CBS would do well to consider buying Sony Pictures Entertainment for the right price, says one business analyst.
Brian Wieser, senior research analyst of the Pivotal Research Group, says the Sony unit "offers a very strong fit for CBS." Wieser believes the value of an acquisition could be "around $10 billion in enterprise value."
CBS -- which looks to be flush with extra cash from a proposed deal to restructure its outdoor media business -- would help in the transaction. Wieser believes more cash from the speculation about a possible sale of CBS' Simon & Schuster book publishing business could also contribute.
Some key benefits for the Sony business, says Wieser, would include shifting CBS' media emphasis: It would be a major owner of a big theatrical studio business. He says CBS management would help the studio with "financial discipline and strategic choices."
In addition, CBS would gain exposure to television markets in rapidly growing countries around the world -- all this from Sony's existing slate of international cable networks. Weiser said this would also help expand distribution for Showtime.
Sony's current and library content of theatrical and television content would benefit CBS, gaining incremental revenues with online video distributors, as well as giving the company better financial leverage overall in license deals.
CBS' already big syndication division, CBS Television Distribution, combined with Sony's syndication TV division -- which has "Dr Oz" and "Seinfeld," among other shows -- would yield an even stronger business unit. There is already a connection between the two business divisions: "Jeopardy" and "Wheel of Fortune" are distributed by CBS -- shows produced by Sony.
While there might be some hesitation from the stock market, Wieser says long-term CBS stock would see gains: "The market would eventually realize that substantial value lies within Sony's international cable networks and domestic television activities which could be particularly valuable to CBS."