CBS Expects 4Q Scatter Bounce, 3Q TV Revs Up 2%

Les Moonves of CBSCBS Corp. says its broadcast network has showed some positive results in the fourth-quarter scatter ad market and minimal cancellations of its June upfront advertising buys.

"The scatter market is not booming like in the past year," says Les Moonves, president/chief executive officer of CBS Corp., in a conference call with Wall Street analysts. "We sold in the upfront a large percentage of [our ad inventory]... in the high seventies."

Whatever remains in the scatter market, however, Moonves said, will come to CBS. That's because CBS is leading in all audience metrics through the first five weeks of the season: viewers, households, 18-49 viewers and 25-54 viewers. In terms of scatter money, "it's all coming to us [because] we are outperforming our [network] peers."

Fred Reynolds, executive vice president/CFO of CBS Corp., says: "Right now in the scatter market, we are selling slightly above the upfront. Scatter pricing is hanging in there." In terms of advertising categories, while automotive advertising is down for national and local TV, Reynolds notes that automotive is flat-to-up at CBS Outdoor.

Regarding upfront cancellations in the near-term periods, including 2009, Moonves says: "Cancellations from the upfront purchases were minimal," if not a little better than expected. As for the health of the network advertising market, "we have not seen a great slowdown in national advertising [as opposed to local]," said Moonves.

Because of major competition from the NBC Beijing Olympics during the third quarter, television ad revenues sank 14%. But overall TV revenues, which also include cable and syndication license fee deals from "CSI:New York," were 2% higher to $2.07 billion. TV operating income dropped 15% in terms to $414 million.

CBS on a gross revenue basis pulled in $180 million in television political advertising--$90 million up to the end of September and getting another $90 million through Nov. 4, election day.

Non-TV segments at CBS showed some strain. Radio dropped 12% in revenues to $392.5 million, with operating income off 18% to $139.4 million. Outdoor was 1% improved in revenues to $392.5 million, but down 26% to $113.9 million in operating income.

On the upside, publishing was 5% higher in revenue to $225.0 and 8% improved in operating earnings to $25.8 million. CBS Interactive rocketed to $140.7 million from $35.9 million. CBS' CNET Web business improved 6% in revenues, thanks to a 12% growth in display advertising.

Overall, CBS revenues were up 3% to $3.4 billion, with its adjusted net earnings up $290.3 million.

In summary, CBS posted a massive third-quarter loss--$12.46 billion--after taking a recent $14.12 billion charge to write down the value of media assets on its books. But CBS overall posted a massive third-quarter loss--$12.46 billion--after taking a recent $14.12 billion charge to write down the value of media assets on its books.

Next story loading loading..