Bad Moonves Rising: Les Takes Aim at Zucker, USA

CBS chief talks up broadcast, retrans at NAB's Vegas gathering

On the eve of what promises to be an enormously lucrative upfront, Les Moonves is feeling his oats. Speaking Tuesday at the National Association of Broadcasters annual gathering in Las Vegas, the CBS Corp. honcho took shots at one vanquished foe and a lean and hungry cable rival.

Delivering lines with his signature candor in a Q&A with NAB head Gordon Smith,  Moonves leveled former NBCUniversal CEO Jeff Zucker. “When one of our competitors at another one of the major networks kept talking about, ‘the model’s broken,’ I said, ‘No, no, no…There’s a difference between a failed programming executive and the model being broken,’” Moonves said.

After pausing for the laugh line, Moonves eased into a more earnest spiel about the strength of the network TV business. “We are broadcasters. I love being a broadcaster, I’m proud of being a broadcaster,” Moonves said. “It’s the greatest business on earth…We provide so much to America, we provide so much to our audience—not bad when 42 million people can get together and watch a golf tournament on Sunday afternoon.”

Having dispatched with the folksy paean to his peers in the seats, Moonves reloaded his howitzer. Next in his sights: top-rated cable channel USA Network.

Addressing one of his pet topics, Moonves suggested he remains unsatisfied with broadcast’s retrans revenues. “USA Network should not be getting paid more per subscriber than we are for our own original programs,” Moonves said, noting that the cable network pulls some of its highest ratings from off-net acquisitions like CBS’ NCIS. “There’s something wrong with that. There’s no other business in the world where the money doesn’t follow the eyeballs.”

There is certainly some validity to Moonves’ argument. When USA isn’t airing original hits like Burn Notice and Royal Pains, NCIS is its most-watched scripted program. For example, on April 9, an NCIS rerun delivered 3.37 million viewers in the 10 p.m. time slot.

Then again, Moonves’ beef ignores the fact that USA laid out $1 million per episode of NCIS when it acquired the off-net rights from CBS Television Distribution. In November 2009, the cable net poured even more cash into the franchise, investing $2.5 million per episode for the rights to NCIS: Los Angeles. (USA won’t start airing the NCIS spinoff until 2013.)

USA takes in around 58 cents per sub per month, or $57.7 million. When stretched out over an entire year, that adds up to a tidy $692.2 million in affiliate revenue. By all accounts CBS takes in a little more than $250 million per year in retrans fees.

During the interview with Smith, Moonves opined on everything from the FCC—the CBS boss suggested that Julius Genachowski and company should keep their collective noses out of negotiations between operators and broadcasters; a stance the FCC chief appears to endorse—and the viability of “third-screen” distribution.

“Whether it’s iPad, Hulu, [or] Netflix, they all need our content. Our decision is, how do we get paid for this content without cannibalizing our core?” Moonves said. “Our bread and butter, broadcasting—it's network television number one; number two is our syndication market—those two revenue streams are far greater than any of these new devices.”

Immediately following his chat with Smith, Moonves took his message to the airwaves, sitting for an interview with CNBC’s Julia Boorstin. While the conversation lead off with another pass at the Hulu question, the Q&A became much more focused on a pair of high-profile CBS personalities.

Asked about what it might take to bring Charlie Sheen back to the set of Two and a Half Men, Moonves sidestepped the question, saying only that he remains “very fond” of the actor. “Right now there are a lot of legal matters going on with the show, so I’m not going to comment any further than that,” he said.

As to where things stand with CBS News anchor Katie Couric, Moonves was a bit more expansive.

“Obviously, we are having conversations with Katie right now. It’s getting to be crunch time where Katie and CBS are going to make a decision,” he said. “There are a lot of things in the pot. We’re talking about a potential syndication deal and a lot of other options…and I think you’ll hear something in the next few weeks on what the future of Katie is and what the future of CBS News is.”