CNBC's David Faber Interviews CBS CEO Les Moonves

Broadcasting live from the UBS Media Conference, David Faber interviewed one of the keynote speakers live on Power Lunch. CBS CEO Les Moonves had just finished his speech to the conference, when he sat down with Faber to discuss, amongst other things, advertising revenue in broadcasting, and of course, the Comcast purchase of NBC Universal.

Below is a transcript of the interview, followed by the video.

Faber: Thanks, Sue. That's right, we're here at the UBS media conference where CBS CEO Les Moonves just presented. I would like to there if we can. you said some things that got a positive reaction from some of the shareholders about the advertising market and tell us what we're seeing at this point in terms of ad spending.

Moonves: Overall, all of our businesses that are dependent on advertising are doing much better and the network marketplace, the scatter pricing is up about 25% from where it was at the up front. So we're seeing, you know, a number of advertisers who were hesitant to buy very far in advance are now coming back into the marketplace and most notably automotive.

Faber: They were spending virtually nothing so I would assume.

Moonves: They've come back up and pharmaceuticals and retail and financial services and we're seeing a number of our major categories coming back.

Faber: Are you getting any visibility in terms of how long the spending comes back. Does it come back and then go away?

Moonves: Once again, visibility isn't quite what it used to be, but we're seeing it further in advance and I think people who didn't buy in the traditional way which was buy in June for the entire year, they've seen the pricing go up, and there are some regrets that they didn't buy then, you know? Our local businesses, the good news, TV stations and radio stations we're really seeing some light at the end of tunnel. Pacing is improving considerably over the last few quarters, and we're actually very optimistic about 2010.

Faber: Most people think local's sort of done.

Moonves: I know, but you know what we said second quarter would be better than first and it was. Third better than second and fourth better than third and it will continue into the first quarter of next year. So once again, I don't want to go overboard, but we're very optimistic.

Faber: So you see up 25 at least staying constant.

Moonves: Up 25 in the network is constant, yes.

Faber: Last week we had a deal of our own here at CNBC, NBC. I'm curious as to your reaction to Comcast's plan to take control of NBC.

Moonves: Well, I think it's a very exciting deal. Clearly the Comcast guys, Brian Roberts and Steve Burke are phenomenal operators and they've run Comcast in a terrific way. The reason I'm excited about it is, these are msos. They ran a large cable operation and they valued content. they went out and they bought a content company which is primarily what we are as well. in addition, it shows that the marketplace is now open. People are making deals. So I view it as a positive thing. I think they're getting a very good acquisition here. It's interesting because we do a lot of business with Comcast and now they've bought NBC which is a major competitor of ours so it will be very interesting.

Faber: What does interesting mean?

Moonves: We do a lot of business with Comcast. Now that they own the network, the good news is they realize the good retransmission fees, which is good for us.

Faber: Is re-trans going to go up in general? Will you see revenues from retransmission?

Moonves: We've begun seeing that with Time Warner and Cablevision. We anticipate that will continue. We think it is an important part of our future and we'll be paid dual revenue streams.

Faber: We're talking near term advertising better and re-trans revenues may very well come up, but the long haul, a lot of people look at CBS' business model and still say as UBS does in their note here. Over the long term we see challenges to the core business. 67% of your revenue comes from advertising. what do you answer when people say your model's got to change. You can't be a network with affiliates and you've got to be something different.

Moonves: People underestimate the network business and network television is still very strong and our local assets are still very strong and yes, we rely a great deal on advertising and we may have been the first one to be hit by the recession, but considering how our stock has rebounded over the last 52-weeks, people have a lot of faith in advertising businesses. So I love the position we're in. We are primarily a content business and as long as we continue to provide premium content which is what we're doing and we're the number one network and we're getting paid for, life is good.

Faber: We don't have time to talk about the ways these are dis-intermediated in terms of distributing that content

Moonves: By the way, we get paid for our content in dozens and dozens of different ways. When people say your model's old-fashioned. No, we just don't get paid from advertising we sell in to syndication, we get paid online, etcetera, etcetera

Faber: Finally I want to end up here, as the world turns you're canceling a 54-year-old soap opera?

Moonves: You know what? The days of the soap operas have changed very much. "guiding light" left last year. "as the world turns" will leave this year. they've had long and distinguished runs and their day is over.

Faber: I guess we are as well. Leslie Moonves, thanks for your time. Leslie Moonves, CBS CEO, Tyler, back to you.