CBS Emmy Award Losses Not Insured
The decision by CBS television to cancel the Emmy Awards Show in Los Angeles for a second time on Oct. 7 cost the network millions in ad revenues, and the production wasnt covered by cancellation insurance, a network representative said.
“There was no cancellation coverage,” according to Gene Mellevold, vice president, risk management for Viacom. “Losses were absorbed by Viacom, which owns CBS. Obviously for CBS theres a tremendous loss of revenue.”
The 53rd Annual Primetime Emmys, originally scheduled for Sept. 16, were cancelled in the aftermath of the Sept. 11 terrorist attacks.
They were rescheduled for Oct. 7, but again cancelled because the U.S. attack on the Taliban in Afghanistan began that day.
Although he could not reveal the specific magnitude of the loss, Mr. Mellevold labeled it “pretty sizeable.”
He explained that “a typical evening on CBS could be upwards of $50 million in ad revenue that didnt get on, as well as the basic costs of putting on the show.”
Mr. Mellevold said that Viacom elected not to buy coverage for the Emmys.
“First of all, thats contingency coverage,” he said. “Thats coverage that you specifically go out and purchase on an as-needed basis. Philosophically, CBS has never looked at buying that type of coverage.”
He continued that the network has “coverage in our property and portfolio programs where if theres a civil authority that shuts us down, or if permits are pulled by the mayor–actions where were prohibited or denied access–were covered.”
However, he added, “this clearly was not the case. This was simply a decision that with what was going on in the world, this was not an appropriate time to have this event.”
Mr. Mellevold added that “its a testimony to people like Leslie Moonves, [president and CEO] at CBS, who cancelled the program knowing that there wasnt any insurance to protect that loss. Because of the perception of the world as it is today, I think he did the moral thing.”
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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