• by Wayne Friedman , June 4, 2012

One Wall Street analyst sees CBS becoming less dependent on advertising sales in five years -- with TV advertising representing less than 50% of its revenues from all its TV businesses.

Brian Wieser, senior research analyst of the Pivotal Research Group, says CBS’ revenue from retrans fees -- as well as domestic, international and digital sales and cable networks -- will grow to $5.9 billion by 2017. That's more than all CBS’ TV advertising revenue, which is the majority of the company’s advertising revenue  -- other areas being outdoor and radio.

In five years, these non-advertising revenue businesses will exceed total TV advertising revenues, which Wieser estimates will be $5.6 billion --- $4.1 billion coming from CBS network TV ad sales and $1.5 billion from its local TV stations.

By way of comparison, CBS network TV ad sales in 2012 are estimated to be $3.7 billion, while local TV advertising revenues are projected to reach $1.3 billion, for a total of $5 million. 

Total non-advertising revenues currently stand at $3.1 billion (in 2011). Revenues from retrans fees will be $250 million for 2012.

Analysts have long worried over CBS’ exposure to sudden swings in the advertising market, where advertising revenues have represented up to 75% of the company’s overall revenues. That equation subjects the company to possible financial malaise, versus other big media companies that have more diversified media businesses.

“CBS is the media stock best positioned to capitalize on what we believe are perpetually favorable trends benefiting the network TV business and its ancillary activities,” writes Wieser.

Still, Wieser believes in future that CBS will reap rewards from its TV ad-related businesses: “Advertisers buy TV in general and broadcast networks in particular. Doing so is better and will remain better than all other alternatives for the foreseeable future.”