It's no longer profitable for networks to have their own news organizations, according to CNBC's David Faber.
In the wake of the news that CBS is in negotiations to outsource its news division to CNN, Faber explained on CNBC's April 8 "Squawk on the Street" CBS's news division is a victim of an evolving business.
"The news that CBS is once again considering a deal under which it would outsource some of its newsgathering operations to CNN - certain to get those critics out there who say, ‘Oh, this is the end of news as we know it on television,'" Faber said.
"Well, if you haven't noticed, news on television ended a long time ago, other than '60 Minutes,' which is by the way a CBS program. I challenge you to come up with actual newsgathering that is taking place on the networks," he said. "That ship has sailed."
Faber interpreted the proposed move by CBS (NYSE:CBS) as a sign the mass media company was under pressure to cut some of its costs. CBS's stock has taken a hit over the last nine months. Since trading at a stock price of $34.73 on July 20, 2007, it has fallen to just above $22 a share.
"If you're [CBS CEO] Les Moonves, you're looking for two things," Faber said. "You're looking for ways to cut costs in the face of what may be very slow growing revenues, if not declining revenues ... and you're looking for how to get growing again."
Another thing hurting CBS is a lack of a cable presence like its competitors NBC Universal (a subsidy of General Electric (NYSE:GE)), ABC (a subsidy of the Walt Disney Corporation (NYSE:DIS)) and News Corp (NYSE:NWS.A).
"[Y]ou don't have the exposure to cable, which is - thank you very much - growing relatively well right now," Faber added.
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Faber has a point
April 8, 2008 - 14:04 ET by bigtimerFaber has a point now...but... if any of these leftist networks would have ever become fair and balanced, instead of sceeching leftist propaganda filled blather there wouldn't of been any need for this in the first place.
JMO
"Never murder your opponent when he is committing suicide." ~ W. Churchill
Yeah, but you know the MSM,
April 8, 2008 - 14:42 ET by dscottYeah, but you know the MSM, they have rationalized the problem as being everyone else's fault but their own. One look at their collective negative stock trends tells us why they think the economy has been bad for 5 years, it's all Bush's fault. Of course even if CBS got a cable presense it still wouldn't make a difference since all of them are losing market share against FNC. So it's all Fox News fault.
The problem with the Networks, Cable and Print is that they started to believe their own propaganda and there was no one until FNC and Radio to oppose it. Without a frame of reference, you lose the ability to distinguish the story line from fantasy. When your the only game in town for so long, you become lazy and think your entitled.
Lord Sidious / Darth Vader 2008 Long Live the Empire! Come to the Dark Side, it is your Destiny.
It was on;ly after
April 8, 2008 - 15:29 ET by 10ksnookerIt was on;ly after Bloggers went to Iraq and took up the challenge to report fairly and accurately news from Iraq, was the truth told. When they went to Iraq, the drive by media left. I wonder why?
The Nets are still in denial
April 8, 2008 - 21:22 ET by BritcomThey don't want to hear the truth that their television audience is shrinking because the public has discovered that the Nets are not fair or balanced and that they will only hire liberal wackos with a political agenda. That means that the news coverage they put out is skewed too far left and their remaining liberal viewers are not numerous enough to support them.
In other words, the Nets have been dumped at the prom for a date who is just as pretty, but is less shrill, dishonest, and insulting. Even the nerds don't want to dance with her.
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Communist vs. Statist '08
Q. Is Panamanian born John McCain a "Natural Born Citizen"