CBS to explore strategic options for radio unit

NEW YORK (Reuters) - CBS Corp will explore strategic alternatives for its radio business, Chairman and Chief Executive Les Moonves said at an investor presentation on Tuesday.

An outdoor billboard owned by the advertising company CBS Outdoors Americas is seen in Leucadia, California March 27, 2014. The outdoor advertising company is looking to price 20 million shares at $26 to $28 each in its initial public offering on the New York Stock Exchange on Friday under the symbol "CBSO". REUTERS/Mike Blake

Speaking at the company’s first investor day since 2011, Moonves said the media company would explore a number of different options, including a possible spin off similar to the one it did with its outdoor advertising business in 2014.

He emphasized that discussions were in the early stages and that the company would be “prudent and judicious” in reviewing their options for CBS Radio, which has over 117 stations.

Throughout the investor presentations, Moonves and other executives spoke with optimism about the future of CBS, whose shows include “The Big Bang Theory” and “The Good Wife,” and which also owns premium cable service Showtime.

The company announced it expects to receive $2.5 billion a year by 2020 in retransmission licensing fees from pay TV operators and reverse compensation fees from broadcast stations for the rights to air its shows. That target was up from a previous target of $2 billion a year.

Additionally, the media company said it expects to see $800 million in revenue from top streaming services, including $400 million from its own All Access streaming service.

By 2020, CBS expects 40 percent of its revenue will come from advertising, down from 50 percent currently.

CBS has focused in ramping up its All Access streaming service, which is less than two years old.

During the investor day, the company announced plans to roll out three to four original shows a year starting in 2017 and expects to have 4 million subscribers by 2020.

When asked about whether CBS was going to be able to grow subscriptions at a rapid enough pace to cover costs of producing three to four original shows.

“We damn well better or we are in the wrong business,” he said.

Additional reporting by Anya George Tharakan in Bengaluru; Editing by Anil D’Silva and David Gregorio