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Home Business & Finance ViacomCBS Sale of CNET Is a Modest Step in Plan to Refocus...

ViacomCBS Sale of CNET Is a Modest Step in Plan to Refocus on Video

Document Analysis NLP IA

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objective
redaction

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it's an affirmation
Affirmation0.59065934065934

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Summary (IA Generated)

ViacomCBS has been offloading assets it deems non-essential to its core TV, video-based business.

Analysts at S&P Global Ratings said in a note on Tuesday that they expect ViacomCBS’s sale of tech website CNET to Red Ventures to “modestly reduce” ViacomCBS’s leverage.

The move is a continuation of ViacomCBS’s recent business plan of selling off assets it views as non-essential to the future of the company’s core video business in hops of chipping away at debt.

“We do not think the sale will affect the company’s size and scale because CNET is not part of its video content business,” S&P analysts wrote on Tuesday.

“We expect ViacomCBS to use the proceeds to reduce its debt over time and view the sale of CNET as consistent with its stated plans to sell non-core assets to reduce its leverage.

S&P analysts said that while ViacomCBS’s debt is still high at 4x for the cost of the sale of CNET, they expect the company’s leverage to improve to about 3.

ViacomCBS has also been looking to offload its Simon & Schuster publishing unit as part of the push to focus its assets on video-based content, including the recent rebrand of CBS All Access to Paramount+.

In February S&P analysts revised their outlook on ViacomCBS to negative due to the company’s weaker-than-expected results and high level of debt following the long-awaited merger between Viacom and CBS.

“However, due to the uncertainty created by the COVID-19 pandemic, the timing of these asset sales is uncertain and will likely be delayed into 2021,” analysts wrote.

“We will now look to resolve the negative outlook in 2021 when we get more clarity about the timing and amount of proceeds from the non-core asset sales, as well as the company’s ability to improve its operating trends despite the continued economic uncertainty and increasingly competitive media landscape.


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