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Viacom's BET buy
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November 3, 2000: 2:37 p.m. ET
PaineWebber analyst Chris Dixon looks at Viacom's future
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NEW YORK (CNNfn) - Viacom shares are ripe for the picking following its $2.3 billion acquisition Friday of BET Holdings, Inc., the parent company of Black Entertainment Television, according to PaineWebber media analyst Chris Dixon.
Dixon, a guest on CNNfn's "In Focus" segment, said America Online and AT&T Liberty Media Group, which operates cable television systems, also look good as sector stock picks.
"In Focus" airs daily on CNNfn's network at 12:10 p.m. The following includes comments Dixon made both during the show and in the pre-show interview.
CNNfn: Viacom is acquiring BET Holdings for $2.8 billion, including debt -- is this a fair price?
 Dixon: Yes. BET is being acquired for about $48 per subscriber, or approximately 20 times estimated 2001 run rate cash flow. On a per subscriber basis, that's less than what BET was taken private for about 4 years ago.
CNNfn: For Viacom, what's the reasoning behind the purchase?
Dixon: It gives Viacom a terrific established-brand TV network that fits well with their portfolio of assets: MTV, VH1, Nickelodeon and Showtime. In addition the radio and Internet assets at BET also can be better promoted across Viacom's Infinity radio platform.
CNNfn: Do you see any potential integration issues?
Dixon: No.
CNNfn: What are the key issues in this transaction?
Dixon: This is a terrific opportunity for Viacom to leverage the BET brands. African-Americans account for over 13 percent of the U.S. population but are only able to capture 1 percent of the advertising dollars, which suggests that BET can benefit from cross promotional opportunities between CBS and the Viacom cable network and the various Infinity radio platforms.
CNNfn: Viacom is the second-largest media company in the world -- where will this acquisition put them in terms of their competition?
Dixon: It doesn't make much difference. The acquisition is small but important because it increases Viacom's breath and allows them to create more value than BET could on its own.
CNNfn: Is this merger good for Viacom shareholders? Would you recommend the stock?
Dixon: Yes. I would be an aggressive buyer at these levels.
CNNfn: What are your favorite stocks in the media sector?
Dixon: Viacom (VIA: Research, Estimates), AT&T's Liberty Media (LMG: Research, Estimates) and America Online (AOL: Research, Estimates).
AOL is merging with CNN parent company Time Warner.
- complied by Staff Writer Carmina Perez 
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