Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2020

2) ACQUISITIONS AND DISPOSITIONS

Acquisition

On April 3, 2020, we acquired a 49% interest in Miramax, a global film and television studio, for $375 million, which included a cash payment at closing of approximately $150 million along with a commitment to invest $45 million annually over the next five years, or $225 million, to be used for new film and television productions and working capital. In conjunction with this acquisition, we entered into commercial agreements with Miramax under which we have exclusive, long-term distribution rights to Miramax’s catalog, adding more than 700 titles to our existing library. We also have certain rights to co-produce, co-finance and/or distribute new film and television projects. The investment is accounted for as a consolidated variable interest entity (“VIE”). We are the primary beneficiary of the VIE due to our power to direct the distribution of Miramax’s films and television series, which is considered the most significant activity of the VIE.

The following table summarizes our estimated allocation of the purchase price as of the acquisition date.


Assets
Cash	$	32
Accounts receivable and other current assets	19
Programming inventory	536
Goodwill	99
Intangible assets	12
Other assets (noncurrent)	7
Assets acquired	$	705

Liabilities
Accounts payable and accrued expenses	$	13
Participants’ share and royalties payable (current)	16
Deferred revenues	10
Participants’ share and royalties payable (noncurrent)	20
Debt	105
Other liabilities (noncurrent)	28
Liabilities assumed	192
Noncontrolling interests	363
Total purchase price	$	150

The goodwill, which is not deductible for tax purposes, reflects the expected Company-specific synergies arising from the acquisition and is included in the Filmed Entertainment segment. Intangible assets consist of a trade name with a useful life of 10 years.

The operating results of Miramax from the date of acquisition through September 30, 2020 were not material.

Dispositions

CNET Media Group

On October 30, 2020, we completed the sale of CNET Media Group (“CMG”) to Red Ventures for $484 million, including an estimated working capital adjustment. The purchase price consists of a cash payment at closing of $459 million and a credit of $25 million to be used over five years for the purchase of advertising and licensing of data from Red Ventures. As a result, we will recognize a pre-tax gain of approximately $245 million in the fourth quarter of 2020. CMG has been classified as held for sale on the Consolidated Balance Sheet at September 30, 2020. The following table presents assets and liabilities classified as held for sale at September 30, 2020.


Assets
Current assets (a)	$	39
Property and equipment	6
Goodwill (b)	114
Intangible assets, net	108
Other assets (noncurrent)	4
Total assets	$	271

Liabilities

Other current liabilities	$	32
Other liabilities (noncurrent)	4
Total liabilities	$	36

(a) Included in “Prepaid and other current assets” on the Consolidated Balance Sheet.

(b) Goodwill was allocated to CMG from the CBS Interactive reporting unit based on its relative fair value.

CBS Television City

During the first quarter of 2019, we completed the sale of CBS Television City for $750 million. We guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. This transaction resulted in a gain of $549 million ($386 million, net of tax), which included a reduction for the estimated amount payable under the guarantee obligation.