CBS Television Network, a wing of
) entertainment segment, recently announced that it has extended
its affiliation agreement with
Nexstar Broadcasting Group Inc
) by an additional 6 years for eight stations which the latter owns
Due to its exposure in publishing, radio and television
broadcasting, and outdoor billboard businesses, CBS remains highly
susceptible to the advertising market. Thus, the deal is in sync
with the company's strategy of adding diverse revenue streams to
season itself against economic cycles.
CBS remains well positioned to drive revenue growth 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 reverse compensation
from affiliates, strong demand for its content and streaming,
retransmission consent and political advertising. Management
expects reverse compensation to surpass $100 million in 2013.
The retransmission and affiliate fees generated from CBS's cable
and satellite partners for retransmitting broadcast programming
have been another source of revenue. This is also evident from the
company's long-term programming deal with the cable operator,
), whereby the latter will retransmit the signals of CBS television
network, the Showtime Networks and CBS College Sports, across its
array of platforms, to meet consumers' growing demand for TV,
Video on Demand and online content.
Earlier, in a similar move, CBS Corporation had announced the
renewal of the content carriage agreement with
Cablevision Systems Corporation
), a leading media and telecommunications company.
Moreover, CBS secured deals worth hundreds of millions,
including a two-year deal with
). Additionally, it signed a nonexclusive licensing agreement with
Amazon. Com. Inc
). These measures back CBS's strategy of generating revenue from
shows that have already been broadcasted on TV years ago and
facilitating the company in capitalizing on its content.
Further, CBS Corporation's long-term agreements with the NFL,
the NCAA, the SEC and the Grammy's will generate a steady stream of
positive cash flow for the company in the long run.
Currently, we have a long-term Outperform rating on the stock.
Moreover, CBS Corp. holds a Zacks #2 Rank, which translates into a
short-term Buy rating.
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