• by Wayne Friedman , November 3, 2005

Although Viacom is splitting up into two pieces--primarily dividing the company among its cable and broadcast assets--apparently it doesn't have to stay that way.

Reports are that the new CBS entity is eyeing College Sports Television, a mid-size cable network, for half a billion dollars. A CBS spokesman wouldn't comment about the possible deal.

According to financial documents filed concerning the Viacom breakup, the new CBS entity could buy other cable properties, and in theory, compete--at least partially--with its soon-to-be departed Viacom family of cable networks.

Financial filings say CBS will consider acquiring cable networks as long as they don't compete with existing Viacom cable networks. That would mean no music channels (MTV, VH1, or CMT) or kids' networks (Nickelodeon) or young male-skewing networks (Spike TV).

However, it could mean CBS buying sports or even general interest entertainment cable networks.

Ever since the deal was announced some months back, Wall Street analysts have wondered if CBS is getting the short end of the deal in the split up--considering that CBS has been viewed as the slower-growth media play--with a broadcast network, TV station and radio stations, and outdoor media assets.

Now more than ever, CBS will be more dependent on its older traditional media revenue building capabilities--advertising revenues. To analysts, it makes sense that CBS would want to grab a cable network that gets a dual revenue stream, consisting of affiliate fees and advertising sales.

Separately, Les Moonves, chairman of CBS Corp., said the network's advertising business has been improving recently. Fourth-quarter scatter market sales have seen program pricing up by mid-single digit percentage increases from the upfront pricing set last summer. Media agency executives say the broadcast networks, including CBS, only sold around the low 70 percent level in the upfront. That means good news now. High demand and good inventory supply can reap major advertising revenue gains for the next several months for CBS.