Fitch: CBS' 'BBB' IDR & Stable Outlook Unaffected by CNET Acquisition

Business Wire,  May 15, 2008  

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NEW YORK -- Today's announcement by CBS Corporation (CBS) to acquire CNET Networks, Inc. (CNET) for approximately $1.8 billion does not affect its current ratings or Stable Outlook, according to Fitch Ratings.

Fitch currently rates CBS as follows with a Stable Outlook:

--Long-term IDR 'BBB';

--Senior unsecured 'BBB';

--Short-term IDR 'F2'.

As stated in its March 31 press release, Fitch believes CBS has sufficient capacity to become acquisitive, assuming reasonable multiples and synergies within the businesses acquired and proforma unadjusted gross leverage in the 3.0 times (x) range. Fitch expects the CNET acquisition to be funded with cash on hand which we estimate at approximately $2.5 billion proforma for CBS' recent sale of its stake in the Sundance Channel. CNET generated approximately $80 million in EBITDA in 2007 and Fitch expects some cost synergies to be realized in the corporate and ad sales functions, as well as some modest opportunities for revenue upside by leveraging CBS' existing base of national advertisers. As such, Fitch expects CBS' un-adjusted gross leverage ratio to be below 2.2x pro forma for this acquisition.

CBS' liquidity remains adequate and supported by proforma cash balances that Fitch estimates to be in excess of $500 million and revolver availability of $2.8 billion. Fitch expects CBS to generate in excess of $750 million of annual free cash flow (after dividends) on an on-going basis.

CBS' ratings continue to be supported by the company's solid credit protection measures and capital structure and strong position in traditional media advertising outlets. The rating is limited by CBS' above-average exposure to the cyclical advertising markets and an overall risk of competing technologies within the radio and television broadcasting segment.

For more information, please see Fitch's April 25 full credit report on CBS, which is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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