CEO Les Moonves says the company will seek “strategic alternatives” for the unit during investor address
CBS said Tuesday it would explore strategic alternatives for its CBS Radio business, which is corporate speak for considering a possible sale of the unit.
While speaking at an Investor Day presentation to analysts and shareholders in New York, CEO Les Moonves said the company would begin to official explore a variety of options for the group including a sale, swap or spinoff. He promised to be prudent and judicious in the endeavor that would “unlock value” for shareholders.
The Investor Day was the first of its kind in five years for CBS, and the first chance for Moonves to lay out his long-term strategy for the company since becoming its chairman. Last month, 92-year-old media mogul Sumner Redstone stepped down, putting Moonves firmly in charge of CBS, which owns of its namesake broadcast network as well as premium cable channel Showtime and radio holdings.
CBS Radio is one of the largest operators of radio stations in the country, with 117 radio stations serving 26 markets. The company doesn’t break out its performance separate from its local TV operations, but the combined local broadcasting arm represented about 19 percent of the company’s total revenue last year.
Moonves took advantage of the investor event to try to separate CBS from market worries that have plagued television companies since this summer. In August, a Disney disclosure that its powerhouse ESPN lost subscribers spurred a mass exodus from television stocks because of worries that online viewing and “skinny bundle” Web TV options were cannibalizing the companies’ traditional business.
“One message we want to get across: Don’t paint all media companies with the same brush. We’re different, and it’s in that difference where our success will lie,” he said.
He stressed that consumer demand for “skinny bundle” packages worked in CBS’ favor, since the company was essential to any bundle and the economics of those packages pay the company better.
He also highlighted that CBS has locked up its licenses to NFL, SEC, NCAA Championship and PGA Tour programming, all profitable deals. “We won’t be chasing after any overpriced sports rights in the future,” he said.
Critics have pointed to Disney’s fervor in pursuit of costly live-sports programming deals as a factor in the ESPN’s perceived weakness.
CBS shares were down 1.4 percent at 52.55 in recent trading. In the last year, the stock has declined about 15 percent.