In Focus

Is the Super Bowl Network a Super Buy?

The Minnesota Chicks are still smarting from the Vikings' utter defeat to the New York Giants. Chick Lorene has been kicking up her heels ever since the Baltimore Ravens got their invite to the big party. As for me, I'm a 49er fan, so I guess I'm in it another year just for the commercials. Whatever the reason, one thing is for sure, this Sunday, millions of people, worldwide, will be tuning into CBS to watch Super Bowl XXXV. Hmmm. CBS. that third network with the rap of only being able to cater to geriatric audiences? UGH, don't get me started about advertisers only wanting to cater to 18-49 year olds! My dad will buy anything if its promoted right! Actually, Chickies, I'll show you that Murder She Wrote and Diagnoses Murder isn't all that's going on with this broadcasting company.

We hear a lot about "must see TV" NBC, subsidiary of Chick holding, GE, and about the combined synergies of Disney, parent company of ABC and ESPN, but what about CBS? It seems they have been the quiet storm, gaining ground in daytime, primetime, and special events. As a former ABC daytime actress, I am shocked to learn that the CBS drama Young and the Restless has not only maintained their lead of the daytime pack, but they've held that lead for 627 consecutive weeks -- that's 11 straight years! (I knew those soap fans were loyal but WOW!) My kids' choice on Saturday mornings is Nick Jr. on CBS. Apparently, they're not alone, as it has ranked #1 among children 2-5 for 14 consecutive weeks. CBS' Everybody Loves Raymond entered the new year as TV's highest rated and most watched comedy, beating Friends, Frasier and Will & Grace!

On February 21st CBS will be hosting the Grammy Awards. (Still can't get over this Eminem guy having nominations and the fact that Jennifer Lopez won't be attending. I wanted to see her top her last year's outfit. which wouldn't be tough, a few strategic band-aids and she'd be better covered!) And following the big game on Super Bowl Sunday, CBS will be kicking off their next installment of the astonishingly successful Survivor series. In fact, they've already inked deals to air the 3rd and 4th installment of Survivor, and why not? It's been rumored that the network banked 14 million dollars on the finale of the first series alone! That final show attracted 51.7 million viewers, rivaled only by last year's Super Bowl audience.

Now I hope I didn't get you too excited about this company, so that you trotted off to find its ticker. If so, you may have had some difficulty. Like its competitors, this network is owned by a much bigger conglomerate. I think you'll be amazed at all of its holdings. The parent company is Viacom (NYSE:VIA). In addition to CBS, a partial listing of its subsidiaries includes MTV, Nickelodeon, VH1, Paramount Pictures, Infinity Broadcasting, UPN Network, TNN, Showtime, Blockbuster (world's leading renter of videos, garnering more than 3 million customers per day!), and publishing house, Simon & Schuster. Can you even? Viacom considers itself the number one platform in the world for advertisers. It has positions in all types of media and in every demographic category. Despite living in Los Angeles, I had no idea how consolidated Hollywood had become!

After a few years of running numbers and Chick research, here's something I've found to be true. When you see the word "conglomerate" listed as a company's industry (eg. Viacom is a "media conglomerate"), beware. You'll definitely add diversity to your portfolio, but expect some complexity. (Ask Chick Jeanette about the ease of running numbers on GE, another conglomerate.) I think the reason for the complication is somewhat simple. Imagine the difficulty of trying to consolidate financial statements from such a vast array of subsidiaries. It's also interesting to note that the only other place I was able to find their numbers other than Viacom's own web site, was at www.CBSMarketwatch.com. After finally locating all the appropriate numbers and completing our 7th grade math calculations, Viacom comes out like this:

GM: 12.7% (ugh)

NM: .5% (oof)

Cash vs. Long Term Debt: .08% (ouch)

Flow Ratio: .92

Obviously, this company is still feeling the effect of its rapid expansion. You can see how low its cash reserves have become. I do believe, however, these acquisitions have been necessary to keep pace with the industry. Viacom is now the 3rd leading media entity, following Disney and AOL Time Warner. In fact, rumors have been swirling lately about the possibility of a Viacom/Yahoo merger. The nosedive of Yahoo's stock (a Chick holding), coupled with the formidable competition created by the AOL Time Warner deal (another Chick holding), make it a tempting proposition for Viacom. Many Yahoo watchers doubt it will ever happen, as Yahoo has always expressed its long-term desire to maintain its independence to better provide a broader range of content. I, however, say "never say never!" Viacom's interest certainly illustrates their desire to stay in the game and compete on the grand scale. Chairman and CEO, Sumner Redstone seems to have a rich history of aggressiveness and media savvy. Despite its numbers, I think this is a stock the Chicks will be watching in 2001.

Oh. and by the way, remember CBS is also the channel to watch this week and if, like me, you're only "in it for the commercials," make sure you get a good seat for their Saturday night pre-Super Bowl special, "The Greatest Super Bowl Commercials Ever Made." Now that's something this Chick will definitely be watching!