CBS to Explore Sale or Spinoff of Radio Business
Chief executive Leslie Moonves made the announcement at the company's "investor day," which featured political jokes from Stephen Colbert and new revenue estimates for retransmission and reverse compensation plus digital services.
CBS is exploring strategic options for its radio business, a move Leslie Moonves likened to a procedure that ended with the media conglomerate spinning off its outdoor advertising business, the CEO said Tuesday at the media conglomerate's "investor day" presentation in New York.
"For a while now, we've been reducing our footprint here," Moonves said of its radio business.
"Today, we are announcing here a bigger step in this regard," he said. "We will begin to officially explore strategic options for radio as a whole. Just as we did when we separated outdoor, the aim here is to unlock value for our shareholders. There are a number of options for doing this, and we'll be looking at all of them."
CBS owns 117 radio stations in 26 markets, but revenue in the fourth quarter dropped 5 percent at CBS Radio, and CBS took a $454 million charge during the quarter to reflect the declining "fair value" of the radio FCC licenses.
Moonves also said Tuesday that a new Star Trek heading for CBS All Access will "jumpstart" the digital service's foray into original programming, and subscribers can expect three or four original shows to debut there annually.
Moonves was introduced by CBS late-night host Stephen Colbert, who looked across the audience of Wall Street analysts and began with, "Ladies, gentlemen, and money," then noted he must be in the right place because he didn't see any Bernie Sanders supporters in the room.
"In politics, there is exciting and occasionally disturbing news from the campaign trail every single day," Moonves said.
Regardless, he sees "nothing but positive signs" not only for CBS, but for the U.S. economy in general, and he cited recent comments by Warren Buffett and other prominent investors to bolster his assertion.
Along those lines, CBS upped its revenue estimated for retransmission and reverse compensation to $2.5 billion annually within five years while it had previously predicted $2 billion. Executives also said over-the-top should generate $800 million annually in that timeframe, with $400 million from All Access and $400 million from Showtime's OTT service.
Moonves said CBS stock has risen 144 percent in five years compared with an average of 70 percent for its peers and 55 percent for the S&P 500, and its success has come in large part due to the fact that the company is a "more pure-play content machine" than are its rivals.
Also at the investor day, Showtime Networks CEO David Nevins gave attendees "the first public look" at an upcoming series from Jim Carrey called I'm Dying Up Here, about the stand-up comedy scene of the 1970s.
Nevins also showed a teaser trailer for the upcoming new version of Twin Peaks and showed scenes from its documentary show, The Circus, which is an inside look at the 2016 presidential campaigns of the candidates in both parties.
CBS Interactive general manager Marc DeBevoise accused some unnamed competitors of playing fast-and-loose with audience tallies.
"I think we can point to some key differences from competitors here; the first area is fraudulent traffic where many are artificially inflating their viewership numbers using fake or bought impressions," he said. "Unlike others, essentially all of our videos and ads are actually watched by humans."
He also boasted that CBS targets its online ads more efficiently, using an Internet photo of the Costa Concordia sinking in 2012, a maritime disaster that killed 32 people, accompanied by an ad for a discount cruise vacation to drive home his point.
"I'm really not sure 75 percent off is enough for me to take that trip," he quipped. "But you get my point: data-enhanced advertising is only as good as the content you put it on."
Moonves also said that CBS probably won't be getting digital rights to Thursday Night Football. "Obviously, there's a number of names we've heard out there, we're probably not one of them. It's one of the bigger companies up in silicon valley that looks like they'll take that," he said.