04:53pm EDT 18-May-00 Goldman Sachs (NEWYORK) VIAB.EB ACTION VIA VIA.N
Goldman, Sachs & Co. Investment Research
Viacom - CBS Upfront Should Drive Strong Ad Sales ; RL
====================== NOTE 4:32 PM May 18, 2000 ======================
4. Viacom Inc. (VIA__B) $59.88
Viacom - CBS Upfront Should Drive Strong Ad Sales ; RL
EPS (FY Dec): 2000E US$, 2001E US$ - Recommended List
* The CBS upfront meeting was the best-attended in years, highlighting
significant advertising demand. The fall schedule includes just 7 new
programs, providing stability but also the potential for a new hit or
two. Network television is the healthiest it has been in years, with
the large networks in aggregate showing the first increase in audience
in 6 years, and that will likely be psychologically important for
upfront advertising demand. We continue to recommend the purchase of
VIAB shares, with a price target of $73.
* Although this upfront meeting was an opportunity for the CBS network to
showcase and sell it's fall lineup to advertisers (with UPN slated to do
the same today), CBS Television CEO Les Moonves began the presentation
highlighting the wide array of Viacom assets, noting that it was the
company's goal of making an advertising buy with the company far more
effective for those in the audience - advertisers. Mr. Moonves went on
to discuss ways the combined company's assets could work together,
including using MTV and VH-1 to promote CBS's music specials, and to
launch Nick Jr-branded children's programming on CBS on Saturday
mornings. Although this upfront focused on just selling advertising for
the CBS network, there may be opportunities in the future to offer a
wider array of advertising solutions through this selling process, which
could drive even stronger revenue growth than we are already currently
forecasting.
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