Audit Integrity recently listed CBS as one of the top twenty companies that are on the road to possible bankruptcy. A CBS bankruptcy could do a lot in changing the face of network TV forever. As a political advisor, I have to have a deep understanding of all aspects of business. This has led me to think of some of the major ramifications of a possible CBS bankruptcy.
The first obvious casualty of a CBS bankruptcy would be the loss of advertising dollars. In the business world, we have seen for years that advertisers consider bankruptcy as a sign of failure, and will avoid putting their advertising dollars behind a network that they deem as failing. This will start a slippery slope.
Loss of Contracts
The sports leagues will be leery of signing any long-term contracts with any network that has a chance of not being around by the time the contract comes to an end. Shorter contract dates will probably be negotiated which will also put a damper on advertisement investors. Yet another turn for a CBS bankruptcy.
Loss of Shows
A dip in money infusion will be seen in the fact that CBS will probably not be able to produce all of the original programming that it currently has. The cancellation of some shows, the movement of some shows to other networks, and the elimination of high-priced actors could be a casualty of a CBS bankruptcy.
Affect on Other Networks
Some of the other networks would benefit by a CBS bankruptcy. A higher influx of advertising dollars taken from a bankrupt CBS could cause for celebration at other networks. The loss of a fan base of one show might infuse another similar show on another network. It should be pointed out, that some of these viewer will go to other basic networks, and some will go to cable networks.
As a general rule, more cable viewers usually more advertising dollars for the cable networks. Will this lower your cable bill? Of course not, don’t be silly. It will just mean less money for the basic networks. This, over a long term, could mean more than just a CBS bankruptcy. This could lead some of the other networks down the same path.
A CBS bankruptcy could end up being catastrophic for CBS, and some of the other basic networks. With mounting debt, and losses from poor investing in merchandising has led CBS to the brink of bankruptcy. Cool-headedness will lead away from a CBS bankruptcy.