Out with the bad and in with the green — cash that is.
After announcing earlier this year it wanted to unload its sub par performing Paramount theme parks, CBS Corp. said it found a buyer — Cedar Fair L.P. — on Monday for $1.24 billion in cash.
The sale gives the media conglomerate added ammunition to its treasury, which stands at $1.2 billion in cash. Along with its stock, the broadcaster has enough firepower to pursue deals in growing markets. Industry experts and pundits such as Jim Cramer of TheStreet.com suggest the New York media company should follow its competitors such as News Corp., which purchased Intermix Inc. (owner of MySpace.com), video news Web site IGN Entertainment Inc. and Scout Media, and invest in the Internet.
CBS has already proven it can make money online with its success of attracting decent advertising dollars at its CBSportsline.com and NCAAsports.com during the NCAA men's basketball tournament in March. The media company has attempted to beef up its online presence by converting CBSnews.com to a 24-hour news operation. CBS also owns other attractive online properties UPN.com and CBS.com, which all operate under the umbrella of the newly formed CBS Digital Media Division headed by former MarketWatch.com founder Larry Kramer.
Even though CBS unloaded its business news Web site MarketWatch.com to Dow Jones in 2005, it could look to acquire a smaller player in the business news sector to increase its business coverage. CBS could look to 10-year-old
online news service
CNET Networks Inc. After all, ahead of Viacom's announced spinoff of CBS last year, the combined company was reportedly in talks to acquire CNET long before News Corp. pulled the trigger on the MySpace deal. CNET's diverse network of Web sites include technology news sites News.com and ZDnet, technology review site CNET.com, video game news site Gamestop.com and recently added TV news site TV.com. CNET's current market cap of $1.47 billion and struggling stock price makes it an ideal target for CBS to expand into the new media business.
Another option for CBS is to heed Cramer's advise and follow News Corp.'s lead. Should it go down the same path, CBS could buy MySpace's main rival FaceBook Inc., which recently raised $25 million in venture capital, or even ailing Friendster Inc., which reportedly is on the auction block. Either asset would help bolster such franchises as cable sports network CSTV and nascent broadcast network The CW, CBS's and Time Warner's joint venture that will replace UPN in September.
Of course, Internet acquisitions may not be Les Moonves primary interest. Now that CBS is independent of a major media conglomerate lacking a large cache of cable channels or a movie studio, perhaps CBS will use its new cash to expand what it knows best: TV. One possible target on CBS's short list of TV interests could be Spanish language broadcaster Univision Communications Inc., which is on the block. However, at the $11 billion asking price, the extra cash from the Paramount Parks sale won't go far. — Gerald Magpily
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