In another bold move aimed at reversing poor ratings, CBS announced Wednesday that Leslie Moonves, president of Time Warner Inc.'s successful television production group, will become president of CBS Entertainment and take charge of developing and scheduling prime-time television.
The appointment was praised by analysts and executives because of Moonves' stellar record in producing hit shows, including "ER" and "Murphy Brown." CBS ratings have fallen to third place from first place just a year ago, and Moonves will be under pressure to improve programming.
"No one has a better track record in terms of getting good shows on the networks and shows that work than Moonves does," said Jessica Reif, a media analyst at Merrill Lynch. "That's the kind of person CBS needs in that position."
In the wake of Moonves' appointment, Peter Tortorici, president of CBS Entertainment for only 14 months, resigned. Tortorici, who unveiled CBS' fall schedule to wide praise by affiliates and the advertising community last month, said he only found out about the negotiations with Moonves on Tuesday and declined CBS' offer to become Moonves' No. 2. He said, however, that he is leaving without bitterness.
Sources close to the negotiations said Moonves' compensation package will be worth more than $20 million over four years, and much more if the network is sold, making him one of the highest-paid executives in the business. Moonves, who will be based in Los Angeles, will also have the title of executive vice president of the network's broadcast group, giving him responsibilities over programming such as sports and news.
Reif said CBS stock, which closed at $67.625 on the New York Stock Exchange, up 50 cents, didn't react more strongly to the appointment because it is already trading at a high price relative to earnings on account of year-old speculation that CBS is for sale.
The Moonves appointment comes only weeks after another attempt to improve ratings by removing Connie Chung as co-anchor of the "CBS Evening News."
Analysts and executives said the hiring is an indication that Peter Lund, who took over as president of the CBS/Broadcast Group after Howard Stringer left last year, is moving aggressively to reshape the network.
"This is Lund's work," said one CBS executive. "Lund has had a plan from Day One, and he is deftly going about putting in place the people he wants to work with. Stay tuned. There's more to come."
Some people speculated that appointing Moonves is also an indication that Laurence Tisch, chairman and chief executive of CBS, is giving Lund a freer hand and that he perhaps even intends to hold on to his nearly 20% share of the company, at least until he turns the network around.
"Tisch has told me he has no intention of selling, and I take him at his word," Moonves said late Wednesday.
Sources familiar with Moonves' contract with CBS said it is not based on improvements, as is the case with most heads of network entertainment, but is guaranteed no matter what happens to the ratings. Moonves is protected if the network is sold, the source said. Moonves would not elaborate on any aspect of the contract.
Television executives say Moonves is at the height of his bargaining power, with little room to improve Warner Bros. Television, having just completed one of the most successful pilot seasons in his five years as its head. This fall, Warner Bros. has 20 prime-time series on the schedule, far more than any other studio, with 12 renewals and eight new shows picked up, including top-rated "Friends" and the new CBS series, "Bless This House."
Moonves is expected to start at CBS within weeks. Though his contract with Warner Bros. expires in September, that should be easy to unwind, sources say, because he will now be in a position to buy programs from Warner Bros.
"I've had a wonderful adventure at Warner Bros.," said Moonves, 45. "I felt it was time for a new challenge, and running a network was always something I wanted to do. This network is one where I felt I could have some impact."
Moonves, who turned down offers from the newly formed DreamWorks SKG, said he will be able to significantly improve ratings by next year, though he wouldn't say what changes are in store or where he sees vulnerabilities.
"There's a lot in the schedule that's good and lots that needs help," he said. " 'Bless This House' has a terrific shot at being a top show, though I realize my bias. 'Central Park West' also has a good shot.
"My first line of business will be to assess the personnel and all the programming. I haven't seen their backup programming," he said.
Warner Bros. Television did not name a successor to Moonves. Several television executives said that if Tony Jonas, the second in command, did not get the job, Time Warner might reach outside for someone with higher visibility, such as Kerry McCluggage, head of the Paramount Television Group.