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 5/10 Good --- www.paidcontent.org http://feeds.paidcontent.org/pcorg
| paidContent.org:The Economics of Content ... |
Friday, May 16, 2008 --- 113 days ago http://feeds.paidcontent.org/~r/pcorg/~3/291628570/
 If the recently salvaged Clear Channel ( NYSE: CCU ) buyout was the signature media deal of the 2006-2007 era, then the just-announced CBS ( NYSE: CBS ) acquisition of CNET ( NSDQ: CNET ) is the signature deal of 2008. And they couldn't be more different.
Clear Channel was among the last big deals of the LBO boom—a mega deal, even at the reduced price of $17.9 billion. The buyers, Thomas H. Lee and Bain Capital, are two big players from the private equity industry that ruled the deal world until the credit markets freaked out last summer. Clear Channel, the radio and advertising giant, sold out at the top of a seller's market. It had the luxury of playing two sets of private equity firms against one another. The huge price required the winners to take on so much debt that the banks tried to kill the deal.
The CBS-CNET deal is an entirely different breed , one that represents the new environment that is taking shape in a stricter credit environment. At $1.8 billion, it's a sizable but altogether manageable transaction. CBS, a strategic buyer, is paying for CNET with cash from its $2.26 billion-strong balance sheet. There's no debt or banks to muck up the works. The price is an earthy 4.5 times revenue. That's modest compared to the 6.7 X revenue multiple that Microsoft ( NSDQ: MSFT ) offered for Yahoo ( NSDQ: YHOO ). And the seller was more than happy to take the price. CNET has been on the market since the memory of man. ... |
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