For CBS, More News is Good News

Wieser sees bright retrans future for network 6/11/2012 12:01:00 AM Eastern

Analyst Brian Wieser sees a bright retrans future
for CBS, based on his prediction that FCC policies
will remain pro-broadcaster for the foreseeable
future. That could, however, depend on CBS and
other groups remaining pro-local news.

Wieser’s Pivotal Research Group initiated
coverage on CBS last week with a “buy” rating—a
prediction the stock will return at least 15% per
year, based in part on the forecast that its retrans
revenues will eventually be $1 billion a year.

The FCC still has an open retransmissionconsent
docket, in response to cable and satellite
complaints that the thumb is on the scale for
broadcasters, given the must-carry retrans
regime. But the commission, including the current
one under Julius Genachowski, has not taken up
calls to intervene through forced carriage during
retrans impasses or mandatory arbitration.

Wieser says, given the value of local news,
“we believe that policymakers would not allow
local broadcasters to suffer the same fate
newspapers are facing.” But he also has advice
for broadcasters in general: “Networks and
their affiliates must ensure that they are seen
... to be continually investing and re-investing in
their news programming.”