With radio revenues increasing at double-digit rates and television advertising better than expected,
CEO Mel Karmazin Wednesday all but promised that his company would beat analysts' estimates for the first quarter.
"Those of you who follow our company might expect a pretty good first quarter," Karmazin said at the
Variety/Schroders Big Picture Conference
at New York's Plaza Hotel. The
consensus is 3 cents a share. In the year-earlier period, CBS earned $19 million, or 3 cents a share.
His talk, along with a spirited discussion of the movie business, was the highlight of the day-long conference, which otherwise failed to generate much news despite speakers who included
Chairman Bill Gates and
Chairman Gerald Levin.
Karmazin's comments sparked CBS stock, which jumped almost a point in the last few minutes of the trading day to close at a 52-week high of 39 3/8, up 1 3/8 . Shares in
, CBS' radio subsidiary, rose 11/16, or 2.8%, to close at 24 7/8.
Karmazin did not offer specific revenue or profit figures for the quarter. But the executive said that, in radio, which accounts for most of CBS' profits, "We are seeing first-quarter pacing and revenue growth that are the highest revenue growth I have ever seen
in more than 30 years."
In television, Karmazin said CBS is now forecasting that the crucial upfront market -- that is, advertisers' purchases during May and June of commercial time on the next season's shows -- could increase by as much as 15% compared with the 1998 upfront season. (He didn't say if this forecast applied only to CBS or across the board to all six networks.)
Not content to juice his stock with genuine good news about sales and profits, Karmazin also hinted at a spin-off of CBS's Internet assets, including its theoretical
Web site that would aggregate the company's radio station Web sites, into a theoretical company called
which CBS could then (theoretically) use to buy other Internet companies. Of course, just about every other media company has the same idea, and as Karmazin admitted, his company is well behind
in the race to build and brand a working portal. But given the continued hot market for Net stocks, why shouldn't CBS ride the bubble too?
Karmazin even was loose enough to joke with CBS Television President Les Moonves offstage before his speech. (Karmazin: "We have the
Touched By an Angel
is ours? Moonves: "Yes. God is looking down on you.") He also continued to air his public pipe dream of convincing the
Federal Communications Commission
to change its rules to let him buy another network.
"There should be no objection to our owning two networks," Karmazin said, citing "advantages" in dealing with advertisers and the studios that produce shows. That, of course, is precisely why the
isn't interested in letting Karmazin double his market power with another network.
Film isn't a very big business or a very profitable business. But it sure is an interesting business. That was the lesson from a panel on film that included the presidents of
20th Century Fox
Walt Disney Studios
, as well as the director Joel Schumacher.
While the day's other panels included a predictable discussion of new media/old media convergence, a couple of speeches, and a fawning interview with Gates (who's putting on weight, has a new haircut and stirred wild controversy when he came out in favor of childhood vaccinations), the movie guys were in high gear. Granted, they didn't provide stunning insight into the lousy economics that plague the film business, but they did display actual personalities. The banter included the following exchange between Fox president Thomas Rothman and Disney chief Peter Schneider:
Rothman: "I think it's smart the changes you guys
Disney have made
by cutting back on your production schedule. ... Now you should suggest to Harvey Weinstein
, the critically acclaimed and Disney-owned studio that he shouldn't buy 45 movies a year."
Schneider: "Harvey's been very successful, Tom," alluding to the Miramax release,
Shakespeare in Love
, which won the Best Picture Oscar earlier this week.
Rothman: "What about the other 40?"
Later Rothman groused, "We probably grossed 20 times Miramax
But, if compliments count for anything, the real power broker at the panel was the man who said the least:
Creative Artists Agency
managing director Bryan Lourd. Rothman went out of his way to talk up Lourd. Lourd didn't return the favor.