CBS Corporation (US)

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CBS Corporation is the parent company of the CBS TV network and various other assets spun out of media giant Viacom in 2006, undoing a mammoth merger engineered seven years earlier. In addition to CBS and its collection of regional stations, it includes cable channel Showtime, a half share in micro-network The CW, and the book publisher Simon & Schuster. The group's once-extensive outdoor network was carved up and sold off in 2013 and 2014. The 2006 separation from Viacom couldn't have come at a better time for CBS. Although the network's past performance had traditionally lagged well behind Viacom's cable networks, the new group was far more concentrated, positioned as an old-style US media group with a strong presence in broadcast, radio and outdoor media. Expectations that it would prove the less exciting of the two businesses were overturned when it demonstrated an unexpected return to form, overtaking traditional champion NBC. That optimism was partly soured during 2008 and 2009 as the group's reliance on advertising revenues was severely tested by the recession, but CBS has retained its position at the country's most watched network. A reunion with Viacom was briefly explored in 2016 but abandoned. The following year, the group acquired Australian broadcast network Ten.

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Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. The Adbrands Company Profile of CBS Corporation summarises the company's history and current operations and also contains the following website links:

CBS Corporation website

Brands

CBS Television Showtime
The CW CNET
CBS News CBS Outdoor
Simon & Schuster InnerTube

Parent

National Amusements

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 18th Apr 2018: With the traditional US broadcast season entering its final weeks, NBC is set to take top slot for the year with around 9.5m average primetime viewers. Key factors have been its coverage of both the Winter Olympics and the 2018 Super Bowl. CBS is currently in second place with 9.0m total average viewers, followed by ABC at 6.0m and Fox trailing on 5.2m. NBC also leads in the prized 18-49 demographic, with CBS second, and ABC and Fox tied for third.

Adbrands Weekly Update 12th Apr 2018: Viacom responded to CBS's low-ball merger bid with a counter-proposal. Raise the offer from $11.9bn to around $14.7bn, and name Viacom CEO Bob Bakish as president & COO beneath CEO Leslie Moonves, not CBS's Joseph Ianiello. Negotiations continue.

Adbrands Weekly Update 5th Apr 2018: CBS made a lowball offer to acquire sister group Viacom. The bid was undisclosed but is understood to be below Viacom's current value. It was also conditional upon CBS CEO Les Moonves and COO Joe Ianniello being named to lead the re-merged entity. Viacom declined the offer. Both groups are 80% controlled by National Amusements, the cinema group which is now effectively controlled by Shari Redstone, the daughter of ailing mogul Sumner Redstone. She has been encouraging the two groups to recombine. However, the nature of CBS's offer appears to have taken her by surprise; she has been pushing for Viacom CEO Bob Bakish to take the #2 position over Ianniello in a merged company. CBS and Viacom were split in 2006 in the belief that separation would allow cable-oriented Viacom to flourish without the drag effect from broadcast network CBS. Instead the opposite has been true: CBS has soared while Viacom has floundered.

Adbrands Weekly Update 18th Jan 2018: Shari Redstone, the de facto controlling shareholder in both Viacom and CBS Corporation, is once again pushing for the two media groups to merge to counter increasing consolidation within the industry and the threat from streaming services. The companies have been connected, off and on, for decades. Viacom was originally formed in 1971, when regulators ruled that the then-mighty CBS broadcast empire could not also own cable channels. The business was acquired by movie theatre owner Sumner Redstone in 1988, and a decade later he reunited Viacom with a reduced CBS. However, as the group's stock value began to slip in the mid-2000s he saw an advantage in dividing them once again in the belief that they would do better as separate entities. To many people's surprise, CBS performed significantly better than Viacom. Already vice chairman to her ailing nonagenarian father, Shari Redstone has inherited the controlling position in both companies, but her biggest hurdle is to persuade CBS CEO Leslie Moonves to take back the much-weakened cable division and its equally challenged Paramount movie business.

Adbrands Weekly Update 23rd November 2017: The outpouring of sexual harassment allegations appears to have claimed two new scalps in the media industry. Veteran reporter and business commentator Charlie Rose was sacked by his two main employers CBS and PBS following an expose in the Washington Post in which several women alleged unwanted sexual advances. Rose said there were some inaccuracies in the allegations but admitted culpability and apologised for his inappropriate behaviour. Separately, Disney/Pixar's top animation executive John Lasseter took a six month leave of absence, citing unspecified "missteps" and apologising for any of his actions that may have made co-workers feel "disrespected or uncomfortable". Lasseter is known for hugging people. For a business profile in 2011, a Wall Street Journal reporter spent a day with Lasseter and observed him give out no fewer than 48 separate hugs to different co-workers. In his email to employees Lasseter said "I especially want to apologise to anyone who has ever been on the receiving end of an unwanted hug or any other gesture they felt crossed the line in any way, shape, or form." 

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Background

Free for all users | see full profile for current activities: CBS was founded in 1928 when 27-year-old William Paley, the son of a successful cigar wholesaler, sold shares in his father's company and used the proceeds to acquire United Independent Broadcasters, a struggling group of 16 radio stations scattered across the country. Along with a number of other radio stations, UIB had signed up to receive broadcasts from Columbia Broadcasting Systems, a sales network established by the Columbia Phonograph Company to promote sales of its 78rpm audio discs. Columbia's plan had failed to take off financially, so Paley bought out the sales network and adopted the CBS name for his chain of radio stations. (Ten years later he acquired Columbia Phonograph as well). He then set about rapidly expanding coverage of the company's broadcasts, signing up another 30 stations across the nation to join the network. In less than four months, Paley had tripled the number of listeners, becoming the country's biggest broadcast network. By 1935, the network had doubled again to almost 100 stations. It was also the first network to establish its own full-time newsgathering service, run by Edward Murrow, quickly earning a reputation as one of the finest news organizations in the world.

CBS had also begun to experiment with television, launching the first scheduled US broadcast service in New York in 1931. The company floated in 1937, and after World War II pushed aggressively into the rapidly expanding TV market. In 1948, CBS launched its first national network, broadcasting to a group of 30 affiliates across the US. By raiding rival networks for their most popular radio and television stars, CBS established a line-up of hugely successful shows during the 1950s. Long-running series such as The Ed Sullivan Show, I Love Lucy, The Beverly Hillbillies, Mission: Impossible and The Mary Tyler Moore Show, as well as primetime news presented by legendary anchorman Walter Cronkite, established CBS as the #1 television network in the US almost without a break for more than two decades from 1955 to 1976. 

The group also diversified into other areas. CBS was already involved in the music industry, having acquired the Columbia Phonograph Company in 1938. In 1948, the company's research department developed a new process for manufacturing longer-playing records which played at a slower speed than old 78s. These 'LPs' were the CDs of their time, revolutionizing the industry and establishing CBS as the world's biggest record company by the end of the 1960s. Also during that decade, CBS had begun experimenting with another new idea, cable networks which could deliver more specialized programming to regional communities. However this quickly came under the scrutiny of regulators, who ruled that companies could not own cable broadcasters as well as regional stations. As a result, CBS was forced to spin off its own cable operations in 1971 into a new entity, which it named Viacom. 

Meanwhile the company continued to enjoy major success through the 1980s, especially with comedy series M*A*S*H and the enormously popular primetime soap opera Dallas. To this day, the final episode of M*A*S*H in 1982 and the 'Who Shot JR' episode of Dallas in 1980 hold the record as the most watched primetime broadcasts in modern television history, watched by more than 60% and 53% of all US households respectively. But by the end of that decade performance had begun to falter. William Paley had retired from day-to-day management of the company in 1987, and died three years later. His successor, Larry Tisch, sold off CBS Records (to Sony) as well as its publishing arm to focus on television, but saw the company's market position eroded over the following decade as a result of fierce competition, especially from Rupert Murdoch's Fox Network. In 1995, CBS was acquired by former household appliance company Westinghouse, which then sold off its own non-broadcast interests, and acquired radio group Infinity Broadcasting. Westinghouse renamed itself CBS Corporation in 1997, but the group continued to struggle for share against the deeper pockets of rival networks. 

Meanwhile, Viacom had gone on to develop a loose network of its own, buying up local TV and radio stations in areas where it didn't own cable, and also taking over CBS's programme syndication business. Among numerous other deals engineered by its new owner Sumner Redstone were the acquisition of both Paramount and Blockbuster Video. In 1996, Viacom combined its TV stations in a joint venture with fellow local operator Chris-Craft to form United Paramount Network, effectively a fifth US TV network. By now, the changing nature of the US industry had encouraged regulators to relax rules over station ownership. As a result, in 1999, CBS boss Mel Karmazin approached Viacom with a proposed reunification of the CBS empire. The deal was completed in mid 2000.

A slight shadow was cast over the deal by News Corporation's acquisition of Viacom's UPN partner Chris-Craft in 2000. The latter had attempted to sue Viacom over the CBS deal, alleging a breach of the UPN partnership agreement. When this suit failed, Chris-Craft sold out to Viacom's arch-rival Fox. Initially it appeared likely that UPN would be wound down as the two rivals consolidated their respective stations into the Fox and CBS networks. Instead the rivals agreed a deal to allow the network to maintain its separate existence for the time being.

Mel Karmazin became president and COO of Viacom after the CBS merger, but his relationship with Sumner Redstone was marked by simmering tension for the following four years. It was not helped by a series of controversial missteps. In 2003 the company was forced to sideline a fictionalised mini-series on the life of Ronald and Nancy Reagan after viewers and commentators lambasted its unflattering and one-sided portrayal of the former President. In early 2004 CBS aired the NFL Super Bowl, including half-time entertainment produced by sister company MTV, featuring singers Janet Jackson and Justin Timberlake. Without informing either CBS or MTV, they had devised a dance routine which culminated in the uncovering of one of Janet Jackson's breasts in front of more than 90m television viewers. The performers initially claimed the incident was simply an unplanned "wardrobe malfunction", but later confessed it had been intentional. The stunt caused a sensation, airing as part of what is considered to be the epitome of family entertainment. The country's broadcasting regulator, the FCC, received more than 500,000 complaints, and CBS and MTV were severely reprimanded both by the FCC and the NFL. CBS was later issued with a $550,000 fine for violating FCC indecency rules, then the biggest penalty ever imposed on a television broadcaster. (That fine was overturned four years later by a US appeals court.)

Only a few months later another Viacom unit, Nickelodeon, was fined an even higher $1m for exceeding adverting time limits within children's programming, and the group was repeatedly reprimanded for the on-air comments of Infinity radio "shock jock" Howard Stern. Eventually Viacom agreed a settlement with the FCC, paying $3.5m in respect of complaints over Stern (who left Infinity during 2004) and other radio and television programs. In yet another blunder during the year, veteran CBS News anchor Dan Rather delivered a story questioning President George W Bush's military record in the National Guard, based on what turned out to be unsubstantiated and possibly forged documents. The network was forced to apologize, and four senior news employees were later fired. It was an inglorious end to Rather's distinguished career, and he subsequently issued a $70m lawsuit against CBS for damaging his reputation. Yet another fine, totalling $3.5m, was handed down in 2006 to more than 100 network affiliates for airing an episode of drama series Without A Trace in 2004 which depicted a teen orgy.

Mel Kamarzin finally resigned as CEO of CBS in June 2004. Meanwhile, despite strong growth in several of its units, Viacom's stock price continued to languish between 2002 and 2004. When the spin-off of Blockbuster failed to fix this problem, Sumner Redstone began developing an even bigger restructuring designed to kickstart an improvement by splitting more traditional businesses such as broadcast TV and radio from high-margin, fast-growth cable. The separation of CBS and Viacom was first announced in summer 2005, and following approval from the board, was completed in January 2006. see full profile for current activities


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