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Seeking Big Upfront Hikes, CBS Sticking to Its Guns
With upfront negotiations under way, CBS CEO Les Moonves continues to predict big gains.
"We anticipate very strong double digit growth," said Moonves, speaking Thursday morning at the Nomura Securities U.S. Media Summit.
Market sources say that CBS has come into the market asking for 18% increases in commercial prices on a cost per thousand viewers (CPM) basis, and has been holding firm to that level during talks with buyers.
Last week, Fox did deals with major agencies that gave the network increases of about 11%. Often in the upfront market, when one network establishes a price, other networks and other buyers follow along.
Moonves was asked if he was disappointed at the prices that Fox was accepting. "Fox plays their game. We play our game and I like our game," he said.
"We're not going to sell at 9 or 10%," he said.
Prices in the scatter market are 40% higher than advertisers paid in last year's upfront, Moonves said. "When you know scatter's up that high, it gives us the confidence to say our CPMs better be up mid-double digits or else we'll wait."
"If you don't want to pay us now, we'll wait," he said, adding that he wouldn't want to be the media buyer that turned down what CBS was asking now and had to pay huge increase in the scatter business.
"We've said to our [sales] guys if we don't get our pricing, we'll sell 20% of our inventory [in the upfront] and we'll sell 80% in scatter. Obviously that's an exaggeration, but we don't have a great fear [that the scatter market will be down.]"
He added that CBS offers a stable, consistent schedule. "We've proven time and time again we deliver what we promise," without at lot of make goods for audience under-delivery. He added that the network would have some interesting fall premieres, including Two and a Half Men with Ashton Kutcher, which he said could draw an audience the size of the AFC Championship game. "It's a good time to be us."
Moonves added that CBS will not be a bidder for the next batch of Olympic Games. "Unlike a lot of CEOs I didn't get a trip to Switzerland," he said. "It's not going to be a cost effective thing for us."
