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Technology Stocks : VIAB (Viacom Class B shares) formerly CBS -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (2421)	8/27/1998 4:44:00 PM
From: MGV	Respond to of 4613

Surprising CBS IPO Spotlights Radio As Mkt Sees TV Struggle By Brian Steinberg NEW YORK (Dow Jones)--Beset by a raft of rumored difficulties at its attention-getting television network, CBS Corp. (CBS) surprised the market Thursday with news that it would offer up to 20% of its radio and outdoor advertising group for sale in an initial public offering. The move comes amid speculation that the large broadcaster is considering several options for improving profitability at its so-called Tiffany Network, the home of "60 Minutes" and comedian Ray Romano. According to speculation, CBS is mulling layoffs at the TV network and selling its midtown Manhattan broadcast center and may desire a sale of the TV network or the enlistment of an operating partner. CBS spokesman Dana McClintock would only say the company is "trying to operate smarter" and is "looking for operating efficiencies all the time." But the company's IPO move serves to distract investor attention from TV and focus it instead on a better-performing asset, said Jessica Reif Cohen, who follows media and broadcasting for Merrill Lynch & Co. In a research note released Wednesday morning, Cohen suggested that CBS equity is "overly linked to its highly visible TV network." Other experts agreed. "There really isn't that much benefit to managing radio stations alongside an integrated TV network," said Michael Wolf, who heads the media and entertainment practice for consultants Booz-Allen & Hamilton. "They are fundamentally different businesses." And yet the news could play a part in the cutback rumors. "If they are planning on jettisoning parts of the network, this would be the precursor for it,' said Brian Stone, the chief operating officer of Broadcast Architecture, Inc., a research and broadcast consulting unit owned by Chancellor Media Corp. (AMFM). Through the IPO, CBS could "isolate the radio operations from whatever is going on on the other side." Nonetheless, Wall Street appears to view the move as a positive one. CBS shares inched up 2.3%, or 5/8, to 27 13/16 in early trading on NYSE-listed volume of 3.5 million. Average volume is 2.6 million. "This should unlock the value of the largest and fastest-growing division," analyst Cohen said in a brief interview. "It gives them a lot of flexibility." Indeed, CBS Chairman and Chief Executive Michael H. Jordan said in a statement that the offering should create a company with "significant borrowing capacity" for radio and outdoor acquisitions. "Dow Jones News Service" "Copyright(c) 1998, Dow Jones & Company, Inc."