Stock Plan Won’t Work, Experts Say : Publicity Motive Seen in Helms Bid to Control CBS

Sen. Jesse Helms’ call for a “national crusade” to buy stock in CBS Inc. and bring conservative pressure to bear on its news coverage is unlikely to give conservatives control over the network or even significant influence over its news policies, financial analysts and media leaders agree.

Indeed, many analysts and political experts suggested, the proposed campaign appears to be aimed more at gaining publicity and funds for Helms’ causes than at taking financial control of a corporation that the North Carolina Republican calls liberally biased and “the most anti-Reagan network.”

Not only would the Helms proposal require huge sums of money--analysts say it would cost $1 billion or more to buy half of CBS Inc.’s nearly 30 million shares of stock, now valued at about $75 per share--but Helms would face a legal obstacle course strewn with government regulations.

“Nobody is going to get control of CBS through a cockamamie scheme like this,” Tony Hoffman, director of corporate finance for the investment banking firm of Cralin & Co. of New York, said Monday. “It very definitely has no chance, which leads me to suspect that . . . it’s just a brilliant fund-raising gimmick.”

Apart from whether Helms’ takeover drive succeeds, it raised the question of whether simply by posing the threat the senator might exert a chilling or inhibiting effect on CBS news coverage.

But unless the drive acquires a major financial stake, media specialists said, executives at CBS or other major news organizations are likely to be unmoved by the kind of public pressure that Helms is calling for.

Benjamin Bradlee, executive editor of the Washington Post, like CBS often a target for conservative criticism, dismissed the idea that the threat of a takeover would affect CBS’ news operations.

“I think it’s pretty much of an empty gesture,” he said. “It’s not going to affect CBS. You know, the Moonies announced they were buying stock in the Post a while back. Well, I don’t think that put the fear of God into us, do you?”

David Keene, chairman of the American Conservative Union, said he also detected a publicity motive.

“This is an idea that has been around for years,” said Keene, who noted that conservative activists have long dreamed of seizing financial control over a major newspaper or television station to counteract what they see as the news media’s prevailing liberal slant.

CBS has been widely regarded as a “devil figure” by conservatives, he noted, and is considered particularly vulnerable now because of the publicity it has received as a result of retired Gen. William C. Westmoreland’s $120-million libel suit against it.

“It appears that Helms’ people are trying to revive the old idea, probably in part for fund-raising purposes,” Keene said.

Helms Asks for Money

Helms, in a five-page letter to be mailed next Monday to a million households, asks conservatives not only to buy stock in the network but also to send money to an organization called Fairness in Media. The letter, disclosed last week by the Raleigh (N.C.) News and Observer, says the group needs $277,000 “to produce TV and radio ads and send letters to urge other conservatives to purchase CBS stock.”

The letter urges conservatives: “. . . even if you can’t shift some of your investments to CBS stock, please send FIM (Fairness in Media) a contribution today of $15 or $25. If you can send more than $25, bless you!”

Helms did not respond to a telephone inquiry from The Times on the plan, and his press assistant, Barbara Lukens, told a reporter: “I am uninformed about what is going on.” A CBS spokeswoman declined to go beyond the network’s statement of last week in which it said that it “reports the news accurately and fairly” and vowed to maintain the independence and integrity of its news organization.

Reed Irvine, chairman of the board of Accuracy in Media, a private press watchdog group, said the impact of Helms’ plan depends on how much CBS stock he could persuade conservatives to buy. “If you get a significant amount,” Irvine said, “it would probably reinforce the tendency that already exists for some of the media to re-examine their status and the reasons why they have lost public esteem.”

Other journalists suggested that the CBS news operation was probably used to dealing with pressures and that they do not constitute a threat to press freedom.

“Whether the pressure comes from the left or right or center, I don’t think you can say that the First Amendment should prevent it,” said Ed Cony, vice president/news of the Wall Street Journal and chairman of the Freedom of Information Committee of the American Society of Newspaper Editors. “I don’t see that it’s a First Amendment issue.”

Doubts Changes

“I don’t feel CBS would feel threatened by anybody who said they would buy their stock,” said Ernie Schultz, executive vice president of the Radio and Television News Directors Assn. “Would you change your copy because somebody was trying to buy the Los Angeles Times?” he asked a reporter. “Well, I don’t think anybody at CBS is going to change their copy.”

Shaun Sheehan, senior vice president of the National Assn. of Broadcasters, pointed out that at CBS and other networks the news operations are insulated from overall corporate management, precisely to avoid stockholder influence. “The way the news is presented is kept separate from corporate strategy.”

Industry analysts scoffed at the idea that Helms is serious about taking over CBS.

‘Exact Opposite’

“I doubt that it would have any influence on CBS, this kind of threat,” said Paul Kagan, a Carmel, Calif., investment consultant who publishes the newsletter “Broadcast Investor.” “In fact, if you really wanted to influence CBS, you wouldn’t do it with a hoopla of publicity. Instead, you would quietly amass enough stock to gain some market weight and then propose a deal. This is the exact opposite of that strategy.”

CBS has about 29.7 million shares outstanding, owned by about 24,000 different shareholders.

According to information compiled by Kagan, about two-thirds of the CBS stock is owned by institutional investors such as pension funds, insurance companies and large investment firms.

The single largest owner of CBS stock is William S. Paley, the founder of the company, who owned 6.55%, or just short of 2 million shares, as of February last year. PCW Asset Management Co. of Los Angeles, a major institutional investor, controlled about 5.6% as of a year ago, while State Street Research & Management Co. represented various investors owning a total of 5.26% of CBS.

Analysts estimated that CBS could cost as much as $130 a share in a takeover attempt, which means that Helms’ group might have to raise almost $2 billion to buy half of the company’s stock.

Although the CBS network is not directly regulated by the government, the Federal Communications Commission, according to analysts, would have to approve any group trying to acquire more than 10% of CBS’ stock.

“The government rules are designed to prevent just this sort of action,” Hoffman said. “It’s not so much that it’s illegal, per se, but the ramifications are so complex that it would take two or three years to drag through the regulatory process.”

Both the FCC and the Justice Department, which oversees the antitrust laws, would be involved in any takeover attempt of CBS.