CBS Has No Plans to Sell More of Firm, Tisch Says
CBS President and Chief Executive Laurence A. Tisch told shareholders at the company’s annual meeting Wednesday that there were no plans to sell any part of the broadcasting firm. After the meeting, he called reports that he had held talks to sell the network “absolutely false.”
Tisch also said Loews Corp., which is CBS’ largest shareholder with 24.9% of the company’s stock, intends to maintain its stake. Tisch is also chairman of Loews.
In response to shareholder inquiries about plans for the roughly $3 billion that CBS earned from the sale of its record and publishing divisions, Tisch said the money is well invested in government securities and the company is looking to acquire additional television stations to bring its market coverage closer to the permitted 25% limit. CBS owns four stations, including KCBS-TV in Los Angeles, that together reach about 19.5% of the nation’s homes. This lags behind both NBC, which owns seven stations reaching 22.4% of the market, and Capital Cities/ABC, with eight stations covering 24.4%.
Tisch remarked at the outset of the meeting that broadcast advertising is usually stronger in years with a presidential election and the Olympics. However, CBS has not experienced such a boost to date.
“The first and second quarters have not proved to be as strong as originally estimated, and the industry outlook for the third quarter is less optimistic than anticipated,” Tisch stated.
However, Tisch added that CBS’ budget for 1988 “was prudent enough, and cost-control efforts have taken hold so that no severe drop in anticipated earnings is likely.” He declined to estimate earnings for the year because of sluggish advertising sales and because the start date for the fall season remains uncertain because of the Writers Guild strike.
Ralph Colin Jr., a vice president at Columbia House, which was sold with CBS Records to Sony, criticized Tisch’s overall management, his decision to sell off more than 50% of the company’s assets and his “own personal lack of commitment” to the employees who have been at the company for years.
“You appear to be content with being the No. 3 network and have found perhaps that it costs less to live in the cellar than it does to live in a penthouse,” Colin said. “Your philosophy seems to prefer the cheap to the best.”
In response to these statements and to other shareholders who criticized CBS management for the company’s lackluster performance in 1987, Tisch said CBS “didn’t reckon with the success of the Winter Olympics or the effect of the Super Bowl on ABC’s ratings. If we remove those two events . . . we would have been the No. 2 network in prime-time programming.”
CBS Chairman William S. Paley did not attend the meeting but watched it on closed-circuit television, Tisch said.
Times staff writer Jay Sharbutt in New York contributed to this story.