Author Topic: CBS - CBS Corporation  (Read 15361 times)

glorysk87

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Re: CBS - CBS Corporation
« Reply #40 on: October 11, 2017, 10:29:35 AM »
CBS shares getting back pretty close to my target to start buying again. If we get a little lower I will likely begin to acquire shares again. Nothing fundamental about the story has changed, though sentiment remains extremely negative in the entire space. Something to consider as well - sentiment on Nielsen's new total content and total audience measurement shifted has notably shifted in a positive direction in the last few months. I have a feeling the push to get a more comprehensive measurement system implemented as a new currency will gain steam over the next year, which will be a substantial positive for CBS and their ability to negotiate advertising rates.
« Last Edit: October 11, 2017, 10:31:09 AM by glorysk87 »


Leverage Capabilities

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Re: CBS - CBS Corporation
« Reply #41 on: October 17, 2017, 01:58:00 PM »
Any concerns over NFL numbers being down this year? I personally think it's just noise but saw that a CS analyst put out a note yesterday regarding this.

glorysk87

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Re: CBS - CBS Corporation
« Reply #42 on: October 18, 2017, 06:45:35 AM »
Not worried about viewership numbers. Only concern I have over NFL is if the tech guys like FB or AMZN start to really bid up prices hard when the contracts are up for renewal. Otherwise not too worried. NFL values reach above all else, so the broadcast guys remain in pretty good spot.

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Re: CBS - CBS Corporation
« Reply #43 on: October 18, 2017, 06:51:26 AM »
Agreed. I don't think the contracts are up for renewal until the 2023 season if i remember correctly. I honestly don't see a FB or AMZN fully supplanting the networks for coverage. Think it'll probably come in the form of a JV / partnership similar to what CBS / Amzn is doing for some of the Thursday night games.

KJP

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Re: CBS - CBS Corporation
« Reply #44 on: October 18, 2017, 07:29:26 AM »
glory,

Thanks for continuing to follow up on this.  I reread your valuation in reply #2 on this thread and had a few questions about it:

1) Are EBIT or EBITDA multiples the right way to value the business given that the company's cash costs of producing content appear to be significantly higher than the programming costs that appear on the income statement?  Specifically, CBS's capitalized programming assets increased by $500 million in 2015 and $800 million in 2016, causing FCF to be significantly lower than what an EBIT - Interest - Tax estimate would suggest.

2) Are you modeling $3 billion in incremental revenue, or instead $3 billion from the sources you mentioned that would be offset in whole or in part by revenue declines elsewhere? 

3) I know you mentioned you were being conservative, but why use 25% incremental EBITDA margin?  Are you anticipating a large step up in programming costs?
« Last Edit: October 18, 2017, 07:51:33 AM by KJP »

thefatbaboon

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Re: CBS - CBS Corporation
« Reply #45 on: October 22, 2017, 12:13:57 AM »
I'm used to the high comp in the media space but isn't Moonves' compensation a bit ridiculous??

$30m plus of payments of cash yearly. $30m of RSU yearly.  Total comp last three years: $57m, $57m, $70m. Between 2014 and 2016 the stock was essentially flat and shareholders didn't make anything.  His latest contract guarantees him similar till 2021

The guy gets paid more than Roberts or Iger who run companies nearly 10x the size of CBS. 

fareastwarriors

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Re: CBS - CBS Corporation
« Reply #46 on: January 23, 2018, 11:08:20 AM »
« Last Edit: February 01, 2018, 11:01:50 AM by fareastwarriors »

fareastwarriors

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Re: CBS - CBS Corporation
« Reply #47 on: February 01, 2018, 11:02:23 AM »

Okonomen

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Re: CBS - CBS Corporation
« Reply #48 on: March 07, 2018, 12:50:47 PM »
Really interesting case. However, I notice the following and hope to get feedback on this:

CBS looks cheap on EPS, but as content reinvestment is increasing more than content amortization, these businesses does not look as cheap on FCF. So maybe EPS is not the best metric to use?

Looking into CBS's cash flow statements it does look like they have trouble with the FCF conversion

fareastwarriors

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Re: CBS - CBS Corporation
« Reply #49 on: April 09, 2018, 10:49:30 AM »
Viacom asks CBS to raise its bid by $2.8 billion: Sources



•Viacom asked CBS to sweeten its merger bid by about $2.8 billion or almost a quarter more than CBS's offer, people familiar with the matter said.
•The move highlighted the wide gap in the U.S. media firms' price expectations.
•CBS is now considering its next steps in the deal negotiations, said the sources.


https://www.cnbc.com/2018/04/09/viacom-asks-cbs-to-raise-its-bid-by-2-point-8-billion-sources.html