CBS Sports Network Aims At Big Money In Sports Programming Says Trefis Analyst
June 26, 2012 at 3:54 AM (PT)
Last week, ALL ACCESS first alerted you that CBS CORPORATION was launching a 24-hour, seven-day a week sports radio network to be named CBS SPORTS RADIO (NET NEWS 6/21). The network will be aired on several of its Sports format stations and in syndication through CUMULUS MEDIA NETWORKS, with 67 CUMULUS-owned stations adding the programming as well.
That news set well with TREFIS.COM, which notes that the launch of CBS SPORTS RADIO is a net positive, although it won't have a major impact on the company's stock. They write, "Certainly, given its expertise in the radio business, CBS wants to extend into lucrative sports programming market which has made ESPN a giant network. CBS has divested some of its radio assets in past few years to focus on certain key markets."
"We estimate that CBS RADIO & CBS’ local TV stations together constitute more than 20% of CBS’ estimated value," adds TREFIS. "About half of the revenues within this division can be attributed to CBS' radio business, which currently captures close to 8% share of the U.S. radio market. This implies that the radio business accounts for somewhere around 10% of CBS’ value. If this new expansion increases CBS' radio revenues by 20%, it could result in an upside of less than 5%. Even though an interesting move, the direct value add is not that significant."
While not a major financial coup, TREFIS does see the move as allowing CBS to "position its brand more strongly in sports market, which is a big business in the U.S. and attracting plenty of attention from media companies. Sports programming is where the big money is, as evident from ESPN’s success and CBS wants to become a stronger force in this space."