney’s big cable networks, including the strong ESPN, demand subscriber increases. Viacom itself has thrown its weight around when asking for MTV Networks’ subscriber fee hikes.

But here’s a bigger question – what will CBS do when the cable operators turn them down? Will CBS pull its network from cable systems – which covers up to 85 percent of all U.S. TV households? Would CBS risk losing that upfront advertising crown? And where would CBS go?

With revenues increasingly harder to come by for broadcasters, Moonves is testing the waters. In a pressure-packed business where executives have to perform consistently, the answers to any of these questions might be as shocking as watching a leg being severed in an opening scene of “CSI.”