A classic gem
William Paley was only 26 when he bought control of the year-old Columbia Broadcasting System radio network in 1928. Paley went on to build CBS into a top-flight network - fueled by such luminaries as George Burns, Jack Benny, and the legendary newscaster Edward R. Murrow - quality programming and stars that earned CBS the nickname "Tiffany Network."
In 1938, CBS purchased American Recording, which it promptly renamed CBS Records. The ratings leader from the mid-50s to late 60s, CBS lost its way in the early 70s when Paley left without designating a successor. In 1985, Ted Turner attempted to take over the company, but CBS slithered out of Turner's grasp by allowing the Laurence Tisch-led conglomerate Loews Corp. to buy a quarter of its stock. Tisch became CEO of CBS in 1987, and quickly sold the company's book and magazine operations, as well as CBS Records (to Sony) by 1988.
Tisch soon came under fire for his unwillingness to jump into the burgeoning field of cable, and for losing rights to air NFL games in 1994 - perhaps the greatest misfortune ever to bedevil the august broadcaster. In 1995, institutional investors gave the embattled Tisch a vote of no confidence. As a result, Tisch sold CBS to Pittsburgh-based Westinghouse Electric, an industrial giant, for $5.4 billion. Westinghouse subsequently decided to strip itself of its industrial operations, and become solely a New York-based media company. In 1997, Westinghouse bought Infinity Broadcasting (the radio network that hosts popular shock jocks Howard Stern and Don Imus) for $4.9 billion. In December 1997, Westinghouse symbolically completed its transition to a media company by renaming itself CBS Corp.
Radio, television, and chemical weapons destruction
The business of CBS Corp. breaks down into four primary units: radio, television stations, television network, and cable group. The radio unit is the corporation's most profitable. It includes Infinity Broadcasting Corp., which operates 165 radio station in 35 markets, and CBS's outdoor advertising operations. On the boob-tube end of the spectrum, the CBS network provides news and entertainment content for 200 affiliates in the U.S. Beyond affiliates, CBS Corp.'s television stations unit owns and operates 14 stations that carry CBS content for 7 of the 10 largest TV markets, and reach 32% of America's TV watching households.
Non-broadcast television is covered by the CBS cable group, which includes The Nashville Network (the eighth largest cable network, and home of NASCAR), Country Music Television, and a satellite television service among others. Finally, CBS Corp. is in the process of divesting itself of the fading vestiges of the once mighty industrial divisions of the former Westinghouse Corp, including a government operations unit that stores nuclear materials and destroys chemical weapons for the United States Department of Energy.
Slap in the face
With its number one finish in the ratings at the end of the 1998/1999 prime-time Nielsens season, the CBS Network made a dramatic turnaround since its dog-days of the mid-nineties. In 1995, the network, sensing the perils of an aging viewership, embarked on an ill-conceived strategy to attract younger viewers (and, by consequence, the advertisers that demand audiences in the 18-35 range.) CBS quickly realized, however, that its youth-oriented strategy had failed, and fled back to its more reliable old-timers.
CBS was blunt about its about-face, using the slogan "Welcome Home" to tell its core audience that it had learned its lesson. The so-called "geezer strategy" worked, to a certain extent. CBS's ratings improved, fueled by such hits such as the saccharine "Touched By An Angel," which has pulled in celestial ratings, but the network's revenues had a fair struggle.
Surfing the new media wave
As the cable example demonstrates, life on the frontier of media is not about staying isolated, but rather about cross-pollination, conglomeratization, and consolidation. CBS has lagged behind competitors such as NBC, whose heavily trafficked MSNBC.com was developed in collaboration with The Microsoft Corporation.
Nevertheless, CBS has been quick to learn from its mistakes in the Internet and in cable. Notably, the company has launched CBS Plus, a cross-media advertising and sales division. The unit offers one-stop package deals that offer advertisers access to the CBS network, CBS televisions stations, CBS/Infinity Radio, TDI, and CBS New Media. The latter division, CBS New Media, includes CBS's highly-regarded cbs.marketwatch.com, and cbs.sportsline.com. A senior vice president at CBS Plus told Daily Variety in December 1998 that the unit's first client, Taylor Made Golf, showed up "11 minutes" after the formation of CBS Plus. Without CBS Plus, this Senior VP said, "they would have had to talk to 15 different sales people."
Karmazin means (mean) business
Although Wall Street loves him, Mel Karmazin, CBS Corp.'s CEO as of January 1999, has won his share of enemies. Karmazin, who engineered the success of Infinity Broadcasting Co., is a no-nonsense, bottom-line type who vows to whip CBS into shape. Already, Karmazin has wiped out salaries for the new stations's sales staff, making their pay totally dependent on commissions. "If they want security," Karmazin reportedly said, "they can go to work for the post office." In fact, some of "them" may just have ended up at the post office, as Karmazin hacked away 300 jobs in 1998. In addition, Karmazin has cut benefits for CBS's part-time workers, and eliminated some retirement benefits for its full-time staff. He has taken a rather hard-line with CBS' furious union - he doesn't talk to them. "I know I'm the cutter," Karmazin told The Chicago Tribune, adding: "but I'm also the guy who overpays for talent, and I'm also the guy who overpays for programming."
Meanwhile, back at Karmazin's old playground, it's shopping time. CBS spun off Infinity Broadcasting Corp. in December 1998. The following May, Infinity agreed to purchase billboard company Outdoor Systems Inc. for 6.5 billion in stock. The company also agreed to assume $1.8 billion of Outdoor Systems's debt. The purchase makes Infinity, already the nation's second-largest radio broadcaster (based on revenues), the nation's top outdoor advertising company. The deal reduced CBS's stake in Infinity from 82% to 63%.
Following the trends
Like many other media companies, CBS has been snapping up a variety of Internet properties, broadening not only their appeal to viewers, but their power within the industry. The company has large stakes in Marketwatch.com and Sportsline.com - which it plans to eventually combine into a spinoff company closely associated with the CBS name. In June 1999, the company purchased a 30% stake in ThirdAge Media, a Website for older adults. The following month it purchased 35 percent of the top Internet site directed towards doctors, Medscape Inc., in return for $150 million of promotion and advertising. Together, they created cbs.medscape.com. In addition to two seats on the ThirdAge board, and the option to purchase more equity, CBS has gained a wealth of content which it intends to promote through existing properties.
Consolidation of power
April 1999 brought giant "Oprah Winfrey," "Jeopardy," and "Wheel of Fortune" distributer, King World Prods., to CBS through a $2.5 billion stock-swap. Later on, about a month after the FCC loosened regulations concerning television station ownership, Viacom merged with CBS in September 1999. The largest media merger to date, the deal was in part made possible after the August 1999 law change allowing companies to own more than one station in the same city. Talks began shortly after the ruling and culminated in the $34.8 billion transaction. The all stock agreement creates a media empire second in size only to Time Warner.
The new company, which will retain the Viacom name, will vertically integrate several major cable stations, the number one broadcast network, the largest outdoor advertising company, one of the largest movie studios, one of the largest radio companies and, a major video rental chain. Viacom's CEO, Sumner Redstone remains at the helm of the organization and CBS CEO, Mel Karmazin, is now president and chief operating officer. Karmazin is the heir apparent to Redstone but there is some question as to how the two headstrong executives will get along.
CBS does not accept faxed or e-mailed resumes and does not respond to job inquiries over the telephone. Applicants should mail their resumes to the Human Resources Department at the company's headquarters. Some jobs require specific industry experience. CBS assigns most new hires to its New York or Los Angeles headquarters. Applicants interested in working for a specific affiliate should apply there. However, the best bet to get an interview in the television industry is through connections. Says an insider, "Never be afraid to network. If you know someone who knows someone who can get you an interview, use it. It is old fashioned, but networking works. It is television, schmooze or lose." Another way to get hired is by serving first as an intern.
Expect three rounds of interviews before a job offer is tendered. "They are easy. Always let the interviewer do most of the talking. Be prepared to ask questions," a source reports. "You should know as much as possible about the company and the person or project they are working on. Make sure you know who is who at the company, like Dan Rather is CBS, Tom Brokaw is NBC. I know it sounds silly but I have encountered so many people that do not know and end up looking like idiots."
Friendly, but some Karmazin-induced angst
In the cutthroat and ultra-competitive business of television, CBS is described as a rewarding place to work. "Friendliness, accessibility of management, promotion within the company and the manner in which people are treated (very well) and paid (very well) are all part of the CBS culture," a high-level contact says. However, sources report, that the atmosphere has taken a turn for the worse since its acquisition by Westinghouse in 1995. Says a source: "Westinghouse is known for being cheap, the joke of the industry, but did most with the least. So this change has been tough on the CBS people with many cutbacks. The fear is that all of the new CBS becomes too lean and mean." Also, employees's anxiety of future layoffs is "palpable throughout the office." Employees also cavil about Westinghouse cutting benefits. "I am beginning to agree with Dave Letterman," says one insider.
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