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CBS purchases CSTV Networks for $325 million
NEW YORK -- CBS, which is about to split away from the Viacom Inc. media conglomerate, has already made its first acquisition deal, agreeing to pay $325 million for a two-year-old college sports network called CSTV Networks Inc.
CBS plans to pay for the company, which was founded by sports programming entrepreneur Brian Bedol, with stock in CBS Corp., one of the two companies to be created by the end of the year when Viacom splits itself up.
Bedol was also a co-founder of The Classic Sports Network, a cable channel that became popular with non-game sports programming such as documentaries and nostalgia shows. That channel was sold in 1997 to Walt Disney Co.'s ESPN and is now known as ESPN Classic.
Under the deal announced Wednesday, Bedol will continue to operate CSTV and report to Leslie Moonves, who will run CBS following its breakup from Viacom.
CSTV was founded in 2003 and currently has 15 million subscribers, offering a variety of sports such as tennis to lacrosse that might not otherwise get big programming deals. Bedol, in an interview, likened college sports to "a year-round Olympics."
The deal also includes a network of more than 250 official college sports Web sites that are operated for their respective schools by CSTV, as well as CSTV's own Web site, www.CSTV.com.
Unlike the Classic Sports Network, which was folded into ESPN's existing group of sports channels, CSTV retain its unique blend of college sports programming even after it becomes part of the giant CBS organization, Bedol said.
Bedol said he planned to stay on at CSTV and continue to build the company, taking advantage of the added heft and resources now at his disposal as part of CBS, already a major sports broadcaster.
"This was not born of the idea of building something and later selling it," Bedol said. "It was recognizing that the college sports category had been underserved."
Bedol and Moonves said their talks about the deal began over a round of golf in Sun Valley, Idaho, at an annual retreat for investors and media executives sponsored by the well-connected investment banking firm Allen & Co.
Viacom expects its breakup plan to be completed by the end of the year, pending regulatory approvals. Assuming it does, the newly created CBS Corp. will own the TV network, a major radio broadcaster, a group of TV stations and other properties. The new Viacom Inc. will own MTV and a stable of other cable networks as well as the Paramount movie studio.