Wednesday, May 5, 2010

CBS News and CNN May Share Resources

The economy is slowly emerging and deals are in the air. Literally. Comcast and NBC, Continental and United. And while this news of CBS and CNN sharing resources is not technically a merger, it makes us wonder if there could soon be one. Cost savings and economies of scale are not new and as revenues have yet to bounce back, cost cutting keeps profits up. It is also the scond pairing of two media giants. First, just months ago was that CBS Sports and Turner were sharing the NCAA Basketball Tournament. Today, that they want to share news personnel and stories. "CBS could presumably realize considerable cost savings if a deal enabled the network to rely on more of CNN’s extensive news-gathering resources." And Turner gets similar savings and more awareness of its brands as well.

So what is stopping CNN and Turner and their corporate parent, Time Warner from buying CBS. Disney has ABC, NBC Universal has NBC, why shouldn't CBS have a corporate parent with multiple cable networks as well as a Hollywood studio. It seems like the right fit of content. And since Time Warner is now separated from its cable distribution company, none of the issues that face the merger of NBC with Comcast. "CBS and Time Warner are partners in several other areas of the television business. They co-own the part-time broadcast network CW (the C is for CBS, the W is for Warner), and the Warner Brothers television studio supplies CBS with a host of its top-rated prime-time shows". A merger would also force the reconciliation of union and non-union news workers that is described in the article. And it establishes control by one owner.

In this age of cost cutting, a combined news team does make sense; a full fledged merger of the two organizations even more so. Would Sumner Redstone agree to sell? Who knows. Would he consider buying...