CBS loses $12.5 billion in third quarter after $14 billion TV, radio station write downs
31 Oct 2008
Broadcast network CBS Corp. has reported a $12.5 billion third-quarter loss after write downs in the value of its radio and television stations amounting to around $14.1 billion. Across its divisions, CBS has seen ad sales fall even at its local TV and radio stations. The broadcaster wrote down businesses and investments because it anticipates that the ongoing financial crisis will cause marketers to further cut ad spending.
Leaving aside the write down and other items, CBS made 43 cents a share, in line with preliminary figures which it had provided on 10 October. CBS' net loss of $18.58 per share compares with a profit of $343.3 million, or 49 cents a year ago during the same period, according to a statement by the broadcaster. Reports quoted analysts as saying that the core problem for CBS was sagging ad revenue trends that have affected television and radio and have started to affect CBS Outdoor.'
Sumner Murray Redstone is the majority owner and chairman of the board of the National Amusements theatre chain, which is the majority owner of CBS Corporation, Viacom, and Midway Games, MTV Networks, BET, Paramount Pictures and DreamWorks movie studios. He is also an equal partner in MovieTickets.com. Reports said that Redstone sold $233 million of the media companies' shares on the day of the CBS announcement in order to meet debt obligations to the tune of $1.6 billion. He is reported to have sold 17 million CBS shares for $7.10 each.
Reports also said that the media mogul has said he has "no intention of selling a single share of Viacom Inc. (VIA) and CBS Corp." Redstone termed the sale of shares as ''clearly atypical'' according to media reports, saying that the sale was on account of ''extraordinary circumstances''.
Earlier in October, CBS had said that the declining advertising market would mean a shortfall in its profit that it had reported for the year-before quarter, and had caused the company to lower its full-year outlook. It had also told its investors that it would be taking the $14.1 billion write down reflecting a write-down of goodwill and other assets which have lost value on account of the economic turmoil.
