Moody's: CBS, Time Warner unchanged

Moody's Investors Service said the ratings of CBS Corp. (Baa3 senior unsecured) and Time Warner Inc. (Baa2 senior unsecured) are not immediately impacted by the agreement of CBS and Time Warner's Turner Broadcasting to pay the NCAA $10.8 billion for the mens' college basketball championships over 14 years beginning with the 2011 tournament.

CBS had the previous exclusive rights, but the new transaction essentially creates a 50/50 shared operating arrangement for revenues and expenses associated with both the television, digital and wireless rights.

Moody's believes that the transaction is a win-win for CBS, which in the agency's view was challenged to generate profits from the rights in recent years as the annual contract fees escalated in the contract's late years. It said CBS' additional opportunities lie in the ability to share in a greater number of aired games without losing important programming for its CBS network and owned and operated stations and significantly limiting its downside financial risk if advertising demand weakens.

For Time Warner, the agency believes the additional opportunities lie in the ability of its Turner networks to increase viewer ratings and importance to viewers overall to leverage its carriage fee negotiations.

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