Perhaps TV stations should get not too excited about finally extracting retransmission consent fees from cable operators. They might have to hand it over to their networks.

CBS CEO Les Moonves raised the possibility of reverse compensation, for CBS affiliates at least, by declining to rule it out during a conference call with securities analysts this morning after the release of CBS's 2006 fourth quarter and full year earnings.

Asked about reverse compensation, Moonves said the network's relationship with its affiliates "continues to evolve."

"They like the idea of getting paid for retrans as do we," Moonves said. "It's an ongoing dialog in terms of the content that we supply them as well as our relationship with them."

Moonves also reminded the analysts of the network compensation CBS used to pay the affiliates. "When I first got here, we were paying out hundreds of millions of dollars, which is virtually down to zero right now."

The analysts did not ask Moonves to clarify or elaborate on his remarks. Reporters are not allowed to ask questions on the calls.

Moonves did not provide any details on the retrans deals CBS announced last week with nine MSO's covering more than one million households, but strongly implied that CBS had gotten the cash payments it was seeking.

"We are extremely pleased by the nine MSOs that have jumped on board," Moonves said. "More and more of these smaller operators and some of the not-so-small operators are coming around."

Moonves admonished CFO Fred Reynolds, also on the conference call, not to reveal "what we are getting per sub."

Moonves said that CBS's major retrans contracts with Comcast, Time Warner and others don't expire for a few years, but that they could be renewed earlier—with a cash element, of course.

"MSOs are already paying for [broadcast] networks," Moonves said. "You can disguise it under other things. If you are paying $3 for ESPN, you're really paying $2.50 for ESPN and 50 cents for ABC."

"We see more and more of the MSOs getting on board," he said. "Have you noticed that 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. So, the MSOs are realizing that it's better to get along than to fight. Yes, the big ones are up in '09 and '10, but you'll see us doing a number of deals before then."

Moonves and CFO Fred Reynolds said the company decided to sell nine small-market TV stations to Liberty Media and Cerberus Capital because they were not as profitable as the major market stations and were pulling down the corporate margins.

Moonves and Reynolds were also enticed by the prices—15 times after-tax cash flow. Even when you factor in potential retrans revenue, Moonves said, "the economics still make much, much better sense to do a sale."

According to Moonves, there is "little chance" that CBS would part with any of its major market stations in the light of the coming retrans windfall.