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CNBC Exclusive: CNBC Transcript: CBS Chairman & CEO Leslie Moonves Speaks with CNBC’s David Faber on “Squawk on the Street” Today

WHEN: Today, Thursday, September 14th, 2017

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with CBS Chairman & CEO Leslie Moonves on CNBC's "Squawk on the Street" (M-F, 9-11am ET) today, Thursday, September 14th, 2017. Following is a link to the interview on CNBC.com: https://www.cnbc.com/video/2017/09/14/cbs-les-moonves-nfl-still-best-property-on-television-not-worried-about-ratings.html and https://www.cnbc.com/video/2017/09/14/cbs-les-moonves-people-are-cutting-the-cord-to-smaller-services.html.

All references must be sourced to CNBC.

DAVID FABER: WELCOME BACK TO "SQUAWK ON THE STREET." IM DAVID FABER AT THE COMMUNACOPIA CONFERENCE. MY GUEST IS LES MOONVES, THE CEO OF CBS ITS BEEN A WHILE SINCE WE TALKED IN PERSON GLAD TO HAVE THAT OPPORTUNITY.

LESLIE MOONVES: PLEASURE TO BE WITH YOU.

FABER: YOU HAVE SPOKEN HERE AS WELL NOT VERY LONG AGO. YOU MADE AN ARGUMENT THAT YOU HAD MADE IN PREVIOUS INTERVIEWS OF LATE WITH ALL THE FOCUS ON OVER THE TOP AND THE DISAPPEARANCE OF THE BUNDLE. YOU CONTINUE TO SAY, THERES A MISCONCEPTION. THE MOVE TO OTT IS A POSITIVE FOR US ARE PEOPLE LISTENING ARE THEY GETTING THIS?

MOONVES: THEY ARE STARTING TO GET IT WHEN OTHER COMPANIES TALK ABOUT THE LOSS OF CABLE SUBS AND THE PEOPLE ARE CORD-CUTTING. WHEN PEOPLE ARE CORD-CUTTING OR THEYRE LEAVING CABLE, THEYRE GOING SOMEWHERE. THEYRE NOT GOING TO THE THIN AIR. SO THEY ARE BUYING OTHER SERVICES, AND WE ARE INVOLVED WITH THE TRADITIONAL MVPDs WHO NORMALLY CARRY OUR CHANNEL, BUT WERE ALSO INVOLVED WITH SKINNY BUNDLES, THE ONES THAT ARE DOING SMALLER PACKAGES OF 40 CHANNELS, AS WELL AS WE HAVE CBS ALL ACCESS AND SHOWTIME OVER THE TOP, WHICH ARE DIRECT TO CONSUMER OFFERING. SO, NO MATTER HOW YOU WANT YOUR CBS, THERES DIFFERENT WAYS TO GET IT, AND IF YOU LEAVE ONE SERVICE FOR ANOTHER, WE ARE STILL THERE AND WERE GETTING PAID MORE FOR IT

FABER: RIGHT I WANT TO COME BACK TO THAT. OVERALL, YOU AND I HAVE TALKED ABOUT THIS ITS BEEN A SUBJECT NOW FOR SO LONG, BUT IT APPEARS WERE IN THE MIDST OF REAL CHANGE, WHERE PEOPLE ARE CUTTING THE CORD IN EVER INCREASING NUMBERS. IS THAT YOUR SENSE

MOONVES: NO QUESTION ABOUT IT, NO QUESTION ABOUT IT. I THINK THERES ALWAYS GOING TO BE A PLACE FOR THE LARGER BUNDLES, THERE WILL ALWAYS BE HOUSEHOLDS WHO WANT 180 OR 200 CHANNELS, BUT PEOPLE ARE CUTTING THE CORD, THEY ARE GOING TOWARDS A 40-CHANNEL PACKAGE OR A NETFLIX OR A CBS ALL ACCESS. ITS DEFINITELY HAPPENING NOW.

FABER: ON THIS SUBJECT, THOUGH, YOU KNOW, RETRANS DOLLARS HAVE BECOME IMPORTANT FOR CBS AND YOU HAVE MADE A POINT OF THAT BY 200 YOURE TALKING ABOUT CERTAIN TARGETS, BUT WHEN YOU LOSE VIDEO SUBS, THOSE LOCAL AFFILIATES ARE BEING CUT OFF AREN'T THEY DOESNT THAT POTENTIONALLY INPINGE ON YOUR RETRANSD DOLLARS BEING PAID FROM THE CABLE COMPANIES TO LOCAL AFFILIATES, THEREFORE, CBS?

MOONVES: YOU KNOW WHAT, THEY ARE GOING ELSEWHERE. IF THEY LEAVE THE CABLE OPERATOR SYSTEM AND GO TO AN OVER THE TOP SYSTEM, WE WILL STILL GET PAID FOR THOSE SUBS

FABER: OVER THE TOP GUYS INCLUDE LOCAL AFFILIATES, AS WELL?

MOONVES: THEY DO ON ALL ACCESS, THE LOCAL AFFILIATES WILL SHARE IN THAT MONEY. IN ADDITION, THEY ARE MAKING DEALS WITH THE SKINNY BUNDLES AS WE ARE AS A MATTER OF FACT, WELL OFTEN MAKE DEALS FOR THEM. WE REPRESENT OUR AFFILIATES IN THE DEALS WITH THE HULUs AND THE YOUTUBES OF THE WORLD, WHICH ARE TWO OF THE BIGGER, YOU KNOW, DIRECTV NOW, AS WELL, ARE THE SKINNY BUNDLES PROPRIETORS AND OUR AFFILIATES ARE PART OF THAT SYSTEM SO THEY GAIN BY IT AND AS A RESULT WELL GET PAIDBY THEM, AS WELL

FABER: SO NO DIMMUNITION OF YOUR OVERALL RETRANS DOLLARS AS A RESULT OF INCREASING TREND OF PEOPLE DROPPING VIDEO

MOONVES: NONE WHATSOEVER AS A MATTER OF FACT WE SET OUR TARGET BY 2020 WELL HAVE $2.5 BILLION IN REVENUE FROM RETRANS AND REVERSE COMP WERE NOW SAYING IF YOU INCLUDE THE SKINNY BUNDLES, THAT NUMBER WILL GO EVEN HIGHER, MAYBE $2.7 AND BEYOND

FABER: YOU MENTION ALL ACCESS, OF COURSE, AND YOU HAVE PRETTY SIGNIFICANT TARGETS THERE, ALREADY AT 4 MILLION BETWEEN SHOWTIME AND THE CBS ALL ACCESS, YOURE TALKING ABOUT GETTING TO 8 MILLION BY 2020 IM CURIOUS, DISNEY JUST CAME INTO THE MARKETPLACE WITH THE IDEA OF A DIRECT TO CONSUMER OFFERING WERE GOING TO GET IT 2019

MOONVES: CORRECT

FABER: DO YOU THINK ITS GOING TO BE A SUCCESS?

MOONVES: I THINK IT PROBABLY WILL.

FABER: WHY

MOONVES: nDISNEY HAS GREAT PRODUCT. ONCE AGAIN, AS YOU LOOK INTO THE UNIVERSE, DISNEY SAID, OKAY, THEY DIDNT WANT TO BE PART OF THE NETFLIX UNIVERSE, THEY WANTED TO DO IT THEMSELVES ITS SOMETHING WE DECIDED WE WOULD DO A FEW YEARS AGO WE WENT INTO THIS IN 2015, AND ONCE AGAIN ITS OFFERING CONTENT IN DIFFERENT WAYS, AND PEOPLE ARE GOING TO CHOOSE WHAT THEY WANT TO WATCH. PEOPLE ARE TIRED OF PAYING FOR THINGS THEY DONT WANT TO WATCH. THERES A LOT OF PEOPLE WHO WANT DISNEY, JUST LIKE THERES A LOT OF PEOPLE WHO WANT CBS YOU KNOW, WE LAUNCH OUR BIG GUN, STAR TREK, IN ABOUT TWO WEEKS.

FABER: DOES THAT WORK, DOES IT ATTRACT PEOPLE BECAUSE OF COURSE I THINK STAR TREK, AND I THINK STAR WARS, WHICH DISNEY IS GOING TO USE TO HELP TRY AND ATTRACT PEOPLE

MOONVES: WE THINK STAR TREK IS GOING TO DO EXTREMELY WELL IVE SEEN THE FIRST TEN EPISODES, ITS REALLY, REALLY GOOD WE THINK THATS GOING TO BE A BIG SHOT IN THE ARM FOR ALL ACCESS. ALL ACCESS ITS DONE FAR BETTER THAN WE THOUGHT IT WOULD DO, BUT THIS IS OUR FIRST BIG GUN OUT OF THE GATE FOR STAR TREK.

FABER: SPORTS IS ALSO AN IMPORTANT COMPONENT OF ALL ACCESS.

MOONVES: CORRECT

FABER: LETS TALK ABOUT THE NFL, WHICH HAS BEEN VERY IMPORTANT FOR CBS FOR A LONG TIME. I REMEMBER TALKING TO KARMAZIN MANY, MANY YEARS AGO ABOUT PAYING SO MUCH AND SAYING ARE YOU PAYING TOO MUCH I GUESS WE CAN ASK THE SAME QUESTION NOW THE RATINGS LAST THURSDAY WERE NOT GOOD GOOD GAME, TOO, KC AND THE PATRIOTS ARE YOU WORRIED GIVEN LAST YEAR'S PERFOMANCE AND THIS YEARS THAT NFL RATINGS ARE DOWN FOR GOOD?

MOONVES: NO. IM REALLY NOT CONCERNED IF YOU LOOKED AT THE SUNDAY NIGHT GAME, THAT WAS UP. SUNDAY AFTERNOON WAS DOWN A BIT, BUT WE WERE IN THE MIDDLE OF THE BIGGEST HURRICANE IN DECADES SO, WHEN YOU SEE, YOU KNOW, MILLIONS AND MILLIONS OF PEOPLE WATCHING THE WEATHER CHANNEL, I THINK THE NFL IS STILL THE BEST PROPERTY ON TELEVISION IM NOT WORRIED ABOUT A DECLINE.

FABER: WHAT ABOUT AMAZON STREAMING TEN GAMES? THEYLL BE STREAMING THE SAME TIME YOURE BROADCASTING THEM. DOES THAT HURT

MOONVES: NO, IT WONT HURT. I THINK THE NFL, LIKE EVERYTHING WITH I.P., INTELLECTUAL PROPERTY IS TRYING DIFFERENT WAYS OF DOING IT REMEMBER A VIEWER WHO IS WATCHING ON AMAZON GETS COUNTED ON CBS I THINK AS WE GO FORWARD, THE NFL WILL HAVE A NETWORK PRESENCE AND WERE STILL THE BIG GUN THERE, STILL THE MASS PROVIDER, BUT THERE WILL BE A DIGITAL PARTNER IN TERMS OF THIS DEAL AND EVERY FUTURE DEAL THAT THEY DO

FABER: HOW DOES THAT PLAY OUT? IS IT YOUR EXPECTATION YOULL BE COMPETING AGAINST YOUTUBE AT SOME POINT IN THE NOT TOO DISTANT FUTURE WE MENTIONED AMAZON ALREADY FOR THESE RIGHTS AS THEY COME UP

MOONVE: I THINK AS OUR NEXT NFL DEAL COMES UP IN 2022 FOR THE BIG PACKAGE, I THINK THEYLL BE PART OF THE CONVERSATION. I THINK BROADCAST WILL BE PART OF IT AND I THINK YOULL SEE COMBINED OFFERINGS FROM NOW ON SO I DONT THINK IT DOESN'T WORRY ME ABOUT US BEING EXTINCT. ONCE AGAIN, THE SUPER BOWL IS ALWAYS ON THE NETWORK, ITS ALWAYS THE BIG PLACE NOWHERE ELSE DO YOU GET 20 MILLION PEOPLE EVERY WEEK WATCHING "THE BIG BANG THEORY," NOWHERE ELSE DO YOU GET 110 MILLION PEOPLE WATCHING THE SUPER BOWL THE NETWORKS WILL STILL BE A BIG PART OF IT

FABER: GIVEN THE IMPORTANCE, THOUGH, OF OVER THE TOP AND WHAT YOURE TALKING ABOUT DIRECT TO CONSUMER WITH ALL ACCESS, WHAT I HEAR ABOUT SOME OF THESE SERVICES IS THE TURN IS HIGH PEOPLE TURN THEM ON WHEN THEY KNOW THERES SOMETHING GOOD AND CAN EASILY TURN THEM OFF IS THAT YOUR EXPERIENCE IS THERE HIGHER TURN OF ALL ACCESS?

MOONVES: AS I SAID, WE HAVENT HAD OUR BIG GUN YET, WHICH IS STAR TREK. WELL SEE. WE EXPECT THATS GOING TO GIVE US A GREAT SHOT IN THE ARM WHAT SHOWTIME HAS DONE FOR THEIR OFFERING, THEYVE SPREAD OUT THEIR PREMIER OFFERINGS AS OPPOSED TO TWO AT A TIME, THEYLL DO A NEW SHOW ONCE A MONTH THROUGHOUT THE YEAR TO PREVENT CHURN AND WE THINK THATS ABSOLUTELY WORKING.

FABER: IS NIELSEN STILL RELEVANT

MOONVES: YES THEY ARE STILL THE WAY WE GET PAID

FABER: SO MANY PEOPLE ARE WATCHING STUFF OUTSIDE OF THEIR HOME, WATCHING IT ALL THE WAY. DO THESE GUYS REALLY ACTUALLY MEASURE THAT AUDIENCE?

MOONVES: NIELSEN IS NOT PERFECT. THEY ARE GETTING BETTER AND BETTER WE WANT THEM TO BE BETTER AND BETTER WE NEED THEM TO MEASURE DELAYED VIEWING, WHICH BECOMES A BIGGER AND BIGGER PIECE OF THE PIE. LOOK, FROM BROADCAST WE GET A LOT OF PEOPLE WHO WATCH THE SHOW IN THE GIVEN TIME, BUT OVER THE COURSE OF THE NEXT SEVEN DAYS THE NUMBER COULD GO UP AS MUCH AS 50%, 60%, 70% WE NEED NIELSEN TO CAPTURE THAT. NIELSEN IS STILL THE ONLY GAME IN TOWN. OTHERS ARE COMING UP NIELSEN IS STILL THE SCOREKEEPER. SO WE STILL HAVE TO PLAY BY THEIR RULES.

FABER: ALTHOUGH ADS AS A PERCENTAGE OF YOUR OVERALL REVENUE HAVE COME DOWN AND DOWN

MOONVES: EXACTLY

FABER: WHICH I CAN REMEMBER TALKING ABOUT THIS TEN YEARS AGO

MOONVES: RIGHT IT WAS A GOAL OF OURS TO GET OUR ADVERTISING, WHICH HAD BEEN OVER 70%. WERE NOW BELOW 50%, DOWN CLOSE TO 45% IN ADVERTISING REVENUE, WHICH IS A MAJOR CHANGE. WE HAVE, OBVIOUSLY, SPUN OFF THE OUTDOOR BUSINESS, WERE IN THE PROCESS OF SELLING OFF THE RADIO BUSINESS, AND THE OTHER REVENUE STREAMS THAT WE HAVE, RETRANS REVERSE COMP, OVER THE TOP, PLUS CONTENT SALES INTERNATIONALLY HAVE GROWN THESE ARE NONADVERTISING RELATED BUSINESSES

FABER: BUT ON ADVERTISING, I HAVE TO ASK YOU ONE, I THINK IPG WAS RECENTLY AT A CONFERENCE, THEY SEEM TO INDICATE SCATTER PRICING WAS DOWN IS THAT YOUR EXPERIENCE?

MOONVES: NOT TRUE. NOT SEEING IT AT ALL

FABER: SEEING STRENGTH FROM THE ADVERTISING MARKET RIGHT NOW

MOONVES:FIRST OF ALL, WERE ABOUT TO BEGIN THE SEASON WE JUST CAME OFF AN EXTREMELY STRONG UP FRONT. CPMs WERE UP, VOLUME WAS UP. BY THE WAY, UP ACROSS THE BOARD FOR ALL NETWORKS, EVEN NETWORKS THAT WERE DOWN CONSIDERABLY WERE UP IN ADDITION THATS BACKED UP BY A VERY STRONG SCATTER MARKET SCATTER IS NOT GOING TO COME INTO PLAY FOR A LITTLE WHILE BECAUSE THE SEASON WILL BEGIN, BUT WERE NOT SEEING ANY WEAKNESSES

FABER: NONE IS YOUR EXPECTATION

MOONVES: ABSOLUTELY.

FABER: HOW WOULD YOU OVERALL THEN CHARACTERIZE THE ECONOMY THAT YOURE CURRENTLY SELLING INTO?

MOONVES: YOU KNOW, WE FEEL VERY BULLISH ON ADVERTISING WE DO. WE THINK, YOU KNOW, WE CANT WAIT FOR THE SEASON TO BEGIN THIS IS AN ODD TIME OF YEAR, BECAUSE AS YOU TALK ABOUT ADVERTISING, ITS ALL GOING TO DEPEND ON RATINGS, AND NOT WHAT THE OVERNIGHT RATINGS IS REMEMBER, DELAYED RATINGS ARE NOW MUCH MORE IMPORTANT.

FABER: LESLIE, WE ALWAYS APPRECIATE YOUR TAKING TIME WITH US. ALWAYS A PLEASURE.

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