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CBS Shares Dip After Announcing Sports Streaming Service

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Shares of CBS Corporation (CBS - Free Report) moved lower in morning trading Thursday, despite the company’s announcement that it intends to take on the likes of ESPN with its own sports streaming service.

Speaking at the Goldman Sachs Communacopia conference today, CEO Les Moonves said that CBS’ sports network will be focused on news and scores, not analyst discussion and debate. “I'm turning on ESPN a lot and seeing people yelling at each other,” he added. “On our sports network, you won't have to wait for news.”

Moonves further targeted ESPN and Disney (DIS - Free Report) by saying that CBS would not need to spend a “zillion dollars” to execute its sports streaming plan, which was a reference to Disney’s recent acquisition of BAMTech—a deal that will help power the upcoming ESPN-branded streaming service.

Moonves pointed out that his company’s existing streaming platform, CBS All Access, has been steadily accruing subscribers. On top of this, Moonves said that the new platform will launch as an ad-supported service, but CBS is planning to move toward a dual-revenue stream with paid subscribers.

Of course, CBS is heavily invested in sports already. The company has spent a good chunk of change to maintain the broadcasting rights for certain NFL games, leaving some investors to worry about a slump in football ratings.

Moonves addressed this trend, saying that he is “really not concerned” about ratings and reiterating his belief that “the NFL is still the best property on television.”

Despite this positive outlook, and the announcement of a major sports streaming service, CBS shares dipped on Thursday. Through morning hours, CBS was down more than 2.7%, touching an intraday low of $58.78 in the process.

Thursday’s dip might also be a reaction to a relatively large insider sale. According to a recent SEC filing, Gil Schwartz, the company’s senior executive vice president and chief communications officer, recently disposed of 6,700 shares of CBS at prices ranging from $23.19 to $58.40.

With today’s drop, CBS shares are now down over 8% this year, making it one of the weaker stocks in the media industry so far. In fact, our “Broadcast Radio And Television” industry has gained an average of 16.9% year-to-date, outpacing the S&P 500’s solid 12.9% growth.

As for now, CBS remains a Zacks Rank #3 (Hold).

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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