CBS Expands in Gaming & eSports - Analyst Blog


CBS Corporation ( CBS ) is always eager to add diverse revenue streams to hedge against economic cycles. One such move is the company's expansion into the fastest growing live gaming and eSports market.

The company through one of its divisions, CBS Interactive, has entered into a partnership with TwitchTV, a leading video game broadcasting network and Major League Gaming ( MLG ), the world's most renowned eSports league.

CBS remains well positioned to boost revenues in the coming quarters through its strategic initiatives and operating efficiencies. Management remains optimistic and expects growth momentum to continue in fiscal 2012 based on strong political advertising, reverse compensation from affiliates, strong demand of its content and streaming and retransmission consent.

Moreover, CBS is likely to benefit from an increase in political ad spending as it owns more TV stations than its competitors News Corporation 's ( NWSA ) Fox and Comcast Corporation 's ( CMCSA ) NBC.

The company expects strong political TV advertising revenues in the current fiscal year, which in turn, is anticipated to enhance its profitability. According to the company's Chief Executive Officer Les Moonves, profits are expected to rise by $180 million primarily due to political ads, which surpassed the profits of the presidential election last year.

We believe that CBS Corporation's long-term agreements with the NFL, the NCAA, the SEC and the Grammys will generate stream of positive cash flows for the company in the long run. 

Currently, we have a long-term Outperform rating on the stock. Moreover, CBS Corp. holds a Zacks # 1 Rank, which translates into a short-term Strong Buy rating.

CBS CORP ( CBS ): Free Stock Analysis Report
COMCAST CORP A ( CMCSA ): Free Stock Analysis Report

NEWS CORP INC-A ( NWSA ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CBS , CMCSA , MLG , NWSA

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