CBS and Viacom, Then and Now
September 28 2016 - 9:05PM
Dow Jones News
When CBS and Viacom split in 2006, Viacom looked like it might
be the better long-term bet for investors, because it was loaded
with growing cable networks. It didn't turn out that way.
CBS's market capitalization has grown since then to $24.5
billion from about $20 billion; Viacom's has shrunk to $15 billion
from about $27 billion as its stock price declined it it bought
back shares aggressively.
Leslie Moonves has been at the helm of CBS for that duration,
while Philippe Dauman was Viacom's CEO from the fall of 2006 up
until agreeing to depart in August.
The reasons for the two companies' divergent results: CBS had
success building a new stream of subscription revenue from pay-TV
providers, known as "retranmission consent," and built a prime-time
lineup that routinely won the broadcast ratings race. Viacom,
meanwhile, grew especially vulnerable to the migration of young TV
viewers to streaming video, and the audience at many of its
networks eroded.
These days, CBS shares trade at a premium price-to-earnings
multiple compared with Viacom, which has the lowest trading
multiple of the major media conglomerates.
--Keach Hagey
(END) Dow Jones Newswires
September 28, 2016 20:50 ET (00:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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