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Media Companies Are Ready to Sell. Does Anyone Want to Buy?

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kfbkfb said:
I guess it's time for some oblique comment by NBCUniversal that the NBC TV network isn't a necessarily needed asset going forward.
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Why, given that the same comment made by Disney about ABC produced disappointing results?

Peacock and Paramount+ are nowhere near the same level in the streaming world that Hulu is. Hulu's such a success that Iger's envisioning the world after broadcast (which will come).

Shari's move, after wrestling control away from her dad, is to cash in. Not just CBS----ALL of Paramount.

But NBC's got some fairly strong linear assets beyond NBC. There's MSNBC, CNBC, and seven NBC regional sports networks, as well as Telemundo. Put that together with the parent being a cable company (Comcast) and I think NBC's the last one to go.

kfbkfb said:
The TV networks are just a brand and offer one way (with a high fixed cost and specialized equipment) to distribute TV shows, movies, sports and news on a nationwide basis,, maybe they're all headed the way of the DuMont TV network (being gradually shut down).
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DuMont had three owned and operated stations, and other than that, was just what you say---a distributor, which made them expendable.

Disney/ABC, NBCUniversal and Paramount/CBS are way more than that.
 
To me the whole discussion is very similar to the one we often have about radio. The traditional live & local, linear model that radio has been using for 100 years is obsolete. It was obsolete 30 years ago. Having live & local staff sitting in expensive studios surrounded by computers and other technology is wasteful and expensive. This is why ALL of the TV companies have sold off their radio divisions. Unfortunately they were sold to radio-only companies that didn't have the deep pockets necessary to fund the linear programming that form the heritage of those stations. The bad news is they held on too long.

Sheri Redstone is no idiot. She sees the same thing Iger sees. Holding on to aging linear assets are not prudent. The ad-supported model doesn't bring in enough to pay for operations. They want to get out of that 24/7 business just like everyone else. This is why RSNs are going bankrupt. It's all part of one big story.
 
TheBigA said:
To me the whole discussion is very similar to the one we often have about radio. The traditional live & local, linear model that radio has been using for 100 years is obsolete. It was obsolete 30 years ago. Having live & local staff sitting in expensive studios surrounded by computers and other technology is wasteful and expensive. This is why ALL of the TV companies have sold off their radio divisions. Unfortunately they were sold to radio-only companies that didn't have the deep pockets necessary to fund the linear programming that form the heritage of those stations. The bad news is they held on too long.

Sheri Redstone is no idiot. She sees the same thing Iger sees. Holding on to aging linear assets are not prudent. The ad-supported model doesn't bring in enough to pay for operations. They want to get out of that 24/7 business just like everyone else. This is why RSNs are going bankrupt. It's all part of one big story.
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Absolutely---but again---Shari's not looking to offload CBS and keep Paramount. She's reportedly negotiating to sell the whole package.
 
michael hagerty said:
Exactly---but that brings us back to the original topic of this thread---who's buying? What are the odds of a legitimate attractive offer for CBS when one didn't surface for ABC?
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Nobody who has any money. So linear TV ends up with the same kinds of companies that bought the network radio divisions. With likely the exact same results. People are blaming Cumulus or Audacy, but it's really the whole damned model.
 
TheBigA said:
Nobody who has any money. So linear TV ends up with the same kinds of companies that bought the network radio divisions. With likely the exact same results. People are blaming Cumulus or Audacy, but it's really the whole damned model.
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And that raises the question---does CBS screw up the Paramount deal? If I'm a buyer for the movie studio and (maybe) the streaming business (such as it is with Paramount+), I'm thinking why buy it in the first place? Years ago when there were buyers and you could spin it for a good price, sure...but now?
 
kfbkfb said:
...maybe they're all headed the way of the DuMont TV network (being gradually shut down).
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DuMont closed because the FCC allocations did not give a 4th VHF channel in nearly all markets.
 
michael hagerty said:
Big piece from The Hollywood Reporter on Shari Redstone’s discussion of selling Paramount:
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The article brings up the idea of WarnerMedia buying CBS. The problem there is that WMD is billions in debt from their previous acquisition. So before they do anything, they would have to sell something.

In any case, the O&Os are the equivalent of what AM radio was 20 years ago. They'll likely get sold to investment companies who'll look to find ways to cut costs, especially for 24/7 operations such as news departments.
 
TheBigA said:
In any case, the O&Os are the equivalent of what AM radio was 20 years ago. They'll likely get sold to investment companies who'll look to find ways to cut costs, especially for 24/7 operations such as news departments.
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Unless the news department is a station's profit center. In some markets, this is the main source of revenue.
 
DavidEduardo said:
Unless the news department is a station's profit center. In some markets, this is the main source of revenue.
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In the current configuration, the stations make more from content they create than from content they buy or license. But that could change depending on who buys the stations. If new ownership takes a more centralized approach, everything could change. So far, Apollo has left Cox TV stations alone. Same with Sinclair and Nexstar. But they could choose a more centralized approach to save money.
 
TheBigA said:
The article brings up the idea of WarnerMedia buying CBS. The problem there is that WMD is billions in debt from their previous acquisition. So before they do anything, they would have to sell something.
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I thought that was interesting, too---but CBS could go pretty cheap, especially if it's without the O&Os.

The story says Paramount's market cap is $10B. So what's CBS' fraction of that?

Apart from 60 Minutes, it has a weak news division (CBS Evening News has been in third place for decades, and CBS Morning is a perennial also-ran), is virtually nowhere when it comes to streaming (Paramount+ is a dud), and a primetime lineup that draws the oldest audience in television.

Colbert wins late night most nights (Kimmel second, Fallon third) but that's not the money machine it was even ten years ago. I don't know enough about the health of CBS Sports to have an opinion.

This could be something that WBD doesn't have to hock the Crown Jewels to buy---maybe a fairly minor divestment of another underperforming asset or two.

And WBD could be good for CBS---bundle it into Max instead of Paramount+, giving it a base for a move to a pure streaming play in the next few years.

Spin the O&Os to investment companies, and CBS to WBD in advance and what's left of Paramount is probably pretty attractive to buyers.

TheBigA said:
In any case, the O&Os are the equivalent of what AM radio was 20 years ago. They'll likely get sold to investment companies who'll look to find ways to cut costs, especially for 24/7 operations such as news departments.
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Agree.
 
DavidEduardo said:
Unless the news department is a station's profit center. In some markets, this is the main source of revenue.
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Even in the majors, most O&O newsrooms are pretty slimmed down.

A lot of morning shows (4-7 a.m., before the network mornings) run on carryover pieces from the 11 p.m. newscast and overnight crime video shot by stringers that are paid only for the video the station chooses to buy from them).

I had a conversation with an employee of an O&O news operation yesterday---the cost-cutting is down to the point now where producers of newscasts are editing video for their shows in addition to their other duties and small-ish expenses like courtroom artists (for trials where cameras aren't allowed) have been dumped from the budget.

When these stations go to the investment guys, there won't be a lot left. They'll find places to cut, but it won't be low-hanging fruit.
 
michael hagerty said:
And WBD could be good for CBS---bundle it into Max instead of Paramount+, giving it a base for a move to a pure streaming play in the next few years.
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But why would they want to buy something that you say is pretty weak? How does that benefit WMD? It just adds more debt and more expense. This is what has happened to radio companies. How did buying CBS Radio benefit Entercom? Think of CBS in that way. The parts aren't more valuable than the whole. When Sumner split CBS and Viacom in two, CBS ended up being the more valuable stock, because the cable companies declined and CBS had the movie studio. So you take the content creation part away from CBS, and it has to buy its content from others. Disney has that exact problem. The word synergy is often used, and these companies were created to maximize those synergies. When you split them apart, those synergies disappear. That's why CBS Radio has ruined Entercom. Every time Warner Brothers is reconfigured, either with Time magazine or AOL or Turner/CNN or Discovery, it gets weaker, not stronger. There's a reason for that.
 
TheBigA said:
But why would they want to buy something that you say is pretty weak? How does that benefit WMD? It just adds more debt and more expense.
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Apparently WBD is interested. I'm sure they have their reasons.

Off the top of my head, If they don't own the O&Os, it's a lower-cost operation, but they'll still get advertiser and affiliate revenue.

And there are things WBD has that could make CBS a lot better. The news division partners with CNN. Warner Bros. could create younger-skewing content for primetime than Paramount has----and again, they have one of the streaming platforms (Max) that will probably survive the coming shakeout, which Paramount+ won't.

TheBigA said:
This is what has happened to radio companies. How did buying CBS Radio benefit Entercom? Think of CBS in that way. The parts aren't more valuable than the whole. When Sumner split CBS and Viacom in two, CBS ended up being the more valuable stock, because the cable companies declined and CBS had the movie studio. So you take the content creation part away from CBS, and it has to buy its content from others.
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Right, but WBD is a content creation company. It's a stronger content creation company than Paramount by a long shot.
 
michael hagerty said:
Off the top of my head, If they don't own the O&Os, it's a lower-cost operation, but they'll still get advertiser and affiliate revenue.
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If they don't own the O&Os, then they don't own the means of distribution. It's much easier to get your programs (and your commercials) aired in a major market when you own the station. When you don't, that gives the station the option to drop your shows and make their own. That way they don't have to share the money. That's what happened this year with the CW. CBS is no longer part owner of the CW, so they pulled their O&Os from the network. They said "we'd rather be indie than carry a network we don't own." That's what will happen to CBS if it sells its O&Os.

michael hagerty said:
And there are things WBD has that could make CBS a lot better. The news division partners with CNN. Warner Bros. could create younger-skewing content for primetime than Paramount has----and again, they have one of the streaming platforms (Max) that will probably survive the coming shakeout, which Paramount+ won't.
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That's how Malone sees it. Right now. WBD has $53 Billion in debt. The market cap is $30 billion. That's not good. Especially if you're going to add more debt to buy CBS.
 
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TheBigA said:
If they don't own the O&Os, then they don't own the means of distribution. It's much easier to get your programs (and your commercials) aired in a major market when you own the station. When you don't, that gives the station the option to drop your shows and make their own. That way they don't have to share the money. That's what happened this year with the CW. CBS is no longer part owner of the CW, so they pulled their O&Os from the network. They said "we'd rather be indie than carry a network we don't own." That's what will happen to CBS if it sells its O&Os.
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All true. But the stations are declining assets and the networks have long been looking at a move to streaming and cutting the O&Os (and eventually the affiliates) loose.

TheBigA said:
That's how Malone sees it. Right now. WBD has $53 Billion in debt. The market cap is $30 billion. That's not good. Especially if you're going to add more debt to buy CBS.
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And again, I agree with you, but they are interested and they may sell something to make it work.

Seriously, if Paramount's market cap is $10B with CBS, CBS can't be more than a quarter of that with the station group. Spin those off and CBS might be lunch money.
 
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