• by Wayne Friedman , September 13, 2006

PASADENA, CA--CBS Corp. is looking to start a small film division, mostly to whittle down the high production/license costs at Showtime.

Les Moonves, CEO of CBS Corp., speaking at a Merrill Lynch Media Conference here, says the effort is financially driven. Showtime shells out $15 million to $20 million per film for first-run pay-cable movies.

"We are looking at doing movies for around $10 million or $15 million, perhaps partnering with studios and investors," says Moonves. "We can own them and not have one iota of risk. It might be a nice library to have."

Speaking with media-industry stock-market analysts, Moonves pointed to a number of ad areas that were doing well at CBS Corp. High on the list was the skyrocketing growth of outdoor advertising--up 32 percent for the second quarter. Recently, CBS made perhaps the biggest outdoor deal ever with London Underground.

Closer to home, he notes that the new CW network has seen vastly improved fourth-quarter scatter ad sales--which are pacing 20% more than a year ago, as compared with the WB and UPN networks. MediaDailyNews first reported this Sept. 12. ("Network Upfront Was Flatter, But Scatter Is Fatter").

This past Sunday, CBS began its new NFL contract, which Moonves says has been '"profitable on day one." In February 2007, CBS will air the Super Bowl. Moonves says the game is way ahead of the ad sales pace when CBS sold the event the last time around.

"People are still spending $2.5 million for a 30-second spot," he says. "We are way ahead of where we were four years ago."

Future new revenue will come from cable operators, he says. CBS is getting ready to charge cable operators for carrying CBS' signals--something the net hasn't done before. Moonves expects to get some $150 million in revenue once older cable contracts--package carriage deals made with MTV and Nickelodeon--expire in 2008, 2009, and 2010. (The deals were signed when CBS and Viacom were under a single company.)

Moonves also noted that CBS TV stations have seen $100 million in political advertising this year. He expects a better advertising year for stations in 2007, because the Super Bowl is a big draw for local advertisers.

In countering some questions regarding the cyclical nature of the TV network business, Moonves says CBS is better than most. "We have hits on every single night of the week," he says. "Six new shows [from a year ago] are returning this year. We have only four new shows to promote this year. We own 75 percent of our prime-time lineup. We will not fall off a cliff if one show fails."