VIAB (Viacom Class B shares) formerly CBS Message Board

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Technology Stocks : VIAB (Viacom Class B shares) formerly CBS

VIA 36.49

+1.1%

Nov 25 3:59 PM EST

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To: Brewmeister who wrote (2649)	9/30/1998 1:27:00 AM
From: MGV	Read Replies (2) of 4613

The argument against CBS is the network business. The less bullish analysts are arguing that football and GM will reduce earnings for the remainder of FY 98. The Karmazin streamlining cuts, they say, won't really kick in until FY 99. Finally they say that the Infinity IPO is ill-timed. Its not an IPO market. They point to the cancelled Goldman Sachs IPO as proof. What is unclear is the statement by the MSDW analyst indicating that he talked to management before cutting $100 Million in revenue over the next two quarters. Yet management has said that they are hitting their football targets and seeing no fall off in ad revenue. It doesnt add up. I would like to hear one of the 12 strong buy analysts reiterate with the opposing position. Growing Cash flow, undervalued businesses making the sum of the parts greater than the whole, active cost reduction management at the network, and casting the network as a competitive advantage in cross-selling synergies and an effective loss leader that will be an effective break-even leader by next FY. Add that to Karmazin's alignment of incentives with CBS shareholders and his track record in th emedia business, and at 23 1/4 this company is a steal, even in this market environment. One more thing: I don't buy for a second the arguments by the CBS bears that "maybe Karmazin knows the radio business but is over his head in the television business." The truth is: Its the media business and making a large distinction between tv and radio is over-analyzing the businesses. You develop entertaining content, you reduce production costs, you sell like crazy the on-air time with good sales incentives, and you are #1 in the local markets. Football is great content. It is a hyge programming boost. Its not surprising that analysts are saying the record sum paid is too much. How many times have you heard that criticism of a visionary business leader: They paid too much. I 've heard about as many time sas the manager went out and proved them wrong. The strategy is coherent and it is the right one.

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