CBS Chief Executive Les Moonves says he has no plans for major acquisitions in the immediate future, but is looking to make strategic deals in the new-media sector.
Moonves said Lion Gate Entertainment , for example, is too pricey and the network isn't interested in acquiring an overseas production company. CBS could, however, launch a small studio and produce a few movies each year.
"That could be a fun thing to do," Moonves said in a wide-ranging exclusive interview with CNBC's David Faber on cnbc.com. "We have the platforms … to promote those movies."
Moonves said CBS has not committed its stash of cash to any single project and ruled out any big, one-time special dividend to shareholders.
Share Buyback In The Cards
Moonves said the company plans a share buyback valued at $1 billion to $1.5 billion, but didn't disclose a timetable. CNS shares are up about 20% in the past year.
"The main thing investors want to hear is that, yes, we have a lot of cash, but that these guys aren't going to do anything stupid with that cash," he said. "I've heard the rumors that we're going to buy a movie studio, which we're not going to do."
Moonves made it clear than CBS plans to invest in new media, but will move carefully. “We’re not going to make a major acquisition – spend $500 million on one company,” he said.
"We have to put this content all over the place and get paid for it," he said. "…The great news for us is the perception that CBS is no longer (a) traditional company."
Moonves said CBS has profitable deals with Google, Yahoo! And Amazon.com. He said Google can't produce shows such as "CSI," "Survivor" or the "CBS Evening News." Google has great distribution, but is a very different company and, for now, a CBS ally. The most loyal viewers typically watch their favorite programs on TV about 50% of the time and use other media such as the Casco, YouTube or Tivo to watch their favorite programs at more convenient times.
Moonves said CBS makes more money selling ads on the Web than through Internet-based subscriptions.
"We Know How to Sell"
"We're an advertising-based company," he said. "We know how to sell."
He used the NCAA basketball tournament as example, saying the company made about $250,000 via pay-per-view TV in 2005 and $4.5 million by video streaming on the Internet in 2006. Moonves says he expects revenue to double in 2007
He stressed the need to move deliberately in a rapidly changing media world.
"I like the slow and steady pace we're doing," he said. “I like how we're playing our hand. Rest assured we're playing it safe…There's nothing wrong with having this cash and increasing dividends."
Moonves said the network will have sold all ads slots for the Super Bowl when the top two NFL teams clash in the first week of February.
The cnbc.com interview was recorded Monday but aired Tuesday.