Westinghouse Outlines CBS Lineup : Peter Lund to Be CEO, President

Seeking to answer some of the many unanswered questions about his company’s plans for CBS Inc., Westinghouse Chairman Michael Jordan on Tuesday outlined the new management structure for CBS and said that Westinghouse will make the financial investment necessary to turn CBS around.

“CBS is a tremendous asset that is currently under-performing,” Jordan said of the broadcasting company, which is a distant third in the ratings among the networks. “We have the team in place to rebuild CBS. And we are committed to investing the necessary resources to fulfill our vision for CBS.”

In contrast to the much-criticized strategy of former CBS owner Laurence Tisch, Jordan said that CBS plans to develop cable networks, with news and sports programming possible categories, and to seek opportunities for expansion overseas.

CBS Broadcast Group President Peter Lund will be chief executive and president of CBS, which Westinghouse Electric Corp. bought in a $5.4-billion deal approved last week by the Federal Communications Commission.

Lund, a longtime CBS executive, will oversee all CBS operations, including CBS Entertainment, CBS News and CBS Sports. Willard Korn, the Westinghouse Broadcasting executive who helped engineer the deal, will oversee the combined Westinghouse-CBS TV station group, which will reach a third of the country, along with its combined radio station group. Korn, as executive vice president of CBS Inc. and president of the CBS station group, will report to Lund.

CBS Entertainment chief Leslie Moonves will remain in his job and continue to report to Lund.

Jordan said in an interview that he believes an improvement in CBS’ prime-time ratings will most benefit the ailing network. “Our No. 1 priority is better ratings in programming,” Jordan said. “Network ratings drive the economics for local stations, and a small increase in ratings means a lot to the bottom line.”

Affiliates reacted to the news with qualified enthusiasm, heralding the choice of Lund to continue as head of CBS and Jordan’s focus on fixing ratings.

“When Jordan said he realized the importance of affiliates because he had been one of them--that was a first and a significant symbol of support,” said Ralph Gabbard, head of the CBS affiliates board and president of Gray Communications Systems Inc.’s broadcast group in Lexington, Ky. “The affiliates will get behind him in rebuilding this network.”

But Gabbard disagreed with Lund’s insistence on Tuesday that CBS’s distribution system was not part of the network’s ratings problem.

“All things being equal, we’re still a full rating point behind the other networks because of weak distribution,” Gabbard said. Last year, Fox raided CBS of a handful of key affiliates, forcing the network to join up with weaker UHF stations in markets such as Detroit, Atlanta and Cleveland.

At the news conference, Lund insisted that the network could be No. 1 in the ratings with its existing affiliates. “David Letterman and the ‘CBS Evening News’ undoubtedly have been hurt by weaker distribution, but our primary problem is in [prime-time] programming,” Lund said.

Gabbard said the network would have trouble improving prime-time ratings if it remained third place in news in markets like Los Angeles and New York.

Moonves acknowledged that CBS’ “go younger” strategy this season--with the hyped “Central Park West” as the centerpiece--had failed. “We tried to get too young too fast,” Moonves said.

Moonves--who was hired from Warner Bros. earlier this year--said that CBS will refocus on shows that fit its more traditional profile and 40-something demographics. Two CBS executives--Jonathan Rodgers, head of the CBS station group, and Nancy Widmann, president of the CBS radio division--are losing their jobs in the reorganization. Eric Ober, the president of CBS News, has been widely expected to leave. But Lund said that he will be meeting with Ober and other CBS executives to discuss their roles, with any other changes in management expected “over the next 60 days.”

Jordan said that he expects to announce asset sales by Westinghouse “in the next couple of months” that will raise “a lot” of money for running CBS.

Nicholas Heyman, who follows Westinghouse for NatWest Securities, said that Westinghouse may announce at an analysts meeting on Dec. 8 its intention to sell off nuclear power, energy and the transportation refrigerant business, which Heyman said would generate nearly $4 billion.

Jordan dampened speculation that CBS will take in a movie-studio partner to help it run the company.

“We’re looking at lots of options,” Jordan said, “but I don’t see us getting tied up 100%.”

Although he emphasized Westinghouse’s commitment to investing in CBS, Jordan did not rule out layoffs. “We will be looking for redundancies” in functions, Jordan said. Westinghouse and CBS already are combining some ad-sales staff, and Lund said he expected other “back-office” financial functions to be combined.

In addition to cost-savings, Lund and Korn said that they hoped the combined stations would not only improve the network’s distribution system but also lead to other possible programming ventures, such as their new daytime show, “Day and Date.”

Lund said, “I don’t expect further layoffs” at CBS News. But Korn clearly was eager to find ways to “amortize” CBS News talent. “It would be great promotion if, say, in addition to CBS News, Dan Rather did brief spots that could be syndicated,” Korn said.

One result of the merger is that Southern California’s two longtime all-news radio rivals, KFWB-AM (980) and KNX-AM (1070), are now jointly owned. But a spokesman for Westinghouse said Tuesday that “no changes in format are anticipated” for either station.

Regarding the recent controversy over CBS’ handling of a “60 Minutes” report on tobacco, Jordan said that he agreed with the network’s decision not to run the piece. “That was a legal problem, not a First Amendment problem,” Jordan said, adding that under Westinghouse, “we’re prepared on the right issues to fight it all the way.”

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Times staff writer Judith Michaelson contributed to this report.