It’s show time at CBS, certainly not news time. CBS chairman and largest stockholder, Sumner Redstone, killed the notion that news and journalism were an important CBS heritage when he named show biz tyro Les Moonves, a former bit-part actor and TV entertainment executive, CBS’s CEO in 2005 when Redstone split CBS and Viacom into separate companies.
Moonves is a typical old-fashioned Hollywood mogul who believes that stars are the most important element in the success an entertainment program. He obviously believes that CBS’s showcase news broadcast, “The Evening News” is not a news program but an entertainment program – a show – which is why he lured Katie Couric away from NBC to be its anchor. He thought she would bring personality and show biz spark to the show. But the largely 65+ audience for “The Evening News” didn’t find perkiness a sufficient substitute for knowledge of current events or news judgment. The show’s ratings dropped to an even lower third place than before Cute Katie came on board.
CBS stock has dipped precipitously during Moonves’s tenure, as Wall Street sees little growth opportunities in a media company that depends almost exclusively on advertising revenue (TV network, TV stations, radio stations, outdoor, etc.), unlike other large media conglomerates that have multiple revenue streams. As ad dollars migrate to the Internet and as network TV ratings decline, the inevitable reduction in ad revenues will require drastic expense reductions in order to keep profits and the stock price from further declines. Therefore, Moonves has to cut news expenses, included Katie’s bloated $15 million salary.
Stockholders must wonder why she is making $15 million for being unsuccessful and why Moonves is paid even more (over $20 million) for being equally as unsuccessful. But in Mooves’s case, he’s got excellent company among media executives who are given outrageously, unconscionably large compensation packages for doing a terrible job for their stockholders – Barry Diller, Dick Parsons, Jeff Bewkes, Arthur Sulzberger, and on and on. So to keep his pay up in the clouds, Moonves, has to blame someone, so he blames Cute Katie, not himself, of course, for making such a stupid decision in the first place.
He’s also rumored to be trying to outsource news to CNN. Why not? Paying $7 million a year for a news bureau in Baghdad and then not using a package from Baghdad on “The Evening News” is a huge waste of money, which Moonves is well aware of. So why not combine news bureaus in order to reduce expenses? In fact, why not just eliminate CBS News entirely and have a bundle, which is what he has been rumored to be considering.
Here’s what Moonves could do to preserve profits and his job:
1) Eliminate CBS News – close all bureaus, terminate all personnel, and sell all equipment and assets associated with news – a big one-time charge, but good for future profits, which Wall Street would like.
2) Eliminate “The Evening News” and give that time back to local affiliates, including the CBS owned TV stations. This move would increase the revenue at local stations that could sell the time locally and improve the time-period ratings with game shows or reruns, which are badly beating “The Evening News” in the ratings. It would also give Moonves a good excuse for firing Cute Katie, who would save face and be able to say, “It was not my fault.”
3) Spin off its popular “60 Minutes” into a separate company that could produce investigative programs not only for CBS but for other networks, especially cable networks.
4) Create a CBS News cable channel on which it would run its library of old news programs such as “60 Minutes,” Edward Morrow’s “See It Now” and “Person to Person,” “CBS Reports,” and “The Evening News With Walter Cronkite.”
5) Cancel the third-place “The Early Show,” which isn’t succeeding in spite of the presence of Moonves’s young wife, Julie Chen, and replace it with reruns of the CBS prime time program “Big Brother” starring Moonves’s young wife, Julie Chen. He’d save a lot of money and keep his wife happy, two very important things to do for a man who is approaching 60.
Don’t be surprised if any or all of these things happen, because it’s show time at CBS, and in show biz survival is the name of the game.