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Moonves: We’ll Talk with Large MSOs

Hot off a retransmission-consent deal with nine small cable operators, CBS CEO Les Moonves said Tuesday that agreements with larger operators like Comcast and Time Warner Cable could be negotiated before their existing pacts expire.

CBS announced last week that it had reached retransmission consent deals with nine unnamed cable companies, representing more than 1 million subscribers. While the broadcaster did not reveal terms of the agreements, it is believed that CBS received cash for retransmission consent in the deals.

While CBS has pushed for cash for retrans for years and has been successful in getting paid in several smaller deals, there has been some skepticism that the broadcaster will be able to extract cash payments from larger operators, which represent a larger portion of the network’s advertising revenues. CBS’ deals with Comcast and Time Warner expire in the 2009-10 time frame.

On a conference call with analysts to discuss its fourth-quarter results, Moonves said it is possible that CBS could head to the negotiating table with the country’s two largest cable operators before then.

“We are certainly open and willing to talk with them at any point in time,” he added. “I guess it’s very possible that negotiations can begin much earlier than when the contracts are up.”

Moonves didn’t reveal any further details on the broadcaster’s retransmission-consent pact with the nine cable operators, but he said the lack of acrimony in the negotiations perhaps signals an attitude shift on behalf of operators.

“These nine MSO deals were done without a whole lot of noise -- there weren’t big newspaper ads, there weren’t big fights, there [wasn’t] anything pulled off the air,” he added. “I think the MSOs are realizing that it is better to get along than to fight. Yes, the big ones are up in 2009 and 2010, but you’ll see us do a number of deals before then.”

Moonves also said CBS’ huge television library has not found its way to video-on-demand mainly because it hasn’t been offered the right price. That could change in the relatively near future.

“Our TV library is unbelievably valuable and it has been relatively undermined,” Moonves added. “And the main reason is that we want to get paid appropriately for it. We will eventually have our library out there -- it will be on-demand either through advertising subscription or pay-per-view. It is inevitable that our library is going to be on the Internet and downloaded -- we will be making deals for this content … Look for more things in the fairly near future.”

For the quarter, revenue at CBS was up 2% to $3.9 billion and cash flow rose 11% to $872.7 million, driven by strong growth at its television and outdoor divisions.