Analyst: 'Sell' News and CBS Shares

Pali's Greenfield says TV station business in free fall

Pali Research media analyst Richard Greenfield was characteristically blunt in his assessment of the broadcast industry in two separate notes on Thursday, slapping "sell" ratings on both CBS and News Corp. and painting a gloomy picture for the former's TV station group.

In a research note, Greenfield reduced his fourth-quarter estimates for CBS for the second time in a week, stating: "We believe TV station businesses are in complete free-fall; not just at CBS, but across the entire industry."

Greenfield estimated that TV station revenue could decline 35% to 40% in 2009, with profits down 65% to 70%. Earlier this month the company inked its first retransmission-consent deal with a major cable operator - Time Warner Cable - and other deals are expected to come.

Greenfield, who maintained his $5 price target on the stock, said that it is inevitable that CBS eliminate its quarterly dividend. The company has steadfastly maintained in the past that it will pay its dividend in the fourth quarter - it already has paid for the first three quarters of the year.

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