CBS Corporation BCBS

Morningstar Rating

Stock Research and Analysis

by Michael Corty, CFA

CBS Corporation owns television, radio and outdoor advertising assets. We think the company lacks an economic moat, and will struggle to achieve long-term revenue growth.

The main operations within CBS's television division (about 70% of operating Read more

Bulls Say

The CBS television network has been the most-watched broadcast network for five of the last six years. The success and stability of the network is attractive to advertisers.

CBS owns or has rights to some valuable content, including the NCAA's March Madness and the NFL. These popular programs give CBS leverage in negotiations with pay television distributors for retransmission fees.

Comcast took a 51% stake in NBC Universal. The nation's largest pay television distributor paying up for a content company demonstrates that quality content is tough to build from scratch. Read more

Bears Say

Declining audience and the increased use of digital video recorders may result in a significant shift of advertising dollars away from broadcast television over time.

CBS is stuck with its radio business for the foreseeable future. Selling its stations will be extremely difficult given the abundance of parties hoping to sell radio stations.

Traditional media firms have made significant investments in online properties at high prices. CBS's purchase of CNET is a prime example of overpaying for growth opportunities.

Showtime no longer has the distribution of films from Viacom, MGM or Liongate. The network will develop more original programming and movies, a new venture for CBS. Subscriber losses are possible if there is a perceived reduction in quality content at Showtime. Read more

Strategy

Since its split from Viacom in 2006, CBS has reshaped its portfolio by selling its theme parks, selling some radio stations, and buying Internet properties like CNET. The company recently began operating Read more

Management

Chairman Sumner Redstone, 86, controls CBS through ownership of Class A shares--representing about 80% of the outstanding voting shares--held by his family-owned National Amusements. (The more-liquid Class B shares don't come with a vote.) By the same Read more

Profile

CBS's television assets include the CBS television network, 30 local TV stations, and 50% of CW, a joint venture between CBS and Time Warner TWX. The company also owns CBS Read more

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Static in the Comcast-NBC Universal Deal
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