CBS’ newly installed leadership team had something of a coming out event on Thursday as the company released strong third quarter earnings.
Joe Ianniello, CBS’ president and acting CEO, presided over a conference call with Wall Street analysts along with David Nevins, the Showtime chief who was upped to CBS’ chief content officer last month, and Chris Spade, the former Showtime chief financial officer who was promoted to CFO of CBS Corp.
The absence of longtime CBS leader Leslie Moonves was notable to longtime CBS Corp. watchers but analysts did not dwell on the shakeup that saw Moonves forced to resign Sept. 9 amid a wave of sexual harassment allegations.
Ianniello opened the session on a high note as CBS affirmed its financial guidance for the year, with revenue set to grow in the high single digits and earnings per share growth in the “high teens.”
“Our success continues to be fueled by all the ways we are executing on our long-term strategy,” Ianniello said.
The executive trio talked up CBS strength in content licensing, retransmission consent and reverse comp fees and the growth of its streaming platforms anchored by CBS All Access and Showtime.
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Content licensing coin alone was up 8% for the quarter to $933 million. Spade talked up the trove of 800 episodes of series that CBS has on deck for “monetizing this year and for years to come.” Nevins said the increased investment in content and the ability to distribute it around the world has made the company “one of the most attractive places for Hollywood creatives to bring their best work.”
Ianniello and Nevins emphasized the company’s plan to invest more money in production for CBS’ own channels as well as outside buyers. The company has to grapple with the strategic question of how much content to keep within the CBS-owned walls and how much to sell to the outside. That’s a big question in international markets. CBS All Access has plans to expand overseas — it’s already up in Canada and will launch soon in Australia.
“We don’t want to turn off the licensing pipeline. It’s been very successful for us,” Ianniello said. “We’re making those decisions tactically as the deals come up.”
While CBS All Access is still building its international outposts, it will likely make sense to continue licensing high-profile projects such as the upcoming CBS All Access reboot of “The Twilight Zone,” produced and hosted by Jordan Peele. “Some of these things we’re not ready to capitalize on with the subscription business (so) we might as well take the money and re-invest it so we can do more with it.”
Nevins said the company’s expanding footprint gives them the luxury of choice.
“The more we build our own platforms, the more optionality we have on where and when to monetize,” he said.
The CBS Corp. board has initiated a formal search for a permanent CEO successor to Moonves. Ianniello is a candidate for the top job, although his close association with Moonves during the past dozen years, in his prior role as CFO and COO, is seen as a handicap.
CBS has seen a number of veteran executives depart during the past two months amid the Moonves shakeup. Ianniello told analysts he did not anticipate any other “significant changes” on the senior management front. In a departure from Moonves’ M.O. for earnings conference calls, Ianniello made a point of highlighting his newly promoted colleagues.
“I want to give them exposure to Wall Street so you can all see how deep and talented they are,” he said.