Since splitting from Viacom at the end of 2005, CBS has generated more than $4 billion in free cash flow. Prudently managed, and together with well-timed asset sales, CBS should by now have accumulated a decent cash hoard to tide it comfortably through a downturn.
But CBS Chief Executive Leslie Moonves never made any secret of his impatience with CBS's slow-growth image. So while he raised more than $2.3 billion selling small radio and TV stations as well as theme parks, he has spent about as much buying digital businesses, including CSTV, Last.fm and the $1.8 billion all-cash acquisition of CNET last summer.
Moreover, he squandered $3.4 billion on ill-timed stock buybacks last year, paying an average of $32, which was only a little below the stock's high point of $35 since the split and more than three times the approximately $9.40 where the stock is now trading.
By aiming for two goals at once, he is likely to fall short on both."