CBS Class B Earnings Call Insights: Pilot Season Lineup and Affiliate Negotiations
Pilot Season Lineup
Benjamin Swinburne – Morgan Stanley: I’ll ask my question and follow-up on one shot here for efficiency purposes. Joe on the buyback and the Outdoor plans, you obviously create a lot of optionality for the Company as you move down this REIT path. So, it’s hard to pin down exactly what you might do with the capital over the next couple of years, but maybe one way to help us think about it is what’s the right way to think about leverage at the Company, your comfort level going forward, and maybe if you want to talk about what that might look like in an Outdoor sale or spinoff scenario with the core business? I think a year or so ago you talked about leverage ranges, but it’s been a while since you’ve updates us. And then last, on the content side, there was a lot of consternation about ratings back in the fall. I think people have calmed down a little bit now. But as you think about your schedule heading into the pilot season and into next fall, do you think you need to make any changes to the kind of lineup you’ve got, whether it’s more serialized, more comedy, more reality competition. These things tend to – they’re sort of fads come in and out and you guys have built a big business around procedurals. But I just would love to hear your thoughts on those genres and what you think makes sense longer-term for the network?
Joseph Ianniello – EVP and CFO: It’s Joe. Let me take the first part and then I’ll let Les answer the second part. Look, obviously, the Outdoor transaction is unlocking tremendous value and it’s creating financial flexibility. I think there’s no question in that again as evidenced in our actions to date. And the revenue mix I think more importantly in our business is obviously becoming more predictable, steady and recurring. So that gives us obviously a lot more confidence. So we’re going to continue to evolve our thinking on leverage, but obviously again as we keep – our focus is always going to be on returning value to our shareholders, so we’re going to continue to move that forward. But again there’s tremendous amount of financial flexibility being created here. I don’t have a target number, specific exact number, because it’s always again evolving. But again as I said, we certainly have more confidence in a steady recurring revenue stream.
Leslie Moonves – President and CEO: And on the ratings, as we’ve said, the ratings this fall were a little more difficult to read, number one. Number one; there were a number of preemptions because of political the season started a bit late. In addition, obviously the amount that we’re watching live is only about 60%. So, at first blush looking at what those ratings are were so hard to read and there is the normal sampling of the new stuff, yet we said guys just hang on, we are going to be fine and we are fine. We are ahead, we are better than even, we are ahead going into February, we are winning February suite by a lot and that’s more than just these special events that we’ve had. And as we look down the road as we are looking towards May once again we boarded a couple of more pilots than we have in previous years. As I mentioned the pedigree is pretty phenomenal about who we have and it’s going to be hard to get on a schedule in terms of types of programming, I’m going to say the same thing I have said for 18 years. The best shows are going to get on the schedule whether it’s a comedy, a drama, a procedural drama or not, my guess is there aren’t going to be a lot of new shows like there was last year which enables us to sell even better. Where our ratings are extraordinarily good and we should lead the pack as it comes to the upfront and I think we get out of the few new shows that we are not going to need very much.
Jessica Reif Cohen – Bank of America Merrill Lynch: Question on AXS, will you be handling the affiliate negotiations and can you give us some detail on what kind of content you will provide so they access your live events. And then on retrans I don’t know, I didn’t hear if you said that, but did you – did you give a number, simply you hit the $250 million target and can you give us roughly how much growth you would expect in retrans and reverse comp in the coming year?
Leslie Moonves – President and CEO: I’ll do the first and I’ll let Joe do the second. Regarding AXS, it’s sort of going to operate the way it is. Having the power of CBS I’m sure we’ll be able to increase affiliate fees, but it’s not going to be part of our negotiation. We’ll help out. We’ll join in when possible and when probable. In terms of content, we have an awful lot of live programming and this is going to involve some of the shoulder programming that we do. For instance, Backstage at the Grammys or pre-shows and post-shows, the Friday night event this past week at the Grammys, the tribute to Bruce Springsteen that was on AXS. So, we are going to work with them to provide a lot of content and it’s great to be in business with Mark Cuban and Tim Leiweke. They are good guys to be in business with and it’s a very exciting new prospect for us.
Joseph Ianniello – EVP and CFO: Just for the retrans number, I think when you combine it with reverse comp, we’ve said 2013 we’re going to approach the halfway mark to that $1 billion we gave you, so nearly $500 million for 2013, so we’re well on our way.
A Closer Look: CBS Earnings Cheat Sheet>>