CSTV Heading for CBS Campus?

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Viacom Inc.’s CBS network is in talks to buy independent College Sports Television, according to people familiar with the talks.

Should the deal happen, it would place CSTV -- which operates a linear TV network and an extensive Web business tied to the realm of collegiate athletics -- under CBS Sports and, ultimately, CBS Corp. That company is being split from other assets at Viacom, which is moving toward being divided into two companies by year’s end.

It would also mark the second time that CSTV CEO Brian Bedol and investor Steve Greenberg have built and sold a sports network. The first was Classic Sports Network, which was sold to ESPN in 1997 and remade into ESPN Classic.

The negotiations, rumored earlier this week, were reported by Bloomberg News Tuesday in a story that said CSTV could be worth about $500 million.

Officials at CBS and CSTV -- which faces competition including ESPNU and Fox College Sports -- declined comment. But people familiar with the situation said an announcement about the purchase could come in a day or two.

CSTV, which tipped off in April 2003, and CBS have a close relationship. CSTV secured the rights to a number of collegiate-sports championships. It has produced an NCAA Division 1 Men’s Basketball Tournament highlights package that ran on Viacom-owned Spike TV.

And last year CSTV, in a two-year deal, acquired the streaming rights to “March Madness.” For $19.95, broadband subscribers were able to view up to 56 out-of-market games through the regional semifinal round. The package ran on Yahoo! Inc. (www.yahoo.com) and CBS SportsLine.com (cbs.sportsline.com) in 2003 and 2004, respectively.

During a conference call Tuesday morning on third-quarter earnings, Viacom co-chief operating officer Les Moonves -- who will be CEO of CBS Corp. after the split and oversee CBS, Infinity Broadcasting Corp. and Showtime Networks Inc. -- was noncommittal concerning buying other cable networks.

“We’re looking at everything,” Moonves said when asked about the reported interest in CSTV. “I don’t see us competing with the other side of the family,” he added, meaning Viacom’s MTV Networks. “I don’t see us buying a music channel or a kids’ channel. If there is something that fits with some of the businesses that we are already in, we certainly would consider that. The cable business is a very good business. We’re looking at everything that fits what we do.”

On the call, Moonves also restated his desire to receive cash compensation in retransmission-consent agreements with distributors of its CBS network. Potentially, CBS could obtain more carriage of CSTV in retransmission-consent talks.

CSTV currently counts about 15 million cable and direct-broadcast satellite customers. Distributors include EchoStar Communications Corp., which recently took an equity stake in the network as part of a distribution deal. CSTV’s other stakeholders include Nike Inc., The Coca-Cola Co., Sports Capital Partners LLC and Allen & Co.

A key asset: CSTV -- which is preparing to launch a regional sports network dedicated to the Mountain West Conference early next year -- operates the Web sites for more than 250 colleges and conferences.

CSTV also derives revenue slices from the sale of merchandise online, as well as from streaming media packages of games, coaches’ press conferences and highlights available from a number of schools.

In September, CSTV.com attracted some 6.5 million unique users, ranking seventh among sports sites for the month, according to Nielsen//NetRatings. CBS Sportsline.com was ninth with some 5.67 million.

Mike Farrell contributed to this story.

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