CBS Corp. (CBS) Leadership Changes Will Not Affect Rating - Moody's

Moody's Investors Service said that CBS Corp.'s (NYSE: CBS) announcement to appoint Mr. Leslie Moonves as the next Executive Chairman, following Mr. Sumner Redstone's resignation from his position as Chairman, will not impact the company's Baa2 senior unsecured rating or the stable outlook. Mr. Moonves has been with the company since 1995 and has served as CEO since 2006. He will continue to serve as President and CEO of the company.

In Moody's opinion, the stepping down of Mr. Redstone as Chairman is largely neutral from a credit perspective and is not expected to have any material impact on CBS's day-to-day operations. However, we view the appointment of Mr. Moonves as Chairman to be a positive development for the company. CBS has demonstrated solid operational performance under Mr. Moonves's stewardship and we believe the company will continue to benefit from his strategic leadership and vast experience. Mr. Moonves has been a successful leader in the media and entertainment industry and has been a critical element to the company's successful track record of healthy growth and sound financial management. Mr Moonves led the organization during the last recession, which was one of the most difficult times for the company, helping it overcome business and financial challenges, rebuilding balance sheet strength and settling liquidity issues. Under his leadership, CBS has made remarkable progress in reducing its exposure to volatile advertising spending from roughly 66% of total revenues in 2008 to around 51% in 2015. In our view, over the last couple of years, CBS has achieved considerable success in improving its credit profile by growing non-advertising sources of revenue such as retransmission and affiliate fees, subscriptions and syndication sales and exhibiting prudence in its capital allocation strategies. Since Mr. Moonves will continue to serve as the company's CEO, we don't anticipate any immediate strategic changes that will impact the company's business or financial risk profile. Accordingly, the recently announced corporate governance changes are not expected to have an impact on CBS's credit ratings or outlook.

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