CBS, once called "the Tiffany of Broadcasting," has been tarnished in recent months. A year ago, the network began sliding into second place and it may be headed toward third in the ratings this year. Profits are down and hundreds of broadcasting jobs have been cut in recent months.
The myriad of problems at CBS didn't sit well with Laurence A. Tisch, the New York investor and self-made billionaire who recently bought nearly 25% of CBS stock. And two weeks ago, the festering turmoil in the top ranks of CBS became a widely reported public sore. Chairman Thomas H. Wyman was ousted, reportedly because of his rift with Tisch and because he sought a potential buyer for CBS without approval from the board of directors.
In the wake of Wyman's removal, Tisch has joined company founder and broadcast pioneer William S. Paley at the helm of CBS. Company directors have formed a committee to search for Wyman's successor. The winning candidate faces the challenge of boosting morale, cutting costs and attracting new talent to CBS.
The Times invited a variety of observers in or near the broadcasting industry to provide some insights into the beleaguered network--and to offer some advice.
I think that CBS has a good group of operations at this time. I would not dispose of anything significant. The primary emphasis should be to pay down debt and increase vitality by reducing such pressures on management. (CBS' total debt stood at $790 million on June 30.)
I would not exclude the possibility of making appropriate acquisitions--for example, a fifth television station. CBS owns four, compared to NBC's five and Capital Cities/ABC's eight. CBS should be careful about cutting its staff. One hopes that the cuts would be in areas that are truly unnecessary to the future of operations. (The network has cut about 700 broadcasting jobs this year.)
Rising television programming costs are one of CBS' principal expense problems. CBS might consider producing more news-based programming with its own staff. Typically, it costs less to produce a news program than to purchase a show produced by outsiders.
I think that the outlook for network advertising will be slow for years to come. It's going to be a long haul, and investors should recognize that the maximum value comes from making the property they have invested in increasingly successful over the long term.
William S. Paley and Laurence A. Tisch's combined interests apparently preclude the threat of a takeover and provide the opportunity for management to focus on the future.
CBS' new top executive should preferably have broad experience in media operations. I think that CBS has competent executives just below the top levels for the position of president. I wonder why they don't promote from within? Outsiders come in and have to learn the game before they can successfully manage a media operation such as CBS.