CBS Promises A CW That's Profitable Right Away

Wall Street likes the look of black--especially from a media company that promises to stay in it from the get-go.

Les Moonves, chairman of CBS Corp. told Wall Street analysts at a meeting, his first as chairman of CBS Corp, where UPN and WB went wrong, and that the newly merged assets of the two, the CW, will make money the very first year. The deal needs to be approved by June. Three months after that, the new CW will begin.

Perhaps Moonves is already thinking about the upfront--with dollar signs in his eyes.

CBS is building a future based on demand, pay-per-play and possible reverse affiliate compensation revenues. Perhaps Moonves is also thinking about getting money from cable operators for the first time. Why? Because CBS and the CW have programming, sometimes really good programming. "Try running a cable operator without the Super Bowl," he said bluntly.



But right now the company is one that depends strongly on advertising. That had one analyst concerned. Moonves' response was a good one: CPMs have risen historically even when the stock market dropped. Actually, CPMs have risen over the last twenty years but two: in 1991, the first Iraq war, and in 2000, right before the Internet implosion.

With the promise of almost-expected gains in advertising, the new CW, he assumes, has nowhere to go but up. There are, of course, the natural savings that come with merging two companies' assets-- marketing, programming, and the rest.

But advertising dollars will be the first step. Analysts have already said that not all the combined $900 million in annual advertising sales from both UPN and WB will end up in The CW's pockets. Advertisers are a cautious lot and always looking for opportunities - even if they've bought the two networks' shows before. They might feel it's now time to move money to cable, the Internet or the mobile space.

Perhaps, as at the beginning of any new network, there'll be charter advertising deals or other special signing agreements. The CW could make some accommodation--or not.

If it has the goods, well-rated shows, then all will be CW: creatively working.

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