[opendtv] Re: News: Fox Says Mandated PSAs Would Be Illegal
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 14 Nov 2007 09:06:45 -0500
At 6:33 PM -0800 11/13/07, John Willkie wrote:
I am corrected. While I couldn't find a reference to "Showtime" in the
latest CBS 10-K filing with the SEC, nor information on the same site as to
whom owns Showtime Networks, the Showtime Networks web site says that it is
a CBS company.
However, I think that CBS's valuation went up after the spin-off, and
Viacom's went down, at least over the first few years.
Must have been the loss of Showtime, no? :-)
Showtime did indeed go to CBS in the split. Here are some excerpts
from a Hollywood Reporter story about the split:
Viacom split signals end of an era
Wed Jun 15, 2005 03:47 AM ET
By Georg Szalai
NEW YORK (Hollywood Reporter) - Entertainment giant Viacom Inc. made
things official Tuesday, saying its board has unanimously approved a
split of the company into two separately traded entities to be known
as Viacom Inc. and CBS Corp.
The split, proposed a few months ago by Viacom chairman and CEO
Sumner Redstone, is expected to be completed in first-quarter 2006.
Redstone will serve as chairman and controlling shareholder of both
entities.
As expected, Redstone's daughter Shari Redstone -- whose profile has
grown over the years -- on Tuesday was named nonexecutive vice
chairman of the current Viacom.
The new companies Viacom and CBS will be led by current Viacom
co-presidents and co-chief operating officers Tom Freston and Leslie
Moonves, respectively. While Viacom's statement Tuesday didn't
specify their titles, Freston and Moonves are expected to be named
CEOs of their respective entities shortly after formal board
approval, sources said.
...
"The age of the conglomerate is over," Sumner Redstone said, adding
that other sector giants might also consider splits to unlock value.
"I am glad that after a lot of hard work, the Viacom board came to
the conclusion that this (split) is the best move for Viacom."
The entertainment giant Tuesday also said how the split will be effected.
A tax-free spinoff will create the Freston firm, which will retain
the Viacom Inc.ame. As expected, this entity will include MTV
Networks, BET, Paramount Pictures, Paramount Home Entertainment and
music publisher Famous Music.
The CBS company will include the CBS and UPN networks, the Viacom TV
station group, the Infinity Broadcasting radio unit, Viacom Outdoor,
the CBS, Paramount and King World TV production operations as well as
Showtime, book publisher Simon & Schuster and Paramount Parks.
...
Industry observers have said that the split divides the company
nearly along the same lines that existed before the Viacom-CBS
merger. However, in a staff memo Tuesday, Redstone called the split
"a natural extension of the path we laid out in creating Viacom." He
added: "We are retaining the significant advantages we captured in
the Paramount and CBS mergers and at the same time recognizing the
need to adapt to a changing competitive environment."
...
"The new Viacom will focus on organic expansion through the creation
of cutting-edge content, unrivaled brands, specialized and highly
desirable demographics and the continuing expansion of delivery
platforms," he said. This will attract a higher stock-trading
multiple that can be used for targeted acquisitions in such growth
areas as video gaming, online and wireless, he added. "Additionally,
we believe that the new Viacom's significant cash-flow generation
will provide the opportunity for significant share repurchases," he
said.
The new CBS, meanwhile, will be a strong generator of free cash flow.
"This company will also have the financial capability to return
significant capital to stockholders through dividend payments and
stock repurchases," Redstone said.
In addition, CBS Corporation was given Paramount Parks, which they
sold to amusement park operator Cedar Fair, L.P. on June 30, 2006.
END QUOTE
And here is a blurb from Wikipedia:
In March 2005, Viacom announced plans of looking into splitting the
company into two publicly traded companies. The company was not only
dealing with a stagnating stock price, but also the rivalry between
Les Moonves and Tom Freston, longtime heads of CBS and MTV Networks
respectively. After the departure of Mel Karmazin in 2004, Redstone,
who served as Chairman and Chief Executive Officer, decided to split
the offices of President and Chief Operating Officer between Moonves
and Freston. Redstone was set to retire in the near future, and a
split would be a creative solution to the matter of replacing him.
The split was approved by Viacom's board June 14, 2005, took effect
December 31, 2005, and effectively undid the Viacom/CBS merger of
1999. The existing Viacom was renamed CBS Corporation and was headed
by Moonves. It now includes Viacom's "slow growth businesses", namely
CBS, The CW (formerly UPN), CBS Radio, Simon & Schuster, CBS Outdoor
(formerly Viacom Outdoor), Showtime, and most television production
assets. These, according to some analysts, were suffocating the
growth of the MTV Networks cable businesses. The split effectively
made CBS an independent company again.
END QUOTE
So how have the individual companies fared since December 31, 2005?
Current stock Price January 3 2006 High Low
CBS $27.89 $24.94 $32.74 $22.95
VIACOM $40.79 $41.59 $44.92 $33.10
So it looks like CBS got the better of the deal. The stock was doing
well going into the fall season, but has tumbled recently, most
likely because of the writers strike.
Regards
Craig
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