CBS Corporation shares were on fire today after the company announced the first step in selling off non-core assets (simple language: non-content related). CBS’ strategy seems to be downsizing the company to where it is simply focus on content only properties/franchises that can be branded across multiple platforms, similar to what Disney does – create a franchise and have it sold across film, television, digital and licensed out to other items (video games) – though probably on a different scale since CBS does not have the range of characters Disney does. As CNBC points out, their publishing business could be the next to go, considering books don’t have much in common with the television business and keeping costs streamlined across the organization.
Looking at their website, there’s certainly some other businesses that could probably go as well. CBS Scene is a restaurant in Foxborough, while I’m sure is profitable, it’s again completely unrelated to the content area. CBS Connections (something to do with advertising from the looks of it) and Watch Magazine also look like other candidates for the future. This will all play out at some point but CBS is really focusing on the content is king model that is sweeping the industry now.
The CBS stock has been in a volatile uptrend for the past year but check out what the recent news did to it – gigantic gap leading to an all time new high of near $41. This could be the future catalyst that leads CBS higher as long as low ratings or some other negative event does not sabotage them.