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CBS Corp. (CBS) Inks a Deal to Buy Australia's Network Ten

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CBS Corporation (CBS - Free Report) recently announced that it is set to buy Network Ten, which forms part of the three major commercial broadcast networks in Australia. The deal is subject to certain regulatory approvals and is slated to be completed as per the Australian voluntary administration procedures. However, the financial terms of the deal remain under covers.

Notably, the deal will include Network Ten into CBS Corp.’s global content and distribution portfolio. Also, it is likely to enhance the company’s Global Growth Strategy in Key English-speaking Market.

In fact, the transaction gave an access to launch CBS All Access over-the-top service in Australia, along with additional multi-platform distribution and opportunities. This marks the second international territory after Canada in the month of August.

Along with the core linear channel TEN, the contract also comprises digital terrestrial television channel (DTT) ELEVEN, the DTT channel ONE as well as TENPLAY, the fastest growing digital platform of Network. It should be noted that the company owns a 33% stake in digital terrestrial television channel ELEVEN.

Markedly, CBS Corp. and Network Ten had been working together for almost two decades, and the former is likely to enhance the latter’s potential in the best possible manner.

A Look at CBS Corp.’s Performance

Recently, CBS Corp., which shares space with AMC Networks Inc. (AMCX - Free Report) , posted robust second-quarter 2017 results, wherein it reported 10th straight earnings beat.

In fact, this Zacks Rank #3 (Hold) company’s shares have gained 3.8% in the last three months compared with the industry’s growth of 2.4%. Currently, the industry ranks in the top 43% of the Zacks classified industries (111 out of 256). Also, the stock boasts a Momentum Score of A, with long-term earnings growth rate of 13%.

Going forward, CBS Corp. is likely to gain from increasing demand for content, rise in retransmission rates, expansion of direct-to-consumer business, sturdy digital presence and upfront fees from traditional distribution partners.

We believe with the launch of Showtime's streaming service; online news channel, CBSN; and CBS All Access, this leading diversified media conglomerate is generating incremental revenue. Moreover, it aims to attain $2.5 billion of revenues from retransmission and reverse compensation by 2020.

Stocks to Consider

Better-ranked stocks include Gray Television, Inc. (GTN - Free Report) and World Wrestling Entertainment, Inc. (WWE - Free Report) .

Gray Television, with long-term earnings growth rate of 6.5%, has pulled off an average positive earnings surprise of 24.9% in the last four quarters. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

World Wrestling Entertainment, with long-term earnings growth rate of 20%, has delivered positive earnings surprise of 16.7% in the last reported quarter. It carries a Zacks Rank #2 (Buy).

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